Introducing Asset Chains

No company is an island. Even the smallest of firms are highly dependent on unthinkably vast, unthinkably complex global trade networks. This global supply chain moves $64 trillion dollars annually.

Navigating those global trade networks is one of the key challenges for almost all of the world's largest and most important corporations. Making them even slightly more efficient can have enormous impacts for businesses, for consumers and - to an extent we do not adequately appreciate - for the environment. However, trade is one of the critical areas where the internet of information has failed to substantially disrupt the industry.

An enormous network of non-value adding intermediaries exist in global trade to establish trust between various vendors, and - more often than not - it's up to humans to identify aspects of a supply chain that could be made more efficient. That makes the entire supply chain far less efficient and transparent than it could be in a distributed, automated network.

Enter blockchain.

Working in conjunction with artificial intelligence, blockchain enables us to build decentralized, autonomous, 'thinking' supply chains that are able to identify areas of inefficiency and rectify them quickly and easily.

It's one of the most important applications of blockchain technology. That's why the Blockchain Research Institute reached out Tom Serres and Bettina Warburg of Animal Ventures to conduct the definitive investigation into the intersection of blockchain and supply chain management.

Their research project, entitled "Introducing Asset Chains," was recently released to our members. It's a fascinating, detailed look into the work that's already being done to create a new kind of global trade network that's more efficient and transparent. Although the full white paper is available to Blockchain Research Institute members, I am permitted to share some of the high level conclusions.

“Introducing Asset Chains” - Excerpt from the Executive Summary of the Serres/Warburg Report:

• Assets all over the world are extracted, designed, combined, transported, and sold every day through the supply chains that underpin global commerce. While technologies are increasingly disrupting traditional industries, this flow of goods has not been overhauled in years.
• Blockchain is decentralizing these traditional supply chains and combining with artificial intelligence, additive manufacturing, and the growing Internet of Things to bring about new value networks that scale to the demand of machines and human beings.
• These new supply chains are autonomous, distributed, and cognitive in the sense that they are learning and bundling what they learn into opportunities for systemic self- improvement in efficiency and responsiveness.
• Cognitive supply chains require a network state function that provides a singular universal truth as the basis for what we call machine trust.
• Integral to machine trust are asset chains, which provide a framework for machines to participate autonomously in supply chains and the markets they serve. They allow us to unlock the trading capability of machines without human intermediaries.
• This research project explores the business implications of asset chains and the leadership required to build coalitions and form alliances to achieve consensus on industry-wide protocols for asset chains.

It’s for this reason that some of the world’s largest supply chains are exploring blockchain to transform their operations. The Blockchain Research Institute has already conducted two indepth studies on two pilot projects using blockchain to improve supply chain efficiency and transparency from Foxconn and Walmart respectively.

The report also cites some powerful new entrants in the market for supply chain solutions. Sweetbridge, an Arizona-based company, is one organization doing radical work to create more efficient supply chains. One way it does this is by easily leveraging the value of stranded, underutilized assets within those networks – like trucks or shipping containers – into more liquid tokens. The upshot is that your supply chain can effectively fund itself.

The conclusion? By embracing blockchain, companies and governments can reinvent their supply chains – turning them into cognitive machines that can radically lower cost, increase metabolism and speed, reduce intermediaries and improve quality. Trust is not achieved by intermediaries but by cryptography, collaboration and clever code. 

About:

Don Tapscott is the author of 16 widely-read books about technology in business and society, including The Digital Economy, Growing Up Digital and Wikinomics. With his son Alex Tapscott he is the co-author of “Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business and the World” and the co-founder of the Blockchain Research Institute, a think tank conducting 70 projects about blockchain opportunities and challenges. If your organization is interested in becoming a member of the Blockchain Research Institute, contact [email protected]