Blockchain offers advantages to supply chains in terms of improving transparency and traceability. However, blockchain’s perceived inability to scale effectively is often held up as the reason delaying the sector’s adoption of the technology.
However, Angel Versetti argues that a scalable blockchain-based supply chain is a possibility, and can lay out the steps necessary to achieve it.
To discover more, Digital Journal spoke with Angel Versetti, CEO of Ambrosus, a decentralized IoT network for next-generation supply-chains. Angel is a recognized blockchain authority and frequent speaker on innovation, technology, and economic development.
Digital Journal: Blockchain has been hampered by an inability to scale, why is this?
Angel Versetti: All new technologies need time to grow. If one remembers the early days of the internet there were many questions (and doubts) about what could be sent over email, and if pictures would ever be possible. Then as the internet evolved, scaling solutions appeared to allow for HD video streaming, real-time music editing, and much more. The same holds true for the growth and evolution of blockchain. It is a young technology – barely 10 years old – that needs time to grow.
Most of the time, problems related to scaling have to do with excessive amounts of network traffic, where the operators and architects of the network have failed to plan for such large amounts of usage, and as such the network slows down and becomes congested.
DJ: Can the scalability issue be overcome?
Versetti: Yes, and there are a variety of different solutions that many projects are already implementing. For Bitcoin, the core developers have been looking into leveraging what has been called the ‘Lightning Network’. This is basically a second payment processing layer fits on top of the Bitcoin blockchain so that smaller or less relevant payments do not need to be immediately stored on the blockchain (although eventually they are included). For Ethereum there is still debate around how exactly they plan to scale the network.
DJ: How effective are the different solutions?
Versetti: Various solutions that have been proposed (Casper, Plasma, and Sharding) involve similar off-chain or side-chain dynamics to leave the original Ethereum blockchain less congested. Finally Ambrosus utilizes a unique ‘bundling solution’ whereby data is first compacted into larger ‘bundles’ before being verified through a Proof of Authority (PoA) consensus algorithm. This will allow Ambrosus to transact tens of thousands of sensor readings per second on its blockchain. Altogether, most of the current scaling solutions can overcome blockchain congestion by compacting data more efficiently and being more selective about how often data is verified by the blockchain itself.
DJ: What technological changes are making blockchain a better option for supply chain?
Versetti:Using blockchain in the supply chain needs to be understood in the context of other evolving technologies known under the general title of ‘Industry 4.0′. These technologies include Internet of Things (IoT), Artificial Intelligence (AI), Machine Learning, drone delivery, and 3D and roll-to-roll (R2R) processing. Ambrosus is making use of most of these technologies to build what will become fully ‘automatized’ supply chains of the future.
With blockchain, it’s possible to store data and value in a secure and transparent manner while also automatically executing payments and sending alerts through the use of smart contracts. Including Industry 4.0 technologies in the supply chain process makes things much more interesting. Not only does the data or value put onto the blockchain then gain a new level of security (through secure IoT devices), but even the scope of products that can be traced or monitored throughout a supply chain also increases according to 3D and R2R printing techniques.
DJ: What can artificial intelligence offer?
Versetti:Artificial Intelligence and machine learning allow smart devices deployed in the supply chain to better prevent counterfeiting, quickly communicate with one another, and transmit precise pieces of information to the relevant stakeholders involved. Ultimately, with blockchain a section of the supply chain to be improved, while implementing blockchain with the innovative technologies of Industry 4.0 allows for the entire supply chain to be automatized and operated on heretofore unprecedented levels of efficiency and transparency.
In a follow-up interview, Angel Versetti focuses how blockchains are disrupting businesses in general, providing benefits for companies and consumers. See: “Q&A: How blockchain is set to disrupt business.”
