Blockchain first came to life in the form of the Bitcoin network in 2009. 9 years on, this technology is broadly used in various areas and industries, ranging from asset management to game platforms.
Last year’s ICO boom drew enormous attention to the industry of cryptocurrencies and the blockchain technology, with many companies expressing their interest in its capabilities, or broadly speaking, what it can do. But even before all this buzz, some large international corporations began establishing special departments to research more about distributed ledgers and what opportunities their application can provide.
While numerous small and ambitious startups launch ICOs to attract funds to develop innovative blockchain-products, what large conservative corporations are trying to do is to adapt the most promising technology to their own needs.
Company expectations of blockchain
By applying blockchain, logistics companies hope to improve the control over delivery. Distributed ledgers help to protect data on the shipment status and location at any given moment of time. Banks aim to substantially reduce their costs and increase the speed at which international and banking payments are conducted; and insurance companies can expect almost full automation of payments to their clients when insured events occur.
Many large companies still refuse to manage all the documentation digitally, as they believe that such a digital system requires a lot of financing and time. Refusal to do so slows down many internal and external business processes, which, in turn, might have corresponding effects on the economic forecast. That is precisely why it is in the best interests of corporations to integrate blockchain technology, which not only will speed up the flow of documentation but also help to protect it from being lost or forged.
Examples of successful implementation
According to a research by Markets&Markets, a company which provides services to large international organizations, by 2022 the global blockchain-based service market will have reached the capitalization of 8 billion USD.
Universa, under the supervision of the Malaysian trade minister, signed agreements on cooperation with the largest cooperative societies of Malaysia — Angkasa Coop and ASN Networks. In the framework of our cooperation, Universa develops and implements a Universa blockchain-based system of distributing and controlling payments to 4 million people. With this system the cooperative societies will be able to counter the unlawful spending of the workers on alcohol and cigarettes instead of the staple foods.
IT giant IBM creates a joint venture with Maersk, a cargo transportation giant. Maersk representatives say that the colossal amount of paperwork is one of the biggest problems for transport companies in the world. Food logistics is especially important here, as any loss of the necessary papers or delay of its delivery results in the cargo simply expiring.
Maersk also participates in financing and supporting startups by developing a blockchain platform with Microsoft and insurance companies for ensuring maritime transportations, which take up to 80% of all the world logistics services.
Universa implements our own solutions to improve logistics services and the industry as a whole. In February, at an economic forum in Sochi, Russia we signed a business process digitization contract with ‘Novotrans’, a railway vehicles operator. With blockchain the company will be able to keep record of and manage the use of railway vehicles, which will greatly improve the company logistics.
Banking sector is another area of interest for Universa. Together with the largest private bank in Russia ‘Alfa Bank’ a research was conducted, which proved that blockchain has great potential and can be of great use in the banking sector. The next step is to create a product MVP for the tasks, which the bank aims to address with the Universa platform.
To solve tasks in logistics an international organization, Blockchain in Transport Alliance (BITA), was established, with a number of large transport companies having joined, namely UPS, FedEx и BNSF Railway. The aim of the alliance is to unite companies willing to implement blockchain solutions to develop common standards and test such solutions. FedEx international delivery manager says that ‘blockchain has great importance for the delivery, transporting and logistics chains. This is another landmark achievement that will completely overhaul the global delivery system’.
A number of food delivery companies united to create a universal blockchain solution to track delivery in the food industry. A contract was signed by the largest producing and delivering companies, which include Walmart, Kroger, Nestle и Unilever.
Due to the benefits of blockchain Walmart succeeded in reducing the time that operators take to track mango delivery chains from a week to just a couple of seconds. This success drew attention of other market players to blockchain and caused them to start developing their own solutions.
The director of the food security department in Kroger believes that all the large food suppliers should unite to use modern technologies to optimize supply chains for the sake of the consumers.
Mining and quarrying is a multi-billion dollar industry, with enormous turnovers depending on process optimization. BHP Billiton, one of the largest mining companies in the world, decided to apply distributed ledgers to track delivery routes and the condition of the extracted resources.
BHP Billiton often relies on numerous contractors, they sign contracts with them on geological services and courier delivery in different facilities on different continents, which creates a complex network. The company believes that blockchain will increase the data storages safety and the speed of data exchange, which is received and processed in real time.
Mexican state oil company Pemex has already been noticed by crypto publications as a first oil company to accept digital currencies as a means of payment. Pemex will invest in Petroteq, a company which develops a specific blockchain solution for the industry to control the supply of oil-based products.
The energy industry requires that the energy companies regularly perform complicated calculations and exchange them. British company Electron recently received investments from Japanese energy giant TEPCO. In the framework of the project, Electron plans to create a blockchain solution which will allow to simplify and speed up transactions account in the energy sphere by becoming a data operator for energy suppliers. The solution can be proven to be useful outside of the energy sector as well, for example, in the telecommunications industry, water supply and communal services.
Blockchain expansion to the all largest companies
The distributed ledger technology is young, while many large corporations are extremely conservative and weary of some innovations.
Research agency Juniper Research polled 400 top managers and IT directors in large companies. According to their research, more than 60% of these companies are going to implement blockchain in the near future.
International firm providing audit services Deloitte, one of the Big Four accounting firms in the world, polled representatives of a 1000 companies from US, Canada, China, Mexico, France, Germany and England with annual turnover exceeding 500 million USD. 33% of respondents said that their companies already use blockchain, and slightly over 40% said that it is in their plans and will be done within a year.
Blockchain technology spread like fire in the IT sphere, while the real economy sector still requires sustainable and operational solutions based on distributed ledgers. The first step in this direction was made by Oracle, which created its own department of blockchain development. At the same time, Microsoft has long been developing products for financial institutes based on this technology.
Judging by the pace that the blockchain today infiltrates the business processes of corporations from various industries, we can say with a degree of certainty that in the next decade there will be basically no companies that do not use the distributed ledger technology.