How Will Blockchain Transform the Consumer Electronics Industry?

The multi-billion-dollar consumer electronics (CE) industry is one of the most dynamic industries. Over the past couple of decades, it has undergone rapid changes with the market being primarily governed by the way products are being positioned, purchased and re-ordered. Furthermore, the industry is also underpinned by endless chain of innovations leading to an amazing array of products to suit every need and wallet. Apart from this, the emergence of middle-class families in developing countries and the cost-cutting strategies used by some major CE players to meet new customer demands has also contributed to the growth of the global CE industry.

The industry is further driven by evolving sustainability concerns, changing regulatory pressure and implementation of contract manufacturing. While the consumer demand for cheaper and better-quality devices is reducing product life cycles and leading to obsolescence, new products are quickly making their way into markets. This has endowed the industry with abundant opportunities for growth. To leverage the opportunities presented by the boom in consumer demand, CE businesses need to manage the growing complexity in manufacturing either by streamlining the existing forecasting, tracking, distribution and inventory management strategies or devising new ones that are integral to supply chain management.

Since, the supply chains in the CE industry span over several stages of production and geographical locations, the need to have in place a robust and sophisticated system for streamlining the complex CE supply chain becomes evident. Blockchain – a revolutionary technology that draws on the capabilities of big data and digital technologies can be leveraged for mitigating the pain points of the CE supply chain.

How Does Blockchain Help?

Blockchain-to-transform-electronics

Increased Transparency: Every electronic product that we use today passes through a long journey of people, place and resources. This makes it difficult to trace the origin of these commodities, as well as the investigation of events (environmental damage) that might have occurred during the journey of products within the value chain. Since, there is no reliable way to verify the actual value of a product, consumers usually end up paying inaccurate estimation of the true production cost. Blockchain enables the tracking of the products moving within the supply chain ecosystem right from the point of manufacturing till it reaches the end-consumers. This ensures prevention of theft and counterfeiting.

Read about: Blockchain for Electronics Industry

Maintains Tamperproof Record of Transactions: The transit of goods and the transfer of ownership across the supply chain can be tracked on a blockchain ledger in a synchronized way. Blockchain being immutable and a decentralized ledger does away with the chances of a single-point failure due to the presence of consensus mechanism, which requires every transaction to be validated by all the participants of the supply chain.

Provides Digital Identity for Ownership of Goods: The CE industry is one of the industries that is most affected by counterfeiting, which not just damages the economy but also threatens the safety of consumers. With a Blockchain based solution in place, manufacturers can leverage the digital identity tools for ownership and packaging of goods. This ensures the tracking of highly valuable electronic items across the logistic supply chain.

Ensuring Supply Chain Integrity: With an iOT powered Blockchain solution in place, location-specific information regarding the state of the product or commodities moving down the supply chain is registered on the Blockchain ledger. The smart contract functionality of the Blockchain solution defines, as well as automatically enforces the contract terms and conditions in a secure and real-time environment thereby ensuring greater supply chain integrity.

Final Words:

As value chains expand across companies and geographies, organizations dealing with CE products face an increasingly complex market. Blockchain – a distributed ledger technology can offer significant benefits and revolutionize the industry by helping organizations manage or remove inefficiencies and optimize on cost of product and most importantly consumer trust.

How Blockchain Addresses Issues Surrounding Data Ownership and Privacy?

Social media giant Facebook recently had to bear the brunt of regulators for mishandling user data. According to report shared by New York Times, Facebook had shared sensitive user data with more than 60 device makers, including Apple and Samsung thereby staking confidential data of millions of users. While the internet giant has blatantly refuted all the allegations levelled against it and has constantly tried to justify its stand, the fact remains that its user data has been spread or hacked way beyond boundaries that are no longer within the control of the company. This and constant drumbeat of similar other high-profile instances have pushed the tipping point when people have started believing that the internet they have been relying on is actually broken.

What is the Reason for Erosion of Data Privacy?

