The past few years have been big for blockchain.
But many people still don’t understand what blockchain is or how it works. Some companies are even hopping on the “blockchain bandwagon” without considering whether it’s actually useful in their industry. And according to Ethereum co-founder Vitalik Buterin, misapplying the technology in this way is a waste of a company’s time and money.
That’s why it’s important to dispel the myths surrounding blockchain and cut through the buzzwords.
In the shipping and logistics industry, enterprises are already beginning to realize that private blockchains are simply not the solution they’ve been sold. To truly achieve the trust, security, and uniformity that blockchain promises, we have to adopt public chains.
Public blockchains (Bitcoin, Ethereum) are distributed and decentralized, and they’re open to anyone. They do not require central authorities or centralized trust, as private blockchains still require. Public chains provide much more security than private blockchains because each member of the network executes a consensus protocol, syncing and verifying additions to maintain the shared ledger.
They’re the game changer that will improve the entire supply chain industry moving forward.
Here are three reasons why public chains are better for the industry than private ones:
1. Public blockchains are more secure.
There’s a misconception that public means anyone can access your data, while private indicates an extra level of security. But this is false.
With only one central source of truth, private blockchains are just as vulnerable to attacks as regular servers or databases are.
Public blockchains, however, can be thought about like cloud technology. But on steroids—they’re even more distributed and decentralized.
No one can access your information unless you permit them to. And because public blockchains are backed up by the whole Ethereum network, they are more advanced and more secure than the smaller private blockchains. The Ethereum network helps you validate your transactions and shipments, and the entire community verifies every node.
It would take someone with billions of dollars to threaten the network with denial-of-service attacks—this just wouldn’t happen.
2. Public blockchains can provide uniformity across the entire industry.
Private blockchains further entrench the fractures plaguing the shipping and logistics industry today.
Private blockchains don’t necessarily have the ability to interact or communicate with other blockchains. This defeats the founding mission of blockchain technology and leads to less efficiency and transparency.
A good example of the limitations of private blockchains is seen in Electronic Data Interchange (EDI), a system for communicating documents like shipments, purchase orders, and returns between partners. EDI is prevalent in the industry today.
Believe it or not, the technology underpinning EDI has been around since 1947 when it was used for the Berlin Airlift.
Seven decades later, and most shipping companies still use their own proprietary versions of EDI, which often requires expensive software to run and cannot interface with other business’ EDIs—an inefficiency private blockchains simply cannot solve.
But public blockchains can unify systems across companies, countries, and even industries (such as the supply chain to shipping, for example).
Think of a public blockchain as a one-stop-shop for everything a company needs to participate in the industry. It’s an underlying, unified platform layer that can integrate with businesses’ existing Enterprise Resource Planning systems (ERPs).
This will make it easier for all the actors in the supply chain process to communicate with one another and deliver items in a timely, cost-effective manner.
3. The industry is asking for public blockchains.
Outsiders have a tendency to couple price with activity, and because we’re in a bear market, some people think interest in blockchain has decreased along with the price of cryptocurrencies.
But that’s not the case.
People in the shipping and logistics industry have been oversold on the benefits of private blockchains, and are now starting to express an interest in public chains. All over the world, blockchain remains the hot topic of discussion—and everyone’s still talking about how to implement public chains.
Because there’s been some concern about how fast the technology is scaling, our company is building a decentralized side chain that will operate on its own and run parallel to Ethereum. Validator nodes will be elected by the community to make sure everything is maintained appropriately. And since no single company controls it, people can place their trust in the system, in the network, itself.
How you can take advantage of the public blockchain
Over here at ShipChain, we are very optimistic about public blockchain and how the logistics industry will adopt it. We are not a blockchain business, per se, but as a shipping tech company aimed at unifying the whole industry to make it better.
If you want to learn more about what we do and whether or not we might be a good fit for your business operations, request a demo from our team.