Asset Chains: The Foundation for Machine Trust and Seamless Information
Article by Bettina Warburg
Data silos and communication gaps between the many processes, procedures, and participants in today’s supply chains cause delivery inefficiencies. In a crowded and competitive environment, companies cannot afford to have slow or inflexible logistics networks.
For supply chains to keep up with demand-side expectations, they must be cognitive in nature and provided the autonomy to freely interact with one another. A process that requires a significant amount of machine trust that has eluded industry thus far.
Half Measures Are Insufficient
The traditional reliance on human intervention in logistics must be replaced with robust machine trust for supply chains to fully leverage the powers afforded to them by blockchain, AI, IoT, and other emergent technologies.
Blockchain, for instance, has advanced significantly from its crypto roots, now widely viewed as an extraordinarily efficient and effective method of creating and transferring identity, ownership, and custodianship across a network for virtually any asset. However, supply chains have yet to widely embrace these capabilities and integrate blockchain as a mechanism for verifiable transfer of physical goods, document flows, or even financial flows. Instead, blockchain has flourished in isolated applications that serve specific needs well but have no demonstrable impact on global state management within supply chains.
Asset Chains Explained
Asset chains are blockchains that drive cognitive supply chains and provide a framework for their autonomous and decentralized management. Asset chains allow the marketplace to find natural points of equilibrium that otherwise could never be reached and, therefore, eliminate excessive deadweight loss. Additionally, asset chains allow supply chains to curate and control the delicate balance between supply and demand, even in an environment filled with countless internal and external variables.
Given the immense amounts of capital flowing through supply chain networks all around the world, effective cognitive supply chains can unleash unimaginable value for marketplace participants. Asset chains serve this goal by facilitating the transition from human trust to automated trust, and from disjointed, piecemeal supply chains to wholly integrated systems.
To establish and maintain equilibrium in supply chains and, therefore, the marketplace itself, asset chains are reliant upon several features of blockchain technology to achieve state maintenance. The process begins with smart contracts which can be written as code and executed when specific terms are triggered. Afterward, blockchain allows asset chains to verify the identities of the involved parties, matched and permissioned according to both physical and digital identity. Lastly, asset chains establish a censorship-resistant truth between non-trusting parties, allowing the transition of custodianship and contracts across the entities.
Reshaping the Modern Supply Chain
Examining the potential of asset chains beyond the traditional definition of logistics, the same process can be used to bind governance and compliance throughout a variety of different industries. For instance, if a product is subject to varying regulatory restrictions across different jurisdictions – the pharmaceutical industry being a fitting example – those variables can be integrated as rules into the smart contract, allowing asset chains to properly throttle product transactions to ensure continuous compliance. Likewise, asset chains can be combined with IoT technology to continually monitor “best by” dates on food and route distribution as efficiently as possible to minimize waste.
In essence, asset chains are a process that regulates, guarantees, and conducts transactions of nearly any variety based on three distinct features of blockchain technology. They serve as the unwavering backbone of the cognitive supply chains needed to drive commerce in an immediate marketplace with overwhelming demands for consistency and reliability. Without asset chains, cognitive networks will simply lack the machine trust and seamless information necessary to make them plausible or even functional. Asset chains will serve as the technological backbone to an economy freed from traditional, human-based limitations and allowed to evolve to one of absolute efficiency and speed. To learn more, download the Animal Ventures Asset Chains report.