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Two Knotty Problems That Blockchain Promises To Solve
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Two Knotty Problems That Blockchain Promises To Solve

When you cut through all the noise, hype, and confusion around blockchain and zero in on the areas where this innovative technology promises to provide real business value, only a few areas come to light.

The first, most promising area for blockchain is in complex, multiparty supply chains. Blockchain is potentially well-suited to keep track of the current state of any business interaction (say, negotiating a contract) across multiple parties and geographies, while providing an immutable audit trail for all concerned parties.

Another potentially lucrative use case for blockchain: provenance. If you need to know where something came from as well as how it got where it is, blockchain could be quite useful for keeping track of the data associated with whatever you’re trying to keep track of. It’s no wonder, therefore, that blockchain has found its way into various anti-counterfeiting business models.

3IPK’s Story

I recently spoke with 3IPK, a company that is bringing both of these promising business models together for the aviation industry.

3IPK is a startup that is developing a solution that – if all goes according to plan – will eventually automate certification, airworthiness, supply chain, and maintenance processes, not only for aerospace, but also for automotive, defense, and nuclear sectors.

Their starting point, however, is fixing some of the more pressing issues with aviation supply chains. “There’s a large supply chain in the aviation industry with a lot of data,” explains Maria Capova, cofounder and CEO of 3IPK. “Some of it is not reliable due to lack of approvals traceability, which causes large overhead to manage the data.”

At every step in the supply chain, one company must provide an approval to the next in order for commerce to continue to flow. Traditionally, the aircraft manufacturer had to keep track of all this information. “The aircraft manufacturer has the contracts with their tiers of suppliers,” Capova says. “They have to comply with the rules of the manufacturer.”

One of the most touted benefits that some blockchains provide is a decentralized architecture, where instead of a central party like the manufacturer controlling the information in its supply chain, each party is responsible for its own transaction processing node – and the underlying technology keeps all such nodes synchronized securely.

3IPK built its solution on DCore, the blockchain platform from DECENT. However, while DCore supports decentralized architectures, the blockchain’s role as an immutable ledger is more important for 3IPK. “Blockchain is good for the immutability of data,” Capova explains. “When you store documents in the blockchain, they stay on the blockchain forever.”

3IPK can thus maintain a full audit trail for every part in the supply chain, all the way back to the manufacture of the part. “We store the whole lifecycle of a part,” Capova says. “We guarantee the originality and identification of a part in order to detect fake parts.”

A Sprinkling of ‘Smart Dust’

To ensure the authenticity of a part, there must be a way to uniquely identify it. 3IPK uses ‘smart dust’ for this purpose. “You need to have some kind of identifier,” Capova says. “Smart dust is a great thing for uniquely identifying the aircraft parts.”

3IPK’s smart dust is essentially a unique physical identifier. ““They’re microparticles put on an aircraft part in a unique way to be read by a scanner, which can tell if the part is genuine or fake,” Capova says.

You can think of smart dust as similar to barcodes, only smaller and harder to hack. However, don’t confuse these smart dust identifiers with the electromechanical ones that more popularly go by the name ‘smart dust.’

Future is Bright

Matej Michalko, CEO and founder of DECENT, is sanguine about the opportunities for 3IPK. “When something as complicated as an airplane gets made from scratch, it has to source from hundreds of different suppliers around the world. Naturally, this also means that they need to verify, pay, and track the goods from these suppliers,” he says. “There are many other aspects of aviation that could use blockchain implementation. Airport/airplane maintenance, specifically recordkeeping and maintenance histories, for example.”

In addition to better management of approvals in the supply chain and dealing with counterfeit goods, Capova also believes that blockchain will accelerate payment cycles as well. “It’s much easier to get money,” she explains. “With blockchain you get paid immediately.”

Simplifying and accelerating the clearing of transactions is an important blockchain value proposition in certain businesses like manufacturers’ coupons, but it’s not clear that aircraft manufacturers or other parties will want to pay their bills any faster than they’re used to.

In fact, there is still the open question as to whether any of 3IPK’s blockchain-related value propositions are sufficiently beneficial to drive a large, change-resistant industry like aviation to change their ways.

After all, the industry has already implemented sophisticated supply chain software. Will better handling of approvals and part authenticity verification warrant a change of architecture? Only time will tell.

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