Blockchain Is Good for the Supply Chain.
Here’s Why Blockchain + RFID/NFC Is Even Better.
Blockchain may be closely associated with cryptocurrencies, since it’s
the technology used to record digital-currency transactions, but blockchain is
transforming other businesses, too. The promise for blockchain is so strong,
in fact, that a
July 2018 article in Forbes magazine
reported that “ten of the largest public companies in the world are
exploring blockchain,” and “at least 50 of the biggest names on
the [Forbes 2000] list have all made their own mark on the technology first
inspired by bitcoin.”
Blockchain is a digital ledger used to record an event. The event can be just
about anything—a financial transaction, the transfer of a good from a
manufacturer to a supplier, the passing of a checkpoint at a border, a vote
cast by a citizen. And because blockchain does such a good job of recording
events while maintaining transparency and security, the technology is finding
its way into a very wide range of use cases.
Improving Supply Chains
Perhaps the biggest application of blockchain to date is in the supply chain.
By securely storing all the information relevant to the management of a given
supply chain, which can span hundreds of stages and dozens of geographical
locations, blockchain gives manufacturers, shippers and customers a way to
gather important data, analyze trends, assure authenticity, implement
predictive monitoring and respond more quickly to inquiries.
A blockchain ledger grows as new sets of transactions, or
“blocks,” are added to it. Each block contains a timestamp,
relevant transaction data and a cryptographic hash of the previous block, thus
forming a “chain” of blocks. The chaining provided by the
cryptographic hashes ensures a high degree of integrity, from the most recent
block all the way back to the original block in the chain. Also, the integrity
and authenticity of individual transactions are protected by a cryptographic
digital signature computed on the basis of the corresponding asymmetric key
pair of the transaction owner.
Another feature of blockchain is that, unlike most traditional databases, it
is not stored in a single location and controlled by a single entity.
Blockchain is distributed across a number of different data-storage entities,
each holding the same, unalterable copy of the data. This gives all players in
the ecosystem equal access to blockchain data.
When used with a supply chain, for example, blockchain can register the
transfer of goods. Ledger transactions can identify all the parties involved
along with the date, price, location, quality, state of the product and any
other relevant information. Real-time availability of transaction data makes
it possible to trace items back to their origins and thereby combat
counterfeits, reduce grey-market diversions and verify provenance. At the same
time, the decentralized structure prevents individual parties from
manipulating data and cryptography makes the system more resilient to hacking.
Using blockchain in the supply chain can also benefit consumers, since data
from the blockchain can be provided to customers as a way to guarantee
provenance and verify authenticity.
Some of the biggest names in enterprise software and cloud services, including
IBM, Baidu and Accenture, now offer supply chain-oriented versions of
blockchain, either as part of open-source consortia and industry associations
or in a Blockchain-as-a-Service (BaaS) format. The blockchain ledger runs on
their cloud space and customers can use configurable software to tailor their
blockchain implementation and integrate it into their existing systems.
The IBM Food Trust™, for example, is a blockchain-based suite of
solutions for creating a smarter, safe and more sustainable food system.
Accessible by participants across the food supply, from growers and processors
to wholesalers, distributors, manufacturers and retailers, the Food Trust is a
permissioned, permanent and shared record of food system data. The solution is
designed to eliminate bottlenecks in the supply chain while helping to ensure
food safety and regulatory compliance and enhancing brand reputations for
safety and quality.
Demand for these types of services is expected to grow quickly across all
sectors, not just the supply chain. ABI Research, in their most recent market
report on the subject, predicts that global revenue from blockchain and other
distributed ledger technologies will grow from USD 1.3 billion in 2019 to USD
13.2 billion in 2024.
The NXP Perspective
At NXP, we are a long-time provider of supply-chain technologies and we see
the potential value in blockchain. We agree that there are benefits to using a
shared, distributed, permission-based database to manage supply chains. And we
agree that, by adding transparency, security and traceability, blockchain can
make supply chains faster and more efficient, especially when originality and
provenance are key concerns.