Erosion of data privacy happens when businesses and individuals share the details of their activities on the public domain. This exposes their confidential data to third-parties who monitor, store and use their data for their personal gain. Furthermore, breakthrough in technological innovations has further added to their woes wherein data could be linked back to an individual even after the individual opts out of a particular platform where they might have shared their personal data. Additionally, the digital data has an inherent risk that you loose the right to data as soon as you share it online. It can be distributed to unintended recipients without your knowledge or control.

Impact of Data Generation on Privacy?

Over the years thousands and millions of terabytes of personal data has been generated. So, it makes sense if users consider a platform’s designs before sharing their data, which determines whether a company acquires and uses these data for benefitting or exploiting consumers. While certain privacy focused legislations such as the GDPR (General Data Protection Regulation) have been brought into place to protect individuals from the menace of data theft, the recent events of unsolicited data harvesting and data hacking with some top-notch internet giants prove that compromise of stored data has now become a matter of ‘when’ and not ‘if’.

How Blockchain Fits into the Equation:

Blockchain to ensure data safety

Since, legislation isn’t likely to make much of a difference, there arises the need for a technology solution that can do away with the loopholes of the current centralized data storage system used by third parties. Blockchain – A distributed ledger technology (DLT) acts very differently from the centralized system of storage by transferring ownership of information along with the data from one system to the other rather than just copying and pasting information from one computer to the other.

Furthermore, the private-public architecture of Blockchain ensures data privacy in digital format. Blockchain uses cryptographic keys and hashes to provide a secure way of storing and managing data, including personal information. A new method of protecting personal information using Blockchain technology is by using Homomorphic Encryption’ that allows computations on encrypted data without the need for decrypting the data. This means data security and privacy can be ensured while computations are done on it. So, only users with proper decryption keys can access the details of the transaction.

Also Read: Can Blockchain Technology be ‘The Approach’ to Cyber Security?

This happens because data that is stored on the distributed ledger is immutable and is managed through consensus, which is gathered from all the participants of the network. This provides users with better control over their data thereby allowing them to choose who can have access to their information and that too after paying for getting the privilege. So, it could be inferred that Blockchain being a decentralized database allows for data replication across several unrelated nodes but doesn’t allow any specific node to assume control of your data or act as gatekeeper as it happens with centralized bodies.

The Way Ahead:

Today, most of our private/ confidential information shared by us is either present in databases of different companies or on the internet, which in turn is a centralized body. As a result, our sensitive data lies at the disposal of few players who tend to control and make the most of this sensitive data. With data growing at an exponential rate, it doesn’t come as a surprise that data privacy will continue to erode. As a result, the control and ownership of data should remain with the users rather than with any third-party who can misuse it for personal gains. With a Blockchain based solution in place, issues related to erosion in privacy could be reduced significantly.

Apart from this, making regulations about gathering, storing and distributing sensitive data becomes simpler with a Blockchain based solution. Moreover, Blockchain also allows documenting terms and conditions within itself in form of smart contracts, which in turn ensure increased transparency. Also, since, the ledger is tamper-proof, it acts as a legal evidence for data accessibility and storage. In a nutshell, Blockchain technology has revolutionized the way data privacy and ownership were managed till now by safeguarding the interests and rights of its actual owners.

Sofocle has been at the forefront in the space of Data Privacy and Security using Blockchain. Our product Certiza features a data security protocol for digital record management including wallets.

Streamlining the Cold Supply Chain with a Blockchain Powered Solution

The supply chain ecosystem has become extremely complex with an ever-increasing number of players involved in developing, manufacturing, marketing, and distribution of products. One of the most indispensable links of the supply chain that concerns the transport, as well as storage of temperature-controlled logistics (food and pharmaceutical) is the cold chain. Over the years, the cold supply chain landscape has undergone major changes, with 90 % of nearly all shipments making up for controlled room temperature products (CRT). However, managing the Cold-Chain integrity for perishable food items and biopharmaceuticals such as vaccines has become challenging with half of the products being lost in transit leading to escalating costs and low accessibility.

