When looking for technologies that are secure and remove a middleman/broker from the execution of your business plan, thus reducing the cost to your customers or decrease in your margin, distributed ledger technology (DLT) could be an option.
Blockchain is just one in an array of tools in the technical class of DLT. DLT is the roll-up technology class; it’s on a peer-to-peer (P2P) network using a consensus protocol among all the peers partaking in the DLT, eliminating the need for a clearinghouse involvement. Each peer or endpoint is called a node on a public database called the chain.
The chain itself is validated by the P2P network nodes, but the detailed data is securely stored in the block. First, there is a block of origin, and then each block is recorded as a transaction level, and the computers on the peer-to-peer network work as one. The blocks are validated by a wider community rather than a central authority. This makes it more secure and less costly in the long term.
Many have no idea when to apply DLT technologies — and to be fair, there are still very few market applications that exist outside of the crypto exchange use cases. That said, DLTs can become game-changers, as they provide a transaction-based, validated, decentralized, single-distributed ledger as well as smart contracts and crypto-assets, including currencies in certain competitive niches once they have been identified like NFTs.
They could also create a transformative effect that enables new ways of doing business that have not emerged to date. Do not underestimate the cost savings of eliminating or preventing the need for a middleman in many business models. It could help to make sense of ways of doing business that never made sense in the past.Below are two examples from my experience.
Counterfeit drugs are a complex issue in healthcare. The supply chain in pharma is negatively affected by counterfeit activities, as it leads to manipulated and artificially inflated or deflated prices. The current siloed supply chain has no way to keep counterfeit drugs out of the supply.
While there are fewer counterfeit drugs in the supply chain in the U.S. than elsewhere, having no way to monitor origins of supply can lead to unregulated and inconsistent drugs (which could be dangerous to patients) as well as losses for companies that follow regulatory guidelines and legal drug supply to the healthcare sector.
A peer-to-peer protocol like DLT technologies/blockchain could help provide a cryptographically secure, distributed private ledger that tracks each supplied drug within the supply chain through traceable and verifiable smart contracts at a discrete transactional level. To put it simply, theft, entry of counterfeit drugs and drugs that are being sold after their expiration date would be traceable.
Also, the movement of drugs and supplies to other countries post-expiration date for philanthropic purposes could be more easily traced to their next destination, and the exact use or recipient could be documented. If you can trace the origin block and the nodes within, the DLT peer-to-peer network can validate the transactions, which would allow for tighter control on what is entering the pharmaceutical drug supply.
Ever wonder where your food came from and how fresh it is — especially those prepackaged lifesaving boxes of ingredients that many of us have been ordering to increase the variety of our kitchen skills and culinary repertoire?
With all of the transformative effects of the recent pandemic and digital purchasing of foods from remote locations through national delivery services straight to the consumer’s home, having the assurance of the origin of the foods, their transport length and chain-of-custody proof would give us all the confidence in who supplied and distributed them and how it was done.
It could also prevent the ingesting of something hazardous or unsafe due to delays from farm to table. We have all heard stories of farmers and agricultural businesses struggling to turn a profit. By leveraging a peer-to-peer network like in blockchain, it could prevent data manipulation, ensuring an increase in food and agricultural supply chain trust.
During the height of Covid-19, before the variants began to emerge, I participated in think-tank activities associated with Operation Warp Speed — the mechanism in which the development of vaccines was funded and distributed through partnerships between biomedical companies and numerous agencies within the federal government.
Many interesting conversations on vaccination transport weaknesses and supply chain vulnerabilities were had. These conversations shed a light on ineffective transport practices.
Through this experience, I believe blockchain could be leveraged to connect serial data points from the point of origin (e.g., organic certifications, chemicals used with barcodes, batch identifying information, and when and who the supply was released to for transport).
In transport, Bluetooth thermostats for drug and food temperatures as well as livestock monitoring for the humane treatment of the animals being transported could contribute to checkpoints in the blockchain of things like farm to table.
You can begin to imagine all of the transformative things that could be done with blockchain, as the immutable (unmodifiable, undeniable, peer-to-peer secure) data about what we are purchasing and the companies we support could help reduce waste and cruelty as well as the costs that are built into our supply development and distribution.
Encouraging technology for the sake of technology is never advised. However, any business model reliant on intermediaries that require handoffs in the production-to-consumer chain they do not control or that need secure and reliable data across an ecosystem that is not under the organization’s direct control would benefit from this technology.
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