Database(s) | Blockchain = Future

One major difference between a typical database and a blockchain is how the data is structured.

A blockchain collects information together in groups, known as blocks, that hold pieces of information. Blocks have limited storage capacities and, when filled, are closed and linked to the previously filled block, this way forming a chain of data known as the blockchain. All new information that follows that freshly added block is compiled into a newly formed block that will then also be added to the chain once filled, and so on.

A database usually structures its data into tables, whereas a blockchain, as its name implies, structures its data into pieces (blocks) that are stitched together. This data structure inherently makes an irreversible timeline of data when implemented in a decentralized nature. When a block is filled, it is “sealed” and becomes a part of this timeline. Each block in the chain is given an exact time stamp when it is added to the chain.

  • A blockchain is a type of shared database that differs from a typical database in the way that it stores information; blockchains store data in blocks that are then linked together via cryptography.
  • Decentralized blockchains are immutable, which means that the data entered is irreversible.
  • As new data comes in, it is entered into a fresh block. Once the block is filled with data, it is chained onto the previous block, which makes the data chained together in chronological order.
  • Different types of information can be stored on a blockchain, but the most common use thus far has been as a ledger for transactions.

The goal of blockchain is to allow digital information to be recorded and distributed but never edited. In this way, a blockchain is a foundation for immutable ledgers, or records of transactions that cannot be changed, deleted, or destroyed. This is the reason why blockchains are also known as distributed ledger technology (DLT).

First developed as part of a research project in 1991, the blockchain concept predated its first widespread application in use: Bitcoin, in 2009. In the years since, the use of blockchains has exploded via the creation of multiple cryptocurrencies, decentralised finance (DeFi) applications, non-fungible tokens (NFTs), and smart contracts.

Blockchains can hold a variety of other information like legal contracts, state identifications, or a company’s product inventory.

Let’s have a look now at how blockchain technology achieves decentralized security and trust. To begin with, every new block is always stored linearly and chronologically. That is, new blocks are always added at the “end” of the blockchain. After a block has been created to the end of the blockchain, it is extremely difficult to go back and alter the contents of that said block unless a majority of the network has reached a consensus to do so. That’s because each block contains its own hash (#), along with the hash of the block before it, as well as the previously mentioned time stamp. Hash codes are created by a mathematical function that turns digital information into a sequence of numbers and letters. If that information is edited in any way, then the hash code changes as well.

To validate new entries or records to a block, a majority of the decentralized network’s computing power would need to agree to it. To prevent anyone from validating bad transactions, blockchains are secured by a consensus mechanism such as proof of work (PoW) or proof of stake (PoS). These mechanisms allow for agreement even when no single node is in charge.

Blockchain Technology Benefits for the Heavy Industries

The Aerospace, Defence, Energy, Mining, Renewables, and Heavy Manufacturing sectors are under the constant burden of managing, processing, and storing paper records. The reason is heavy industries have a wide range of regulatory compliance mechanisms.

Heavy regulatory regimes and processes cause the relentless production and duplication of documents across organizational boundaries. The sheer volume of paperwork is often so hefty that many businesses in this sector have set aside warehousing facilities to store years of paper records.  

As an illustration, the Mill Test Certificate or European EN 10204 Standard, proof of compliance and quality assurance framework within the metal industry, issues PDF certificates. Unfortunately, these certificates are not machine-readable.  

In the wrong hands, they are easy to modify or falsify. Yet, the European metal industry processes over 100 million of these certificates each year for material documentation and regulatory compliance.  

Rising need for digital documents in Heavy Industries

Machine-readable certificates are vital in an increasingly interconnected IoT setup. Non-machine-readable and paper-based certificates encourage negligence, fraud and other forms of threats.  

As an illustration, Most Australian fabricated steel does conform to Standards Australia’s compliance requirements. Aussie steel products often have a compliance certificate as proof. But there are legal loopholes that support the importation of fabricated steel, which may be low quality steel. 

As per stakeholder sentiments during the Australian senate standing committee on economics, at least 80% of imported steel does not comply with Australian metal industry standards. Furthermore, while some of these steel products may comply with an external standard, there are inconsistent applications of compliance certification in heavy industries. 

Then, the Australian steel industry is also rife with fraudulent standards certification. To this end, most imported metal test certificates lack even the most basic of data, such as manufacturer identity.  

The Aussie steel industry sector is one of the many heavy industry sectors under the strain of paperwork and certificate counterfeiting. As per the  Steel Alliance Against Counterfeiting (SAAC), at least 53% of steel industry stakeholders have come across forged certificates in their day-to-day operations. 

Forgery of compliance certificates exposes the end-user to safety risks and the manufacturer to the damaging costs of counterfeits, plagiarism and fraud. Consequently, as the heavy industries further embrace sustainable goals on CO2 emissions and higher safety standards, there will be an increase of machine non-readable certificates, prone to fraud and forgery. 

On top of that, the heavy industries have some of the world’s most complex and largest supply chains. Each sector has thousands of supply chain partnerships and lacks a single source of truth for their data.  

It is a highly fragmented sector with a high amount of routing and tracking errors. To this end, short delivery times, cost reduction via optimization of supply chain processes and easy inventory management are but a distant dream for this sector.  

Blockchain technology use cases in the heavy industries 

Blockchain technologies support the development of unique digital identities.

