BLOCKCHAIN IN BUSINESS NETWORKS – TYPES AND DESCRIPTION
KIELTYKA GLADKOWSKI KG LEGAL constantly supervises and prepares its lawyers for the specialization in which they provide services for foreign clients. In order to systematize the conceptual grid of very specialized fields of IT, fintech, blockchain, KIELTYKA GLADKOWSKI conducts internal consultations to improve the experience of our lawyers specializing in legal assistance for foreign clients from the IT and TECH sector. As a result of such internal research, KIELTYKA GLADKOWSKI creates and publishes texts on topics related to modern legal problems, but also to explain the basic concepts of specialized technology and IT fields. In this way, KIELTYKA GLADKOWSKI aims to demonstrate to potential clients within specialized industries that our lawyers are also familiar with specialist terms necessary for a proper understanding of our foreign client’s business and legal needs, especially in relation to clients operating in all sectors of production with the use of blockchains as well as supply chains using blockchains.
This is one of those texts. We invite you to read it.
BLOCKCHAIN TECHNOLOGY APP IN FINTECH AND FOOD SUPPLY CHAIN IN THE TIMES OF GLOBALISATION
Blockchain technology is used to create entire comprehensive ICT solutions aimed at tracking and managing the entire chain of food production and sales. That is why blockchain is supply chain management, finance and the management of entities participating in the supply chain. Thanks to blockchain technology, it is possible to further develop globalization, and thanks to this, ICT platforms created for the global agricultural and logistics industry by global software giants such as IBM, for example, are automated. The possibilities of blockchain technology are additionally strengthened by the fact that ICT solutions created in blockchain technology are compatible with technologies such as data analysis or the Internet of Things.
Examples of blockchain application for IT solutions in logistics – 4 examples forming a block – blockchain
One of the widely advertised and described examples of the use of blockchain technology in logistics is the technology used in food logistics product management called IBM Food Trust. This ICT solution is based on blockchain-based SaaS solutions, the purpose of which is to exchange information between the consumer and each entity, increasing the transparency of the supply chain. IBM Food Trust distinguishes between dozens of types of actors involved in the supply chain, mostly farmers, food producers, wholesalers / distributors, logisticians, retailers, restaurants, and consumers.
Usually, tracking food by storing information in own and supplier’s ERP systems as well as on paper is a very long and error-prone process. Using IBM Food Trust’s blockchain innovation makes it easier to manage your supply chain.
To explain the practicality of the benefits of blockchain technology, the example given in the Internet is a very spectacular example of Walmart, which tracks a packet of sliced mangoes in 2.2 seconds, compared to seven days previously.
Blockchain technology provides traceability, security and decentralisation when dealing with data around food. Blockchain has the feature of immutability. Transactions cannot be altered or hidden as every change is tracked, recorded, and displayed to the entire network of people who have access to the information.
Blockchain is one of the most promising technological advancements in food fraud suppression. It digitizes secure transactions or “blocks” at every point along the supply chain, viewable directly by those with access to that blockchain ledger, which eliminates the need for intermediaries.
Traceability helps keep track of food in the supply chain, which supports the accurate withdrawal/recall of unsafe food, if required. The more information you keep, the easier and quicker it will be to identify the affected food, mitigate risks to consumers and save time and money.
IBM Food Trust™ is thus a collaborative network of growers, processors, wholesalers, distributors, manufacturers, retailers, and others, enhancing visibility and accountability across the food supply chain.
Companies using IBM Food Trust for Food Supply Blockchain Platform include: Walmart Inc., a United States based Retail organisation with 2200000 employees and revenues of $559.15 billions, Nestlé, a Switzerland based Consumer Packaged Goods organisation with 273000 employees and revenues of $94.27 billions, Golden State Foods, a United States based Distribution organisation with 7000 employees and revenues of $6.90 billions, Dole Food Company, a United States based Consumer Packaged Goods organisation with 36000 employees and revenues of $445.5 millions and many others.
