The supply chain industry has been around for centuries, and has undergone many changes over time. From the Industrial Revolution to the age of automation, advancements in technology have played a significant role in shaping the supply chain industry. However, the latest technology that is changing the game in the supply chain industry is cryptocurrency.
What is cryptocurrency?
Cryptocurrency is a digital or virtual currency that uses cryptography for security. It operates independently of a central bank and uses a decentralized system to verify transactions. The most popular cryptocurrency is Bitcoin, but there are many others, such as Ethereum, Ripple, and Litecoin.
How is cryptocurrency changing the supply chain game?
Cryptocurrency is changing the supply chain game in three main ways:
- Increased transparency and traceability: Cryptocurrency uses blockchain technology, which provides an immutable and transparent record of all transactions. This allows for increased transparency and traceability in the supply chain, as all parties involved can see the movement of goods and funds in real-time.
- Reduced transaction costs: Traditional supply chain transactions often involve multiple intermediaries, which can increase transaction costs. Cryptocurrency eliminates the need for intermediaries, as all transactions are peer-to-peer, resulting in reduced transaction costs.
- Increased efficiency: Cryptocurrency transactions are processed much faster than traditional supply chain transactions, which can take days or even weeks to complete. This increased efficiency can help supply chain companies to streamline their operations and reduce costs.
Examples of cryptocurrency in the supply chain industry
Several supply chain companies have already started to incorporate cryptocurrency into their operations. For example:
- Maersk: Maersk, the world’s largest container shipping company, has partnered with IBM to create a blockchain-based platform for tracking cargo. The platform, called TradeLens, uses cryptocurrency to facilitate cross-border transactions and reduce transaction costs.
- Walmart: Walmart has been experimenting with blockchain technology since 2016, and has used it to track the origin of food products. In 2019, the company filed a patent for a cryptocurrency-based system that would allow customers to resell items they no longer need.
- De Beers: De Beers, the world’s largest diamond producer, has started using blockchain technology to track diamonds from mine to retailer. The company’s blockchain platform, called Tracr, uses cryptocurrency to facilitate secure and transparent transactions.
Cryptocurrency is still in its early stages, but it has the potential to transform the supply chain industry. Increased transparency and traceability, reduced transaction costs, and increased efficiency are just a few of the benefits that cryptocurrency can bring to the supply chain. As more supply chain companies start to incorporate cryptocurrency into their operations, we can expect to see even more innovation and disruption in the industry.