Blockchain technology creates publicly verifiable, append-only and immutable records. Furthermore, these decentralized data records have discrete-time stamps that verify their authenticity in chronological order. To this end, distributed ledger technology can support the traceability of goods through every step of upstream production, creating open, transparent and immutable digital certificates every step of the way.

Consequently, compliance and identity certificates on blockchain ledgers will be shareable, machine-readable, and trustworthy. Moreover, digital identities will do away with the bureaucracy and fogginess that encourages fraud and forgery of compliance and quality certificates. 

To this end, the Australian government has provided Everledger, a Queensland technology company, with $3 million in funding to accelerate critical mineral digital certification on blockchain technology. In addition, convergence. tech, a blockchain technology consulting startup, has also received $2.6 million in support of its automated key reporting research. 

The BHP Group, a leading Aussie mining (and soon ex-petroleum company…), has processed digital documents in real-time on the IBM owned, MineHub blockchain platform. BHP has successfully traded iron with China’s Baosteel and copper with China Minmetals Corp.  

BHP is expanding its cross border digital metal trading in 2022 to save more on logistics, banking and governance procedures. 

Blockchain technology in peer-to-peer energy trading 

Peer to peer energy trading via blockchain technology can support decentralized renewable energy production and market systems. For example, microgrid markets energy trading and management platforms can support the operations of processes such as electric vehicle battery swapping stations.

They will also offer consumers real-time prices on renewable energy and expand the trade of renewable energy between grid-connected parties on a secure, private platform. LO3 Energy, a cloud-based retail energy blockchain infrastructure platform, is now operating its Pando platform in New South Wales.

The Pando platform streamlines peer to peer energy trading and creates local energy marketplaces for its users. LO3 Energy has partnered with Solar Bay, an Aussie renewable energy fund, to manage the New South Wales site’s solar assets and optimization of usage of power.  

Blockchain technology supports peer to peer data sharing 

PwC’s Blockchain in Aerospace report shows that most aircraft maintenance data collection is still manual. A plane condition and historical data have over 40 systems. This system’s data is controlled by many third parties who are often industry competitors. 

Predictably, these parties often show a reluctance in data sharing. Consequently, aircraft maintenance is a reactive, time consuming and expensive process that mercenary resellers take advantage of and under-supply or oversupply components. 

Blockchain technology supports data sharing on peer-to-peer networks. Every node on a consensus-based technology network can provide part installation or production data and its service and replacement history or timeline.  

Blockchain technology can also provide credentials for technicians that perform repairs creating a digital identity or ‘birth certificate’ for every aircraft component. These digital identities will give real-time snapshots of an aircraft’s condition from its production to its retirement. 

Blockchain technology can, therefore, lower aircraft downtime, and costs of maintenance, improve worker productivity and boost the value of planes in secondary markets due to the availability of digitally verifiable paperwork. 

SkyThread is a novel blockchain project that supports the commercial aviation industry’s decentralized data sharing networks. The Independent Data Consortium governs its error-free peer to peer data exchange platform for Aviation. 

Blockchain technology in supply chain management 

The Defence sector has minimal visibility in the end-to-end tracking of goods via their supply chains. Consequently, there is a lot of miscommunication and confusion amongst all stakeholders. 

High levels of ambiguity build friction and unnecessary suspicion between business partners. To illustrate this point, Defence requisition officers often order a larger than the necessary number of items because they expect a shortfall on delivery. 

Then, many a department of Defence order delivery either has wrong quantities of products or incorrect parts. Wrongly delivered or lost shipments are part and parcel of business in many DoDs. 

Defence departments are exploring blockchain technology in managing supply chain risk and management. As per industry experts,poor and opaque contracting standards are national security and economic risk.

Most contracting chains, especially in Defence contracts, are weak due to subcontracting portions of work to smaller entities. Some consequences of data sharing on unclassified networks include the 2018 loss of US Naval Undersea Warfare Center data to Chinese hackers.  

Blockchain technology can build resilient networks. It will support the development of auditable supply chains and identity management for all stakeholders. Blockchain technology can enhance IoT device authentication and protect the integrity of the data these devices share. 

Another application of blockchain technology in Defence is collaborative intrusion detection. It can help flag compromised nodes that share false data and create mutual trust between collaborating parties. 

SIMBA Chain, a US-based blockchain startup that supports the creation of permissioned (a distributed ledger that is not publicly accessible. The users can only perform specific actions granted to them by the ledger administrators and are required to identify themselves through certificates or other digital means) and public blockchains for complex and secure environments recently closed a $25 million Serie A funding round from its partners.    

In January 2021, SIMBA Chain won a $1.5 million grant from the US Navy for their blockchain-based solution for critical replacement parts for weapons.

Conclusion

Blockchain technology is evolving from its sole use in cryptocurrencies to a disruptive $5 billion industry. Its market size will balloon to $228 billion by 2028, an impressive 72.9% compound annual growth rate. Much of this growth will stem from its transformative use in industries.

Large businesses will adopt it for its collaborative and global nature, leveraging it to enhance efficiency, transparency and security in failing centralized systems. As a result, blockchain technology will positively impact business and change it as deeply as the internet did two decades ago.

Any business left behind in blockchain technology adoption will go the way of the dinosaurs.

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