The Way Online Shopping Disrupted Retail, Blockchain Is About To Do To Freight And Logistics
Back in the 1990s, a young entrepreneur by the name of Jeff Bezos had an idea.
He wanted to bring the experience of walking into a bookstore and choosing a book, digital. Bookstores, he thought, were inefficient, and was a simple enough shopping experience to replicate for a customer sitting in front of their fuzzy, AOL-connected computer screen.
Today, Amazon is the undisputed champion of retail. If you want to buy something, any consumer good at all, you don’t search for nearby electronics stores in your area. You pull out your phone, turn to your friend on the couch and say, “I’m going to AmazonPrime us a new keyboard. It’ll be here tomorrow.”
Now, even if Bezos had designed this grand vision in his head two decades ago, the truth is, all the puzzle pieces weren’t there yet for him to execute it. The Internet was in its infancy. Consumer behaviors hadn’t shifted yet. Smartphones didn’t exist. The list of unsolved variables goes on and on—until industry after industry began to solve for each issue individually, and Amazon could begin capitalizing accordingly.
This story of innovation has been told time and time again. And after each major disruption—Apple’s iPod destroying the physical CD market, Hulu and Netflix eating up Blockbuster stores—there is a calm that settles before the general public says in unison, “How did nobody see this coming?”
That’s precisely what is about to happen with blockchain technology.
In the same way online shopping has entirely disrupted retail, blockchain technology has only recently begun making headlines but has already proven itself to be the “secret sauce” missing from some of the world’s largest industries.
For those that don’t know, blockchain technology built on a decentralized network, meaning no single “party” owns all the data. Instead, data is tracked and stored on a public ledger (block after block connected in a chain) that cannot be tampered with or altered later—since each block is verified by all the other blocks on the chain.
This technology, and really the concept as a whole, is the epitomized opposite of how the world of big business operates. Nationwide and global companies, all the way down to small-shop operators, tend to use private and centralized software systems and solutions. Banks and the modern financial system is a perfect example. If I want to send you money, I have to go through a bank in order to verify the transaction—the bank being the “centralized” hub for verification. But through the blockchain, the very building blocks that power cryptocurrencies like Bitcoin and Ethereum, that centralized entity no longer has a purpose. It doesn’t have a job. There is no need for its services because the blockchain does the verification automatically.
If you want to know how, in a single year, Bitcoin went from $900 to $7,000+, it’s because of this, right here: blockchain technology.
Now, let’s take that same framework and apply it to something other than banking and finance. Instead, let’s apply it to the world’s freight and logistics systems.
In the same way a dollar has to pass through a bank, a package has to pass through more than one centralized hub in order to move from original supplier to end consumer.
The current process for sending a package or good is a sort of relay race between manufacturers, brokers, shippers, carriers, and retailers, all of whom are their own private entities, and all of whom work toward different incentives. To say that the freight and logistics world is one well-coordinated song and dance would be a massive over-exaggeration. The truth is, most suppliers have very little insight into how their shipments get to their end destination. All they care about is that they arrive—and that’s a huge problem.
A blind Hail Mary pass, there is so much room for improvement in the freight and logistics space. And the biggest reason why those improvements are long overdue is because an effective technological solution hasn’t existed yet.
Blockchain technology is the answer—not just for freight and logistics, but any big industry struggling to track, monitor, and automatically fulfill order requests along a complicated series of checkpoints.
ShipChain, for example, is a blockchain platform diving deep into the freight and logistics space, solving for obvious pain points other centralized systems have yet to solve. It is tackling everything from fraud and stolen goods, to unnecessary broker markup costs, poor communication between suppliers and shippers, and order fulfillment automation upon delivery. And with big names like Kevin Harrington and Joel Comm on ShipChain’s advisory board, the blockchain space has already matured past the point of speculation. Noteworthy entrepreneurs in every industry are seeing its potential and looking for ways to be part of the disruption.
Since the start of 2017, all eyes have been on Bitcoin and Ethereum. However, for as much attention as the cryptocurrencies have received, Ethereum’s underlying technology and the use cases for blockchain have only exploded.
In 2018, blockchain disruption will be a hot topic, and absolutely something worth studying. Freight and logistics, banking, these are just two examples. But blockchain will make its way into the world of pharmaceuticals, food and agriculture, music and entertainment, and so much more.