At the same time, though, we see a way to improve the way blockchain is used
in many of today’s implementations. Blockchain is, at its core, a new
kind of database and, like any database, is only as trustworthy as the data
that is entered into it. While blockchain uses cryptography to safeguard data
and can be expected to protect information effectively once it’s in the
ledger, the typical blockchain implementation could do more when it comes to
preventing inaccurate or fraudulent data from entering the ledger.
Most implementations use a vetting process to clear contributors before they
enter data into the blockchains. But the sources for blockchain data are often
based on data carriers, such as QR Codes, which can be easy to fake or
duplicate. What’s more, data capture is generally based on a manual
process or a process with low levels of automation and this is both
inefficient and prone to errors.
The vetting performed on blockchain contributors is often not very thorough
and can be faked without much effort. Also, the sources for blockchain data
are often based on manual entry or low levels of automation, which can lead to
errors while capturing data or entering information.
It’s our view that, to make the setup work effectively in the supply
chain, blockchain implementations need to include mechanisms that better
protect information and automate data handling. And this is where NXP can
help. Our industry-leading supply-chain technologies, which are already used
throughout the Internet of Things (IoT) to secure IoT objects and efficiently
provide data to the cloud, can enhance blockchain setups by helping to ensure
that only quality data from authorized sources is captured and entered.
RFID/NFC to Eliminate Manual Data Entry
Our RFID/NFC portfolio provides item-level tagging, so each item tracked in
the blockchain has its own unique identity and can create its own history. Our
RFID/NFC tags are also available with sensors that can be used to monitor
conditions, such as temperature and humidity, to ensure safe handling of
perishables, medications and other sensitive items.
Item-level data can be configured to flow into the blockchain ledger
automatically, with more transactions per second, more enrolments per day and
more units contribution information at once—making manual entry both
outmoded and unnecessary. High-level security mechanisms, embedded in tags
such as those based on our DNA family of RAIN/NFC ICs, protect data with
cryptographic authentication so only trusted information is stored in the
blockchain. The tags themselves use very little power and require only minimal
network bandwidth for transactions, yet provide ample memory to store relevant
data and are easy to configure for cloud and blockchain connectivity.
Also, because NFC reader technology is now available in every major brand of
smartphone, consumers can check provenance and verify authenticity by simply
tapping the NFC tag placed on a label or the product itself.
IoT Security Solutions for Protected Access
As a complement to our RFID/NFC portfolio, our IoT security solutions, which
include everything from secure elements and secure access modules (SAMs) to
secure micorcontrollers and microprocessors, can authenticate anyone or
anything trying to access the blockchain setup, thereby ensuring only
authorized sources provide data to the ledger or access its contents.
End-to-end Automation and Protection
Working together, our RFID/NFC and IoT security portfolios add automation and
protection throughout the IoT ecosystem, from individual sensors to smart
devices and gateways. When used with a blockchain solution, these technologies
can authenticate assets, deploy and protect the credentials used to
authenticate blockchain participants, enable secure processing and device
management at IoT endpoints and can provision secure secrets for use with any
embedded hardware that connects to the blockchain.
NXP adds automation and security throughout the IoT ecosystem
Our technologies provide a root of trust for blockchain data, so supply-chain
managers can be confident that the information they’re getting from the
field is both trustworthy and protected. As a result, we’re able to
reduce the risks associated with blockchain, making it even more secure,
robust, convenient and efficient in supply-chain applications.
A Powerful Combination for Supply Chains
As a leading innovator in supply-chain management, we’re already known
for our ability to add value and solve problems while protecting
brands—even when blockchain isn’t part of the scenario. In those
cases where blockchain will add value, by bringing a distributed, shared
architecture to supply-chain operation, our
portfolios make a compelling solution even better, by adding extra levels of
verfication and authentication. When supported by secure RFID/NFC, blockchain
can be a remarkably powerful tool for today’s businesses.
To learn more about the NXP portfolio for supply chain and how we can help
automate and protect blockchain implementations, visit
or contact us at email@example.com.