Research report revealed by World Health Organization claim that every year, around 400,000 people across the globe die from foodborne illness, with every 1 in 10 people suffering from illnesses from food contamination. Furthermore, pharmaceutical companies are facing increased regulatory pressure to ensure the quality and potency of medicines in transit or in storage as nearly half of them either get lost or contaminated as a result of exposure to unsafe temperature ranges.

These statistics speak volumes about the grim realities of the food and pharma supply chain ecosystem. Moreover, the inefficiency of the current track and trace system has led to severe financial, as well as reputational damage for FMCG and pharma companies. Furthermore, being time and temperature sensitive safe delivery of these products become extremely crucial. This creates an urgent need to bring in place an intelligent supply chain solution that could provide better supply chain visibility by tracking the journey of a product from beginning till the end.

Blockchain – a decentralized and distributed ledger technology could help reconcile the complexities of the cold supply chain ecosystem by speeding up logistics, reducing discrepancies, increasing cost-savings, streamlining processes and increasing visibility of products while moving through the supply chain. Here’s how Blockchain brings advantages for every stakeholder in the food and pharma cold supply chain. Let’s discuss each one of them individually:

For the food cold chain, Blockchain brings the following benefits:

Improved Traceability and Visibility:

Since, tokenization of assets using Blockchain enables traceability of products in the supply chain, it can be used to immediately identify the point where food has been tampered with so that contaminated food is removed before it reaches to the store shelves. This alleviates the need for expensive batch recalls while curbing the instances of illnesses and deaths caused as a result of contaminated food.

Preventing Fraudulence:

The complex food supply chain with multiple actors is vulnerable to errors that are usually motivated by fraudulent intentions. Being a decentralized platform, Blockchain can bring an end to these activities by tracking and recording any action done in bad faith by individual participants. Since, data or transaction once uploaded on Blockchain is immutable, immediate and necessary action can be undertaken.

Also Read: Addressing the Pain Points of Food Industry by Implementing Blockchain in the Food Supply Chain

Increased Brand Loyalty and Customer Safety:

Since, Blockchain offers supply chain transparency, consumers can be assured of the safety of food they are consuming. This happens because Blockchain has the potential to offer customers with information regarding the journey of product (food) right from farm till fork. For instance, customers can retrieve full history of a food item by scanning the smartcode printed on a food package.

Quicker Payment:

Since, Blockchain does away with the need for intermediaries, cost savings increases. Furthermore, due to automated functionality offered by smart contracts over Blockchain, ready availability of validated data is possible, which in turn ensures quicker and proper payments to stakeholders involved in the food supply chain.

The pharmaceutical cold chain, Blockchain brings the following benefits:

Blockchain Cold Supply Chain - Pharma

Improved Traceability of Drugs:

Since, the pharmaceutical industry is a highly regulated industry, Blockchain helps achieve compliance by offering serialization authentication along with tracking capabilities. Besides preventing counterfeiting and tampering of drugs, Blockchain ensures continual flow of vital drugs to ensure that patients receive proper and timely treatment.

Improved Inventory Management:

Blockchain provides an efficient way of filling up the gaps created by legacy systems that were used for inventory management. By anticipating stock shortages, improving data integrity and distribution, this technology can help businesses manage and control their inventory efficiently.

Supply chain Integrity:

The smart contract functionality of Blockchain could be leveraged for streamlining supply chain processes thereby ensuring supply chain integrity. Since, Smart contracts defines terms and condition of an agreement, it can help mitigate fraud while lower costs by eliminating intermediaries involved in payment and other transactions.

Read More: How is BlockChain Contributing to the Efficient Management of Pharma Supply Chain?

The Way Ahead:

Blockchain is poised to transform the cold supply chain ecosystem. When applied to the cold chain, blockchain can securely document the storage temperatures of a product throughout its journey in a supply chain. This helps stakeholders anticipate and identify potential sources of contamination thereby helping them avoid costly recalls while ensuring customer safety.

How Can Blockchain Streamline the Fragmented Agricultural Ecosystem?

