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As of December 2019, experts forecast blockchain spending would surpass USD 16 billion by 2023, according to an IBM Institute for Business Value (IBV) report. However, over the course of the year, COVID-19 disrupted the global economy, slashed technology budgets and refocused corporate efforts to stay afloat.
Despite these challenges, the pandemic has also accelerated the need for greater supply chain resilience, digital health credentialing and distributed ecosystems that can help organizations in the public and private sector maintain the flow of critical goods and coordinate response. These critical areas of focus emerged in 2020 but will continue to influence blockchain development and adoption in the years to come.
As we leverage technology for good, below are five predictions for how blockchain can help our return to normal in 2021:
1. Return to work accelerates use of digital health credentials
COVID-19 has also accelerated the need for digital health credentials that can allow individuals to offer proof of health status to employers or as a prerequisite for travel or recreational activities. While these initiatives were already underway as a means to give individuals greater control over the management of their personal and health data, COVID-19 created a greater incentive for testing providers, government actors and technology providers to work together to build the underlying digital infrastructure needed to support these credentials at scale.
For these reasons, digital health credentialing platforms like IBM Digital Health Pass will see adoption, allowing organizations that need to verify an individual’s health status to do so while also protecting their personal privacy.
2. AI and automation unlock further value
AI and automation can help unlock further value when integrated with the trusted data that blockchain provides. For example, IBM Food Trust’s Freshness module can recommend products to recall from store shelves because of expiration. IBM Sterling Supply Chain Suite uses advanced analytics and AI to help organizations maintain inventory visibility during demand spikes, for example by automating re-ordering when certain demand thresholds are met or by selecting the most sustainable or cost-effective shipping method. At the same time, blockchain’s digital record offers greater insight into the framework behind the AI, reducing the distrust and mystery many ascribe to the technology.
We’ve paired the two technologies in order to increase the effectiveness of many IBM solutions, including IBM Food Trust, Blockchain Transparent Supply and TradeLens. The result? Complementary, continuously learning solutions with increased data, analysis, transparency and security.
3. Blockchain accessibility is felt in the grocery store
A lower barrier of entry for blockchain will accelerate its adoption across the food supply chain, resulting in more blockchain-traced products becoming visible in grocery stores and the point of sale.
Over the last year, the costs and timeline for achieving a positive return on investment from blockchain have continued to fall as blockchain became integrated with other solutions and enterprises benefitted from more choice and specificity in the networks available to them. Greater network flexibility via hybrid cloud and the ability to scale to meet demand have made it possible for organizations to rapidly see value. According to the recent IBV study, 41 percent of organizations had reported a positive return on investment (ROI) on their blockchain initiatives by December 2019.
In addition to ecosystems like IBM Food Trust, the largest non-crypto network in the world tracing thousands of food products, hosted on the IBM Cloud, and IBM Blockchain Transparent Supply, which allows organizations to build networks of their own, food producers can now also opt for industry-specific blockchains for products including wine, seafood and coffee. Shortages of consumer staples during the COVID-19 pandemic has further underscored the need for greater supply chain visibility and resilience, and adoption through solutions like IBM Sterling Supply Chain Suite will lead to even more blockchain-traced goods at retailers and grocery stores.
4. Vaccine supply chains look to crypto anchors
As the immensely challenging process of global vaccine distribution gets underway, blockchain technology can help provide an accurate view of inventory and optimize vaccine allocation. Beyond bringing greater trust and efficiency to the supply and distribution of vaccines, it can also play a critical role in maintaining cold chains and helping to mitigate fraud.
Between 10 and 30 percent of medicines in developing countries are counterfeit, according to the Centers for Disease Control and Prevention. To mitigate the problem, vaccine distributors will possibly look to technologies like crypto anchors, which tie a unique digital identifier to a physical object with a property of the object that is hard to clone, forge and transfer to another object. Markers like branding on pills, fabric patterns and even optical signals can establish authenticity of products and help keep the vaccine supply chain safe.
5. Tokenization accelerates inventory digitization
Tokenization, or the representation of physical assets digitally, will help provide additional levels of security and efficiency, and as it becomes more common, the next supply chain evolution will be fully digitized inventories. Digitized inventories can increase supply chains’ provenance by logging an organizations’ working capital and giving them more control and understanding of their liquid assets, so they can make more informed decisions.
Digital assets can also dramatically reduce the number of intermediaries and paperwork that economic participation usually requires while also addressing the liquidity problem affecting many assets, from real estate to fine art and precious or industrial metals, that are not easily convertible into cash. As organizations move to increase efficiency and reduce costs, 2021 will see more efforts to integrate the use of tokens.
2020 has been a difficult year. But the innovation across our industry has not slowed. To the contrary, the challenges of 2020 have provided a clearer focus for the best ways for blockchain to begin delivering value now, at a time when trust and consistency are urgently needed. From vaccine distribution to the supply chains for food and other critical goods, to health credentialing that allows us to re-enter shared spaces and resume in-person work, blockchain’s impact will continue to grow in the year to come.