How IBM Is Using Blockchain to Change the World
The general manager of IBM Blockchain explains the gist of the new technology — and why it’s such a big deal.
One in 10 people worldwide will contract a foodborne illness this year. It’s a fact that doesn’t sit well with the U.S. Centers for Disease Control and Prevention (CDC) and its counterparts in other countries — or with Marie Wieck and her team at IBM. Wieck oversees the global strategy for much of IBM’s work around the emerging technology that she describes, in its simplest form, as a shared database. Among the uses for this database: food provenance (aka traceability and origin) to ensure the safest possible food supply.
“This is going to have the same kind transformative effect on business processes and transactions that the internet had on communication.”
Working with suppliers and retailers, IBM has developed a blockchain platform that has the potential to hold information from every party involved in getting a food item to consumers — from the farmer to the packaging plant, distributor and store. “When you have an issue with contaminated items and you’re trying to protect people’s health, blockchain helps you find and eliminate those items quickly,” Wieck says. The technology has already been put to the test tracing shipments of organic mangoes from Mexico for a large U.S. retail chain — and it’s reduced the average time needed to trace food to its exact origin from just over six days to mere seconds.
Blockchain is the latest big breakthrough for the 107-year-old company that made a name for itself in calculators, mainframe computers, printers and PCs before debuting IBM Watson, a computer system that uses machine learning to answer questions, in 2011. “Any technology company that is going to survive for 100 years, given the rate and pace of technological evolution, pretty much has to reinvent itself continually,” Wieck says.
That’s what led to IBM’s exploration of blockchain as part of a longstanding exercise at the company that looks at emerging technologies 5–10 years out. “We saw it as a really great way of sharing information across enterprises and to build a level of transparency and trust that you can’t get from normal mechanisms today,” Wieck says.
Not Your Average Database
Several factors differentiate blockchain from other databases. One is that the exact same version of the database — right down to every data point — is shared across the entire network of involved parties. That means there’s no single source of failure for the data that could potentially be vulnerable to a cyberattack or another kind of system breakdown, Wieck says. (To address privacy and security concerns, blockchain data is encrypted.) Perhaps the key difference, however, is that a blockchain is “immutable.” That means that unlike most databases, which are updated to create the latest version, blockchain keeps a record of all updates. “One of my colleagues likes to talk about it as if you’re writing the crossword puzzle in pen,” Wieck says. “If you write ‘MOON’ and then realize it should be ‘STAR’ instead, you would see that you crossed out ‘MOON’ and wrote ‘STAR’ — you wouldn’t just replace it.” That attribute — the complete history of the data — ensures accuracy. And in the case of mangoes from Mexico, it quickly connects the dots for everyone involved in the process.
“Considering 90 percent of physical goods we consume worldwide spent some time on an ocean in the course of their life, this can actually have a material impact even on GDP.”
While blockchain is being put to use for functions across dozens of industries — think drug trials, financial transactions, educational records — research by global research firm Gartner shows that manufacturing and supply-chain-related industries represent the biggest opportunity for the technology. That explains IBM’s work to create blockchain solutions for Danish shipper Maersk, the largest ocean container shipper in the world. Upwards of 200 communications — from the producer to the shipper to the port authorities, most on paper — are associated with each container, IBM learned. Digitizing those communications on blockchain will streamline the process, provide real-time transparency for location and other conditions, and, ultimately, reduce the cost of shipping a container. “Considering 90 percent of physical goods we consume worldwide spent some time on an ocean in the course of their life, this can actually have a material impact even on GDP,” Wieck says.
There’s no question the impact of the technology is far-reaching. “This is going to have the same kind of transformative effect on business processes and transactions that the internet had on communication,” Wieck says. And IBM is keen on making blockchain technology accessible to all, including programmers and developers. “We even have a free academic initiative to provide access to over 1,000 universities for our blockchain platform so they can teach the skills needed for these new types of networks and new types of solutions,” Wieck says.
Ultimately, most people will never need to know they’re using a blockchain, she says. “They’re just going to know that they can look up on their cell phone whether this mango was organic or not. We want it to be that easy.”
Blockchain and FedEx: The Next Generation of Shipping Transparency
Blockchain’s shared network, or database (or chain of events, aka blocks — hence the name), can track almost any kind of business activity, from financial transactions to medical records and patents. One of the most tangible examples is shipping goods, where blockchain is poised to reduce risks and create cost and time efficiencies. “At FedEx, we’ve long positioned ourselves as a trusted ally in the custodial control of goods that move through our networks,” says Robert Carter, executive vice president, FedEx Information Services, and chief information officer. “Blockchain is ideally suited to events that occur when you’re moving something of value, whether it’s pharma or designer goods from Louis Vuitton, where there’s a high need for a trusted custodial chain.”
That’s particularly true in shipments moving across borders. “When it comes to customs, I believe there will be a future where all clearance entries are represented on a blockchain — and that becomes the best way to represent the provenance of something,” Carter says.
As a charter member of the Blockchain in Transport Alliance and Blockchain Research Institute, FedEx recognizes the need for the entire industry to adopt blockchain technologies. “Many things moving through supply chains get touched by more than one carrier,” Carter says. “So the idea that you can create a blockchain for goods moving within the context of transportation is really powerful.”
TELL US YOUR OPINION
- How do you see blockchain helping your business?