New blockchain solutions, including the IBM Blockchain platforms on which users can build their own blockchain applications, are allowing for quick development and ease of use to provide traceability and consensus systems for a range of industries, says information technology multinational IBM South Africa blockchain lead Gerhard Dinhof.

Blockchain has moved beyond the proof-of-concept phase into adoption of the technology, especially in the financial services sector.

New solutions like IBM Food Trust and TradeLens hide the complexity of these systems and are allowing for greater innovation using blockchain as organisations craft their own blockchain-based systems to meet their specific needs.

“While South Africa does still lag a bit behind international blockchain adoption, there are several live blockchain deployments locally and more projects are being developed. With blockchain infrastructure and an ecosystem in place, we are entering the third phase of blockchain’s evolution,” he says.

With infrastructure and ecosystem resources, users do not need to be blockchain experts to build their own smart contracts and the trend is also moving towards blockchain as a service, which will further allow for the use of predefined resources to build fit-for-purpose solutions and host blockchain networks, says Dinhof.

“The platform has all the normal features of a traditional software solution, including an easy-to-use interface and application programming interfaces to integrate with existing systems. “However, this phase of blockchain development will see the more rapid adoption, use and scaling up of blockchain-based systems.”

Blockchain solutions can also link with other blockchain systems to provide additional functions, such as using a verified trusted supplier database of one industry to verify potential suppliers and business partners.

The trustworthiness of a business can be verified on multiple levels by using information from third-party or open blockchains, public data and due diligence processes. This eases and speeds up the work required to check the information and performance of a company.

Most of the current uses of these blockchain ecosystems are to enhance the traceability and control of supply chains, and blockchains form the basis of the global food safety IBM Food Trust initiative.

Global freight and transport companies are using blockchain to reduce the burden of paper-based processes, as well as to accelerate the clearing and management of goods through ports and along the supply chain.

The uses of blockchain systems are also broadening to include sensitive cargoes, such as medicines, cold-chain supply chains and Internet of Things (IoT) systems.

For example, in a pilot conducted by Golden State Food, a blockchain system is used to monitor IoT temperature sensors, while a cargo is in transit and, if a temperature rise over a limiting threshold is detected, the company can initiate mitigation measures, such as ordering more medicine or claiming from the transport company.

“While such IoT uses are already common in cold chains worldwide, blockchain systems provide the means through which companies can include information directly from partners and service providers along a supply chain, reducing losses and associated costs, and adding the required trust to the process.”

The granularity of information shared on blockchains means that they can also be applied to industries where much of the work is handled by third parties such as subcontractors in the construction industry.

All subcontractors, and the work they must perform, as well as copies of their certification records and competences, can be placed onto a blockchain. The main contractor and clients can then readily access information about companies, large or small, working at sites. The immutability of blockchain-based solutions provide an audit trail.

IBM has large and multinational enterprise blockchain development partners. However, Dinhof emphasises that blockchain is not limited to large supply chains and the visibility and traceability facilitated by blockchain can add value in many industries.

In Kenya, IBM worked with food logistics startup Twiga Foods to use blockchain to determine a credit score and distribute microfinance loans for small food stands across Nairobi. This specific platform connects small enterprises, banks and fast-moving-consumer-goods companies to support access to working capital and help the small businesses to develop a financial profile or identity. IBM used blockchain, based on the Hyperledger Fabric, to manage the lending process from application to receiving offers and accepting repayment terms.

“The project gives all participants visibility of smaller suppliers and creates a digital identity for the supply chain partners, which they can use to host their certificates as proof of their capabilities and to more readily integrate into other supply chains,” concludes Dinhof.