In an increasingly networked world, many industries are turning to blockchain, crypto, or distributed ledger technology (DLT) solutions to enable a whole new class of use cases. They involve the two most basic mechanisms of this new wave of technology: sensitive information sharing and networked interaction without the need for a central intermediary.
This is set to have a big impact on business soon. For example, when driving economies forward, knowledge and research are sometimes overlooked. In fact, scientific breakthroughs have been one of the core drivers of increased productivity and better outcomes over the past 50 years. Which products are around you, which medicines you take, and the way you travel are the direct results of the worldwide scientific research community, often requiring several institutions to work collaboratively.
Since the goal of the research industry is to generate useful and accurate information for society, the previously mentioned strengths of DLT (information sharing and decentralization) are particularly relevant. DLT quantifies and manages the legal tender of this domain – raw information.
Supply chains suffer from the same issues as research does: slowness of centrally planned transaction facilitation (think cargo insurers and government inspections) and information asymmetries (consider the buyer who doesn’t know if a grain shipment is actually in good condition or not).
Between the research and supply chain industries, the “killer app” for DLT might be one of these domains. Let’s look at how this technology might address shortcomings in these industries, and what technology will be needed to do so.
Research and academia
University research generates a very intangible and complex product as the fruits of its labor. Research consortia and university alliances often involve millions or billions of dollars. There are incredibly complex issues relating to profit sharing, insurance, copyright, and research integrity itself when multiple actors collaborate to further the goals of science.
So, we are left with a situation wherein mountains of paperwork are needed in order to agree on the terms of collaborative research. Once the data for research is collected, there is then the issue of security and integrity – much data generated in medical research, for example, could be of immense value to other researchers, but it is hard to sell this data securely and ethically.
The solution is to store and log data on a decentralized ledger that makes all of that data traceable, immutable, easy to share with other organizations, and secure. In a complex consortium of researchers, this means more money and better research.
Supply chain and logistics
Moving goods from point A to point B always involves trust and uncertainty. At the point of physical handover in a transaction, there’s always the possibility of failed or opportunistic behavior on the part of one or more actors, and it is when goods are transported that damages can occur.
Ledgers can address both those issues. In a smart contract and IoT-leveraged world, there could be a record and an automation agreement at every step of the business transaction.
QR and RFID sensors, tokenized smart assets – the shipping container of the future will have more code and IoT linked to it than paperwork.
But this last example raises a big question – how? Anyone familiar with Bitcoin’s (at times) exorbitant transaction fees and confirmation times will raise their eyebrows at the thought of all these transactions and the collaborative ledger design that would be involved in academic and supply chain systems.
Luckily, ledger technology is not monolithic, and a whole section of the crypto industry is working on making DLT better. Among the more relevant ways in which this is happening, some projects are looking at changing the very design of blockchains to make them more powerful and better at processing the thousands of transactions per second needed to support large datasets or supply chains.
A promising development involves the rethinking of the data architecture of the ledger itself. A new format called tangles, or Directed Acyclic Graphs (DAGs), uses a mesh instead of a chain-type setup that requires much less computational power and resources to run.
Ledgers of the future
Research and supply chains are about managing information in a decentralized way. This is the main purview of crypto technology, so it is no surprise that crypto is having a significant impact. It is also interesting to watch companies like IOTA (which provides a DAG for sensors) and CyberVein (which uses a redesign of the DAG to make data transfer possible peer-to-peer and at scale).
Whether DAGs replace blockchain technology entirely over the coming years is anyone’s guess. It could be that blockchains become outmoded, or that DAGs settle into a niche that blockchains were simply never designed to handle.