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The Blockchain Revolution In Logistics Explained

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Logistics is yet another area where blockchain technology is proving invaluable.

Technological innovation is crucial as logistics encompasses detailed coordination of complex operations involving many people, facilities, and supplies.

Like the Internet has changed how we communicate and do business, blockchain technology is similarly disruptive.

This article reviews how Blockchain is changing logistics.

Blockchain Technology – A Brief Overview

In layman’s terms, blockchain technology involves accessing a distributed and decentralized database to record unmodified information. It is an essential technology with several application possibilities.

The first known application was in the financial market with the emergence of Bitcoin. However, other segments have stood out. Blockchain novelties, among other features, are already available in logistics and the insurance market.

How does Blockchain want to use blockchain technology? It is crucial to understand how it works.

The blockchain engine allows data validation with distributed network processing on different computers (nodes). That is, any transaction of an online asset is made only between two or more agents without the intervention of intermediaries. Furthermore, information is only exchanged and validated after the two parties’ consensus (peer-to-peer system).

Each agent interested in carrying it out in a transaction has an encrypted code. The information block is assembled only when two or more codes come together and the transfer occurs.

How is information validated on the Blockchain?

ABlockchainon begins when two agents decide to start exchanging data and/or cryptocurrency. Then, it’s time for block creation, when the transfer is bundled and enters the shared computer chain network.

During the verification process, a set of rules is defined for nodes (validators) to evaluate the transaction. Verification only takes place after a consensus among those involved. Then, the process proceeds to encryption, in which the verified block is encrypted and written. Ultimately, the transaction is executed, and the transfer is carried out between the parties involved (P2P transaction).

Blockchain Benefits in Logistics

Blockchain aims to optimize the processes of any online activity. It is also safer, as the complex transaction codes prevent information fraud.

Plus, blockchain technology is essential in logistics as it provides the following:

  • transparency of transactions
  • credibility of operations
  • agility and ease of coordination between companies and suppliers
  • the efficiency of recording data in chronological order
  • optimization of processes and the supply chain
  • cost reduction

In logistics, there is a lot of negotiation and supply chain between several companies, which is why this database model can help improve processes within the sector. Knowing this, it’s easy to see why the cryptocurrency prices of blockchain projects in the logistics industry could have their own summer.

Blockchain Technology in Logistics – Example

Imagine a company located in Miami-Dade County, Florida. Let’s say this company needs to deliver a product to a customer in Richmond, Virginia.

The delivery tracking scenario changes by applying the Blockchain wiBlockchainogistics sector.

In this context, all companies access the same network and can verify the information directly from the source.

In addition, any decision regarding cargo transportation (e.g., route, shipping costs, etc.) is taken based on a consensus.

The Internet of Things (IoT)—a technology in which physical objects use intelligent sensors and can communicate with carriers’ systems over the Internet—would automatically validate all data exchanges.

It is indisputable that blockchain technology is one of the leading logistics trends and significantly impacts the future of companies in the sector.

Staying current and open to adopting new technologies is essential for companies that want to ensure their long-term competitiveness in the market.

Final Thoughts

Blockchain technology has given more agility and transparency to specific logistics and supply chain operations, especially in cargo tracking services, vehicle management, and supplier control.

Additionally, blockchain technology offers high security for recorded data, as it cannot be changed by others with access.

Lastly, it offers greater agility by shortening processes. Instead of everyone involved having to talk to each other, they connect to the network and have access to the data they need in a more agile and transparent way. Blockchains will become prevalent everywhere in business, from marketing and accounts to sales transactions.