Blockchain needs IoT for a fully Trusted SupplyChain

I was holding onto this post until I attended the Consensus 2018 NYC Blockchain summit to get more dope, reference and “Finality” to my thinking around the adoption of IOT for Blockchain to make Blockchain real....The Microsoft session and the eye opening session from the Ports and Shipping hubs spilled 2 important aspects to throttle up some chain of thought on embracing IoT on the SupplyChain Blockchain use-case

Image Courtesy: hackernoon
https://hackernoon.com/when-iot-meets-blockchain-%EF%B8%8F-892fecdaf00c
(This hackernoon post, thank you for addressing something that will be my follow-up posts where the Blockchain will help the IOT, in my current post I'm trying to emphasize how IOT is an enabler for a perfect supplychain ledger...

Moving on...

1. Even if your data is on the chain it could be fake at the source, it’s like having an immutable ledger of garbage/fake attribution.
2. IoT could seem expensive during ROI manifestation, however to make the ledger concrete, digitization of the physical Asset with IoT framework will provide the real pulse of “Tamper resistant”(imagine a Cryptographically enabled lock for a trailer Refrigerator carrying meat being both digitized and IoT moderated) will serve digital read and sensor protection from Shenanigans.
3. Stripping out the current backend systems or legacy processes to embrace new is not the norm, there has to be interoperability and application rationalization twined into the discovery phase of any project or prototype.

All these pointers coming from Anil John at the DHS were extremely eye opening to help curate the proposition of Blockchaining current state to help participate in the hype oriented rat race....

Whether it’s a farm to fork use case or a global trade use case or any supplychain use case, IoT makes the deal “Real”.

...having stated that I’ll broadly pie out SupplyChain into major areas in the enterprise where a “Transfer of Value or a Transfer of Asset” occurs from point to point in the process moving forward.

• Forecasting & Planning
• Ordering , Receiving , Quality Management and PutAway
• Picking and Packing
• Distribution & Logistics
• Transportation & Freight Management
• Asset & Inventory Management
• Returns

The whole mix of trade compliance kicks in for cross-border SupplyChain attribution.

Each of these areas are so complex and transaction heavy that systems of record fail to keep up with all kind of needs, needs can be scalability, Security, trust between parties, digitization, regulation, Reporting , Auditing and anything that requires constant scrubbing of the IT strategy that helps keep the SupplyChain cranking to help Run “Business as Usual”.

With the spin of “how Blockchain can help SupplyChain boost potential” has made it easy to talk but a difficult task to accomplish off late with every one trying to lobby in use cases 40-50% of them don’t even sound convincing.

Most customers say they are ok to live with the current framework of enterprise software and third party help to maintain operations, some customers understand that there could be value with the Blockchain “tech disruption” and the rest of the herd falls under the “Let’s wait and watch and embrace if successful and when it gets to mainstream adoption”.

Being a customer today I also identify into a hybrid one on these quadrants.

But I fully agree that If Blockchain can deliver value over the existing framework it has to differentiate itself substantially to go mainstream, there has to be a trust in the model and a bigger trust in the use-case itself.

Most times in the Blockchain space the Solution is trying to derive the problem. That’s the worst way of solving any problem statement. However since it’s an emerging concept not that easy to understand and digest , the reverse engineering approach doesn’t hurt if it leads to an appropriate use case.

The digress from the topics core relay ....was to give a pulse of the customer sentiment and creates a Segway into enablers, IoT being a very important one...

Unless there are Devices that can scan ,record, tape and manifest proof on-chain about ,what’s happening at the source, there cannot be any differentiation to looking at the same data that’s everyone is used to.

Ex we can still track Provenance indirectly if we used a BPM based tool centrally with all process touch-points looking forward or backward without a Blockchain , but that’s missing key concepts related to the “Trust Model”.

That data can be manipulated if required to prove a point or influence a Material Impact to the Manufacturer or the Supplier, proving anomalies can be very difficult or close to impossible due to centralization and a close looped process even though they are digitally integrated between the parties via a Business Network or a point to point system...

Blockchain with IoT makes it REAL

And how is that ?

• Instead of a Centralized Database there will be a Decentralized Distributed Database or a ledger as we call it and all the transactions will be recorded there.
• That Chain will hold all data coming from sensors and connected smart devices , enterprise software, business network with curated attribution that will benefit all parties with different visualization and interaction modes with the Blockchain ....it will provide “a real feel of tracking what’s happening at the source and how” and provide a sense of belief with all possible attribution and visual feeds.
• All Parties will have a copy of the ledger which is immutable once Finality of a block holding transactions is hashed and signed using cryptography.
• Identified parties will be selected to provide Finality based on what is at stake for whom and how much from a “stake” standpoint.
• Most people are confused if mining is mandatory & in the process happens to be the only way to verify proof of work on-chain, its not and it took sometime for me to get that understanding as well.
• Currency and Mining can be decoupled from the chain, its not mutually exclusive !
• An IoT enablement coupled with a smart sensors recording and attributing process, constantly feeding the chain will deliver a “metadata with meaning” that’s cryptographically secure.

And finally the IoT will be the only way we can enable a virtual tracking mechanism that can feed the chain

Feed from “sensors” can be

• an image
• a video
• a graph of performance
• a Certificate of inspection
• a Chain of Custody artifact
• a simulation of proofs
• a cryptographically hashed QR code directly on an Asset
• a Cryptographically etched asset
• An RFID tag with the hash and a reference to the block

These are the ways it will be able to differentiate itself from the core enterprise software delivered processes.

Also note that using IoT we can define a new end to end Blockchain governance process that can now connect and make responsible selected parties available on-chain that were never integrated earlier, sharing an immutable ledger running on their nodes will craft a very neat data set that can be relayed to the same parties in a way that data and reporting becomes useful to them to help accelerate or help achieve efficiency with the Blockchain enablement.

Before I installed the NEST thermostat, I would keep a track of how long did I use the heater or a cooler and I would change the air filter when I thought it was time

NEST IoT report now allows me to review stats visually on energy consumption and sends me reminders and also a plan on how I should be more energy efficient and environmentally responsible.

I’m sure in the days to come the analytics of IoT will be top notch putting current enterprise analytics software reporting to shame.

Enterprise use cases 

(A) IBMs Watson IoT is changing by the world and with the Maersk collaboration will save billions of dollars on cross border container tracking and all sorts of line of credit related vetting and transaction recording and monitoring on chain making that ledger available to all parties in the SupplyChain.

IBM Maersk approach looks not just to alienate the use case to Maersk but open the idea to the ocean carriers creating a consortium to help get cargo on the blockchain mainly looking at the Letter of Credit and other natural barriers improving global GDP by 5-6%

(B) Everledger has revolutionized the diamond industry and the more I de-code their success it leads me to their adoption and embracing the element of RFID , IoT in the process making it REAL.

Conclusion:

We don’t want an “immutable ledger of garbage” if we are serious about embracing a distributed ledger technology into the SupplyChain, only IoT can make this real and compliment the real “Trust” aspect.

We need to work hard securing these devices from bad actors and that’s why we need Blockchain in retrospect to make this happen.

Next Post: Why Blockchain is required to secure IOT a converse of today's narrative
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PS: Please read the hackernoon post on 

When IoT meets Blockchain

https://hackernoon.com/when-iot-meets-blockchain-%EF%B8%8F-892fecdaf00c