The integration of artificial intelligence and the Internet of Things (IoT) will drive the commercial adoption of blockchain, a complementary technology that has the potential to significantly reshape industries.

This is considering its ability to lower costs, reduce transaction settlement times and improve cash flow, as well as greatly advance the movement of materials by facilitating trust, transparency and value exchange across business ecosystems.

Frikkie Eloff, Regional Manager of First Technology Group’s Limpopo and Mpumalanga operations, says that it also has a critical part to play in identity management by enabling “smart” contracts where events can trigger actions, such as the payment for goods and services when they have been received.

“A digital technology that underpins cryptocurrencies, such as bitcoin, blockchain is essentially a large register of transactions that is maintained by a network of computers on the internet,” Eloff says.

“Users own an updated version of a log which they modify with agreement of the majority of the system. This overcomes the many limitations of traditional centralised registers, namely traceability and visibility, largely due to a lack of standardisation and a means of sharing data in a trusted manner across a large network of participants.”

In the transport logistics sector, for instance, these networks could include thousands of shippers and carriers operating on land, sea and air. This is in addition to freight brokers/forwarders, third-party logistics providers, insurance companies, customs agents and end customers.

One start-up has already developed technology that provides end-to-end visibility on a single platform. Spanning all shipping modalities, it is able to execute smart contracts between shippers and carriers by using individually encrypted geographic waypoints to enhance transaction time and eliminate broker fees.

Moreover, a transparent and accurate means of record-keeping will make it easier to ascertain whether products are making their way to customers and more difficult for cargo to go missing while in transit. This mitigates fraud and theft, including so-called “fictitious pick-ups”, where falsified documents are presented by criminals at a dock to collect a shipment.

Work is also forging ahead on the development of an agnostic platform that uses smart contracts and external sensors to track environmental conditions for pharmaceutical products in transit, as well as to verify the execution of smart contracts.

Other companies that have also responded to the onerous demands of the highly-regulated European Union pharmaceuticals sector include DHL and Accenture which have partnered to develop a blockchain-based supply chain prototype. This is in line with DHL’s drive to create more efficient networks through digitisation, which includes the “serialisation of products that can be tracked through their entire lifecycle”.

Meanwhile, a Hong Kong-based company has developed a technology that uses an Ethreum platform to eliminate cargo rollovers and “no shows”.

Shippers and carriers agree to a TEU token deposit that is forfeited if either party does not meet their contractual commitments.

At the same time, IBM is working with Walmart, Nestlé, Unilever and Dole to harness blockchain technology to improve the monitoring of food supply chains, with the focus starting at the farms and ending at the merchants who sell the fresh produce to provide faster and more accurate recalls.

Notably, DeBeers, the world’s largest diamond producer, has developed what is claimed to be the first industry-wide blockchain to track gems every time that they change hands. It also starts at the source – in this instance the mines from where they are extracted.

“While it is impossible to achieve a radical change in the way in which information is managed and recorded overnight, considering the sheer magnitude and complexity of such an undertaking, organisations are starting to evaluate the potential of blockchain over the longer term. This is considering the significant potential it provides for disruption and revenue generation,” Eloff says.

First Technology Group is a leading developer of sophisticated information communications technology products, as well as cutting-edge cyber-security solutions that collect, aggregate, monitor and normalise data from IoT devices to pro-actively mitigate the risk of cyber-attacks.