What's driving the renewed investor interest in blockchain? Galaxy Digital Holdings Ltd. (TSX-V: GLXY) (OTC: BRPHF) founder Mike Novogratz recently stated that the necessary financial infrastructure required to support institutional investors is now falling into place. Institutionalization is particularly significant in this space because it brings much-needed stability, counteracting the previous wild fluctuations in pricing. With major firms like JPMorgan Chase & Co. launching a stable coin called the JPM Coin, the institutional watershed is now "just getting started."
Recent cryptocurrency scandals notwithstanding, Blockchain technology bring a range of benefits such as more transparency, better traceability, reduced costs and higher efficiency, as well as faster transactions. High on that list, however, is a more secure and safe way for multiple parties to share information.
For instance, blockchain could realize its potential of transforming the backbone for all trade and commerce in the 21st century by integrating with the world's logistics and supply chain systems. Companies who seek to do this have little to do with cryptocurrencies. Platforms such as Litelink Technologies' (CSE: LLT) (OTCPK: LLNKF) 1SHIFT platform are now effectively digitizing the supply chain, using blockchain's smart contract distributed ledger technologies to manage trust and transparency across an integrated digital ecosystem of shippers, third-party logistics providers (3PL), trucking carriers and even customs brokers and factoring companies.
1SHIFT is set to revolutionize the transport industry by enabling all parties in the logistics industry to share information digitally on the blockchain. The platform differentiates itself from billion dollar logistics apps such as Flexport and Convoy by linking every stakeholder in the logistics industry onto one single platform through the blockchain, thereby facilitating secure end-to-end communication. Using AI-driven analytics, 1SHIFT improves tactical and strategic decisions within the industry, reducing the likelihood of human error, while optimizing on performance and speed.
Supply Chain Innovation – Audit & Dispute Resolution
Perhaps the greatest advantage of incorporating distributed ledger technologies into a digital supply chain is the subsequent creation of "digital trust." For instance, the blockchain can create an immutable audit trail for all users, effectively resolving any and all disputes. Dispute resolution between carriers and shippers has long been a major source of frustration within the industry. When these disagreements arise, they are difficult to arbitrate—truckers cannot, after all, offer proof of arrival—a situation that costs unneeded fees, penalties and aggravation.
To address this, the 1SHIFT system uses GPS location data and geofencing to record the time and location of the trucker's arrival and uploads it directly to the blockchain, where it can't be reversed or modified. Once they arrive, the trucker then scans the signed bill of lading, which is also uploaded onto the blockchain ledger and processed using AI algorithms to ascertain whether there were exceptional conditions present at delivery. Through LiteLink's proprietary adversarial permissioned blockchain platform (based on JPMorgan's Ethereum-based distributed ledger protocol Quorum), 1SHIFT ensures an immutable shared record between all parties, which quickly reduces dispute escalation.
1SHIFT also provides early warning for potential future disputes, allowing everyone to proactively seek solutions rather than point figures after the fact. Disputes that are escalated are done so quickly and with minimal belligerence. That means no more angry phone calls, lost sleep, money or time.
Building Digital Trust Through Ratings Engine
Another way the blockchain instills "digital trust" between logistics parties is by bridging the lack of confidence between shippers and carriers without previous work histories through 1SHIFT's ratings engine. Adding an extra layer of accountability, this ratings engine provides insight into the previous performances and market prices of its pre-approved carriers.
New carriers and shippers rate each other based on multiple different factors, including punctuality, communication, and prompt payment. Since all relevant data points are available through the platform, ratings are based off verifiable data, and results are aggregated to provide an overall rating, ensuring a fair overall assessment.
This ratings engine is built on the blockchain, meaning that the information is secure, transparent and trustworthy. Trust is generated between shippers, third-party logistics providers and carriers, who can view every aspect of the operation in real time, encouraging transparency and honesty.
Other Players On The Move
Now with blockchain poised to make an outsized impact on the way we do business going forward, it's likely we'll see some major moves from players in the blockchain technology space.
Riot Blockchain Inc.'s (NASDAQ: RIOT) recently announced a $3 million bridge financing with a syndicate of lenders. Riot's 8,000 cryptocurrency mining machines are fully deployed and the company has stated their costs have been reduced by approximately 24%. The company planned cryptocurrency exchange RiotX is still in the works with a launch plan scheduled to be operational in twenty-four states in the near future.
Another notable player in the blockchain space is HIVE Blockchain Technologies Ltd. (TSX.V: HIVE) (OTCQX: HVBTF) recently announced an up-listing to the OTCQX. The OTCQX gives Hive additional liquidity and exposure for existing and future US Investors. HIVE's state-of-the-art GPU-based digital mining facilities in Iceland and Sweden produce newly-minted digital currencies like Ethereum, continuously as well as ASIC-based capacity which produce newly minted digital currencies like Bitcoin.
Major financial corporations that have their own blockchain initiatives include HSBC, IBM, Accenture, and Deloitte, with JPMorgan Chase & Co. (NYSE: JPM) being the first US bank-backed crypto-currency. US investment bank JP Morgan as created a crypto-currency to help settle payments between clients in its wholesale payments business.
We'll likely hear about major investments from these and other companies in 2019. Still, it's looking like blockchain will shake the world by powering the digital transformation of the world's next-generation supply chains, rather than with cryptocurrency.
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