The agricultural sector of the country is the primary means of income for over 58% of the rural families. Yet it is plagued by several problems and challenges. However, the grim situation of the Indian Agricultural industry has finally managed to gather the focus and attention it rightly deserves with the Central Government encouraging the adoption and implementation of disruptive technologies such as AI, IoT and Blockchain to resolve issues plaguing the Agri industry. In fact, PM Narendra Modi in his inaugural speech during the 22nd Edition of the World Congress on Information Technology strongly advocated and encouraged the adoption of these technologies across different industries with a special mention about the agriculture and horticulture sectors.

Today, with rising awareness amongst the customers, as well as the farmers regarding food safety, better equity etc. the need to have a robust system that can resolve some of the major agri-related problems does makes sense. Blockchain – A distributed ledger technology, provides the necessary technology infrastructure for automating and digitizing the incredibly complex agriculture ecosystem.

Listed below are some of the interesting and practical use cases of Blockchain in the Agriculture Industry.

blockchain in agriculture

Food Safety:

Consumer consciousness regarding the safety of the food they are consuming is increasing day by day. This is because food-related diseases and illnesses have become more common today than they were a couple of decades back. This requires bringing transparency to the agriculture supply chain that will help identify and weed out poor processes, as well as poor players. An IoT powered Blockchain based system provides growers with real-time data that can help them monitor soil quality, irrigation, pests for crops under cultivation and monitor storage conditions, freshness, in-transit conditions for harvested crops in a precise way while enabling them to take appropriate measures. These records that are uploaded on a Blockchain are immutable thereby ensuring better accountability and traceability.

Food Supply Chain:

The food supply chain is incredibly complex and inefficient due to information asymmetry. This directly impacts farmers who fail to receive their due share. By taking the food supply chain over Blockchain, the incredibly complex food supply ecosystem can be simplified. Since, Blockchain allows easy, as well as equal data access to all the participant of chain including farmers, distributors, retailers, regulators and customers, data management becomes more transparent and simplified. With a more democratic supply chain, issues related to fair and transparent pricing will be resolved with stakeholders receiving their due share of remuneration.

Read More: Addressing the Pain Points of Food Industry by Implementing Blockchain in the Food Supply Chain

Authenticity of Agri Inputs:

While farmers are unaware of the authenticity of the agri inputs (seeds and fertilizers) they are buying, retailers tend to make great profit margins. While farmers are at a certain loss, big agri-input players also suffer huge financial losses due to counterfeit products, which also impairs their brand image. With a Blockchain solution in place, each product right from agri input manufacturer to the purchaser can be traced thereby helping farmers and other stakeholders to know about the origin of the product thereby ensuring its authenticity.

Land Registration:

Land registering or recording is a tedious process with fraud and disputes over land holdings being rampant. Blockchain can help deal with abysmal state of land records by providing a platform where data can be collected, stored and secured in a transparent and easy to access manner. Being a decentralized platform, the data recorded is easily accessible to all the participants thereby ensuring complete transparency within the system. This will result in huge cost savings for the record keeping firms as maintaining records is an expensive and labor-intensive process. Furthermore, smart contract functionality of Blockchain can allow farmers and corporate firms in easy contracting of land leasing. Also, it will also make public distribution of social schemes for farmers accessible and transparent.

Read More: Smart Contracts to Speed-Up Land Registration Process

Insurance:

One of the major issues that farmers have to deal with is unpredictable weather conditions. While they have no control over calamitous weather conditions, they can protect themselves from commodities risk by the means of crop insurance. However, inefficient claims processing system built on legacy technologies makes processing of claims a slow process and fails to offer any respite to the farmers especially when they need it the most. With a Blockchain solution in place, the entire crop insurance sector can be streamlined. The smart contract functionality solution uses weather observation data gathered from IoT sensors to trigger terms and conditions so that capital for claims could be settled. While farmers receive the necessary compensation required to meet the crisis, the insurers too become free of processing huge number of claims, as the entire process is automated by the smart contract functionality.

Fair Disbursement of Subsidies:

Yet another issue that plagues the agriculture industry is the unfair distribution of government allocated funds and subsidies to the farmers. In fact, how much of the allocated funds actually reach the growers remains a matter of concern. However, with a Blockchain solution in place, the distribution of subsidies become more transparent and targeted. While the entire process of bringing together multiple stakeholder isn’t easy yet with a technology solution like Blockchain, achieving information decentralizing and handing it over to the participants of the network becomes possible.