TradeLens
Another example of using blockchain in logistics and production is a solution referred to as TradeLens, formerly known as Global Trade Digitization, co-released by IBM and Maersk. It is an open and neutral supply chain platform underpinned by blockchain technology. It enables true information sharing and collaboration across supply chains, thereby increasing industry innovation, reducing trade friction and—ultimately—promoting more global trade.
TradeLens is promoting a new era in global supply chains—one where all parties can collaborate, share data, and realize the benefits of digitization.
TradeLens data is published directly from the source so the right people can securely manage their supply chain in real-time. TradeLens breaks down longstanding data and processing silos that exist among trading partners and simplifies the flow of documentation that accompanies every shipment
The platform automates the process of managing cargo documentation. It allows you to share cargo details, exchange documents. By digitizing the entire process, authorized parties can access data on the platform. It is the only data source, keeping it secure and eliminating the need for manual data reconciliation. Additionally, when the shipping plan changes, the information will be updated and the new arrival point will be shown.
we.trade Innovation
Another example of the use of blockchain technology is the we.trade platform. we.trade Innovation is a joint-venture company owned by 12 banks, technology provider IBM and global credit bureau and business information provider CRIF. The company was started with nine banks in January 2017 under the project name Digital Trade Chain and was officially renamed as we.trade in October 2017. we.trade has developed a digital trade platform based on the Linux Foundation’s Hyperledger Fabric that runs on the IBM® Blockchain Platform. The we.trade digital platform delivers reliability, simplicity and security to global trade transactions across trade finance and logistics. Clients can register for we.trade through their banks.
Through distributed ledger technology and smart contracts, the platform provides a secure, innovative environment for banks’ commercial clients engaged in import/export transactions to trade in a user-friendly and efficient way.
The category of users of this ICT solution includes all entities participating in the financial transactions, including: the buyer, the buyer’s bank, the seller and seller’s bank, as well as transport companies, and in the further development, insurance companies, transport companies and customs agencies. At the same time, technology can manage and record the entire process, from ordering to payment, once the order is completed. The platform also aims to automate payment for the entire transaction. We.trade is a platform used by Deutsche Bank, HSBC, KBC, Natixis, Nordea, Rabobank, Santander, Société Générale and UniCredit, which have worked with IBM to create a platform to track and manage commercial transactions between small and medium-sized businesses.
We.trade is based on the IBM Blockchain Platform using Hyperledger Fabric. It can be accessed from any connected device that is built with Application Programming Interface (API) layers.
World Wire
World Wire is another example of a comprehensive platform based on blockchain technology and intended for financial institutions offering clearing and settlement services. It acts as a network provider for international payments and uses cryptocurrency, stablecoin, or a central bank’s digital currency. World Wire was created to help financial institutions remove problems with cross-border payments, focusing on speed and ease of transfer. Transfers between countries require several intermediaries for clearing and settlement, which generates costs and additional time. Blockchain used by the platform means that interbank settlements are carried out within seconds.
World Wire is based on the Stellar Open Source Protocol – a decentralized open source protocol for cross-border transactions, launched in 2014 and supported by the non-profit Stellar Development Foundation. World Wire makes it possible to operate on digital tokens. Banks that are users of the platform, including Banco Bradesco, South Korean Bank Busan, and Philippine Rizal Commercial Banking Corporation, have pledged to issue their own (fiat-backed) stablecoins on the World Wire platform.
It is a hybrid blockchain network that has the characteristics of both licensed and unauthorized systems. All parties that transact with each other must agree on a bridging currency (digital token) that is used to clear and settle payments. IBM operates and maintains the platform.
The text was prepared based on the analysis and assessment of available sources such as:
Report: Blockchain in production: Four live and growing blockchain based business networks, August 5, 2019, By Csilla Zsigri (report, licensed to IBM, developed and as provided by 451 Research, LLC)
https://www.ibm.com/blockchain/solutions/food-trust
https://www.frontiersin.org/articles/10.3389/fbloc.2020.567175/full
https://www.appsruntheworld.com/customers-database/products/view/ibm-food-trust
