What’s a “blockchain”?
In a nutshell, blockchain is a distributed ledger technology. It’s ideal for managing transactions between distributed entities and maintaining a transaction archive. Once a transaction is added to the ledger—or blockchain—it is not erasable and cannot be changed. Blockchains can either be private (e.g. set up amongst a group of collaborating enterprises) or public (e.g. anyone can join) depending upon the application. Blockchain—together with other new disruptive technologies such as AI, analytics, and IoT—are the building blocks of a new technological era.
And what are “smart contracts”?
Blockchain transactions can be executed according to a set of shared and previously agreed business rules known as “smart contracts.” Essentially, the business rules are written into software code and executed automatically. Levels of transactional visibility in the ledger can be agreed in advance, guaranteeing appropriate levels of privacy for pricing or other terms.
How do you think blockchain and smart contracts will impact business moving forward?
We believe blockchain is a new disruptive technology that has the potential to add a tremendous amount of value across industries. Blockchain addresses the issue of trust between parties, particularly when the parties aren’t known to each other. Another great thing about blockchain is that it doesn’t need to be controlled centrally. This decentralization can increase efficiency.
In the telecom industry, we believe that if all participants in the wireless supply chain participate in this type of a distributed ledger, with each getting the necessary visibility to transact their business—and with those transactions governed by pre-negotiated business rules—we’ll be presented with some compelling use cases. For example, carriers will be able to facilitate that ecosystem by owning and managing their own blockchains, incorporating device history, component provenance, device ownership, and repair records, all available in near-real time. This database could be used to provide greater transparency to vendors, distributors, retail partners, dealers, repair service providers, and more.
Do you think the world will benefit from blockchain and smart contracts?
Absolutely. Blockchain brings trust, visibility, and security to business relationships involving multiple parties. Already, there have been many pilots and initial implementations of blockchain in various industries, most notably in financial services, manufacturing, the food industry (for traceability & verification), healthcare, and carbon emission trading to name but a few.
One of the advantages that blockchain brings to industry is when it’s combined with IoT, such as in the case of complex manufacturing. IoT devices from across the supply chain can each create data points, which can be entered into the blockchain. The blockchain becomes a single source of truth for all supply chain activity. Thus, a manufacturer with thousands of different suppliers can more effectively manage their supply chain.
The following references demonstrate how the world is moving toward greater implementation of blockchains and smart contracts:
- The projected size of the global blockchain technology market varies depending upon the source: from $8 billion USD (SOURCE) to $20 billion USD (SOURCE) and even higher. What all agree upon is that this is a very high growth market.
- A recent report from Deloitte suggests that blockchain is getting closer to its “breakout moment every day,” with momentum shifting “from a focus on learning … to building practical business applications.” Deloitte also suggests various potential use cases within the telecom industry, including billing systems simplification and decreasing roaming fraud.
- What’s more, research house Diar states that in the first three quarters of 2018, blockchain and crypto companies raised nearly $3.9 billion USD through VC funding.
Are wireless service companies adopting blockchain and smart contract technologies?
In the next few years, it’s likely there will be multiple blockchains within the mobile industry. Carriers may each have their own private blockchains to coordinate all the players in their own ecosystems. As we’ve seen, there are also compelling reasons for blockchain technology to be deployed as an IoT backbone to capture, verify, and store data from IoT endpoints. Other industry players may also build out their own blockchains too.
Today, Brightstar has an ongoing workstream to monitor blockchain technology development, and it’s ready to play an active role for its clients and suppliers.
Are there any initial challenges in working with blockchain and smart contracts?
As with all new technologies, we need to find the compelling use case that can move the needle to provide exponential value over our current technology strategies. We need to ensure that any investment is for the long term and it presents a concrete ROI, and that within our ecosystems our clients are equally engaged as participants. Coordinating all of these different stakeholders and moving parts is a tremendous challenge.
We certainly covered a lot here, but there’s still quite a bit to discuss with regard to blockchain and smart contracts. To learn more, be sure to visit Brightstar at 2019 Mobile World Congress in Barcelona. Come by our exclusive Brightstar Pavilion (Hall 2, Booth 2120) between February 25 and 28.