Many of the most advanced and successful blockchain projects involve use cases related to supply chain and logistics, ranging from documentation management and goods tracking to trade finance. Having access to a “golden record” of key data is clearly a benefit in its own right — no more phone calls and email exchanges to reconcile data, everybody knows where the goods are, and so on. But for many use cases, that’s not enough.
Any blockchain network that involves the tracking of an asset — whether it’s an expensive piece of equipment or a shipment of fresh strawberries — needs more data than just the location of the items. Have those strawberries been kept within a prescribed temperature range? Has the equipment got damp at any stage? And even, is this item genuine, and has nobody tampered with it? Without an understanding of the condition of the goods, companies won’t be able to leverage the benefits of blockchain networks to full effect. Enter the internet of things (IoT)!
There are also more futuristic applications of the IoT/blockchain combo: Many paint vivid pictures of self-managed (potentially even self-owned) devices that interact autonomously and settle economic transactions between them. When my colleague Paul Miller and I embarked on a research project to discover the state of the art when it comes to IoT and blockchain in combination, we weren’t surprised to find that this future hasn’t arrived yet. What did surprise us, though, was the comparatively small number of projects that are moving beyond the proof of concept (PoC)/pilot phases for use cases that are achievable today.
Or maybe we shouldn’t have been surprised — operationalizing is hard! Organizations find it difficult enough to grapple with new technologies like blockchain and IoT without adding the complexity of doing all of this at scale and in the sorts of loose federations of partners and competitors where blockchain makes the most sense. And we also found that there are still many projects where the teams have failed to address some of the fundamental questions that need answers before tech development proceeds. These include:
Interested in finding out more? Read Paul’s blog post, or check out the full report, “IoT And Blockchain: A Powerful Pairing That Doesn’t Yet Live Up To Its Promise.”
Martha Bennett, vice president and principal analyst at Forrester contributed this article, which can also be found here.
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of CDOTrends.