The Future:

With the growing demand for food security, better equity for farmers, land digitization and more, there arises the need for a system that can bring in the required transparency. Blockchain – A distributed ledger technology besides bringing the transparency and traceability, also offers a technology infrastructure that can do away with the inefficiencies of the current legacy system. We can thus infer that Blockchain technologies offers a fertile opportunity for the agriculture industry to grow and prosper.

How Does Blockchain Address the Pain Points of Islamic Banking?

Raghuram Rajan – one of the most prominent economist and 23rd Governor of RBI (Reserve Bank of India) suggested in his 2008 report on the Financial Sector that interest-free banking (Islamic banking) should be practiced on a large scale. This was recommended with an intention to provide access to people from economically backward society with little to no access to banking services.

While Islamic Banking is prevalent in Islamic countries, several non-Muslim countries such as United Kingdom, China, Germany and United States are also offering Islamic windows in their conventional banks. So, what is it that provides it a widespread appeal? Is it because the system is based on high ethical principles or because it encourages the Muslim community – hesitant of investing in conventional banks, to come forward and invest in Shariat compliant projects thereby mobilizing huge amount of capital? Whatever may be the reason, the fact that Islamic banking is gaining traction both within and outside the Muslim community, cannot be denied.

However, these principles aren’t easy to abide by in practice as doing so may lead to higher transactional costs than most non-Islamic firms are accustomed to. This is because Islamic Banks lay a lot of importance on contractual relationship, which typically involves several contracts (more than three), parties, with lot of stress on preventing speculation, ambiguity and interests. In other words, Islamic contracts are anytime more complex than that of a conventional bank as it caters to entire system of transactions. Consequently, the number of legal and administrative processes increases, which further raises the cost of doing business.

Furthermore, Islamic Banking requires abidance with the stringent standards for financial transaction that complies with the Sharia Law. For instance, banks can create debt only when it is backed by underlying assets such as gold.

Role of Blockchain in the Islamic Finance Industry

Integrating Blockchain technology across the Islamic finance industry has opened doors of opportunities for banking and finance organizations. In fact, incorporating blockchain in Islamic Banking will revolutionize the way payments, remittances and other transactions are conducted. The smart contract functionality of the Blockchain technology automates the entire contractual process including the enforcement of terms and conditions of the contract for Islamic Banking and Financial institutions. These self-executing programs electronically encode the terms of the contract and execute only when the conditions are met. As a result, all the associated legal and administrative intricacies, as well as redundancies involved in Islamic banking or financial products can be alleviated.

Also Read: How Can Blockchain Put An End To Fraud In Financial Transaction?

What makes the inclusion of this technology more appealing is that the contracts that are once uploaded on the Blockchain become immutable, secure and easily verifiable. Consequently, operational risks ascending from counterparty risks get mitigated obviously. In short, smart contracts automates and streamlines the processes and operations of banking and financial institutions complying to the Shariat Law. This will help them realize reduced transactional and contractual costs within a short processing time while eliminating the risks of duplication and fraudulence.

Moreover, since Bitcoin or any other cryptocurrency doesn’t involve ‘Riba’ i.e. lending or debt as in traditional banking, they could be categorized under the asset class that are created through mining and are thus compatible with Sharia-based regulations. This has earned this technology the much-required legitimacy, which others had refused to provide.

Final Words:

The Islamic finance industry is guided by the principles of trust, equality, and fairness. Blockchain has become a perfect medium to integrate and operationalize these values by exponentially streamlining the operations, as well as business processes of the Islamic banking system. Furthermore, Blockchain significantly increases the chances of improving the transactional activities due to its’ inherent ability to provide trust and transparency along with security and protection in various transactional activities. With apparent similarities between the characteristics of Blockchain and ethics of Islamic finance, its’ usage and incorporation would certainly open doors of opportunities for Banks and financial institutions following the principles of Shariah.