
Redesigning Trust: Blockchain for Supply Chains - Anon84
https://www.weforum.org/projects/redesigning-trust
======
abakker
The supply chain argument for blockchain basically goes like this: 1\. supply
chains tend to require lots of coordination, but, also tend to be made of
entities that are each individually maximizing for value. 2\. In the past,
this meant that they needed to coordinate commercially, but only just enough
that the supply chain met everyone's bare minimum, contractually-defined
needs. 3\. typically, this mean that systems were not well-integrated, and the
data often didn't make it more than one or two steps in the chain before it
fell off.

The problem is that everyone in the supply chain knows that better data would
improve their operations, but nobody is willing to cede control of a
centralized system so that everyone's data can been coordinated and managed.
The semi-adversarial relationship that exists due to commercial terms means
that no member of a supply chain wants to give up more data than they have to
to a central entity.

Alternatively, the problem can also be viewed as a dimensions problem. In
reality, there is no natural "owner" of a supply chain. pick any member of the
supply chain, and put it at the center, and the data that it needs, and
collects will be a different set of characteristics than all the others. there
is obviously useful data that spans the whole supply chain, but for each
member, the way that data is grouped, pivoted, counted, and accounted for can
be different.

Perfect data entry into a system could solve the latter problems, and coupled
with differential privacy or other masking functions, you can enter lots of a
data into a system and each member of the supply chain should be able to
manage their business better, which in turn improves the performance of the
whole system.

The blockchain component is really only for the function of solving the
system-ownership prisoner's dilemma. Effectively, each member of the supply
chain owns the system, but its decentralized nature means that also no single
member owns it. A blockchain helps create a system for managing a supply chain
when there isn't an owner of the supply chain.

~~~
aey
I don’t see a specific need of a “blockchain” feature for this usecase.

Uber didn’t need decentralization to coordinate drivers and clients.
Aws/Postgres can handle the fault tolerance. FedEx already does this.

~~~
abakker
I agree, there is no need for a blockchain. But, that explanation is what has
been proposed as the justification for using one.

I would counter also that neither of your examples are actually supply chains.
FedEx is part of a supply chain, but only a single member. the chain includes
the manufacturer, wholesaler, etc. Uber also doesn't have a supply chain with
its drivers. It is not running a supply chain for that purpose, it is a
marketplace.

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luhn
Quite a few times I've heard the line that blockchain can revolutionize supply
chains, but I still don't understand it. Since you're dealing with physical
goods, you're relying on the participants of the system to enter data
truthfully and accurately, which defeats the purpose of a "trustless" data
store like blockchain.

~~~
Anon84
You're missing the IoT component. The devices themselves do the data "entry"
on the blockchain so the whole system is automated, distributed and tamper
proof (assuming you don't hack the devices, of course).

~~~
ska
That just punts on the problem. It's basically not solvable - at some point
you have to trust humans anyway.

The only reason this works well for, say, bitcoins, is that they are a digital
"asset" created on the chain themselves. Everything else trying to tie a
physical asset to a chain has the same problem, you can't do it without
relying on trust outside the system.

~~~
frm210
Sure, but you have to trust less humans. You only need to trust the source,
without needing to trust the middle-men.

~~~
hef19898
So in case of e.g. a fridge the source would be some copper mine in Africa and
the other end be Amazon Logistics that delivers the fridge to your house? When
you draw the line somewhere else the issue to be solved it balancing
transparency, trust, willingness of the channel master to share information
and the tendency for powerful entities to form.

------
hef19898
That article is not telling anything. No real use case, not concrete problems
that can be solved. From that source I would have expected more.

My thoughts: Supply Chain collaboration is the hardest thing to achieve, not
last because internal opposition has to be overcome first. The tricky part?
Who benefits from the efficiency gains?

Also, in case a certain company or Supply Chain is able to benefit from a
potential Blockchain application (I don't see any yet) it will be so far ahead
of anyone else already that Blockchain wouldn't level anything. And those that
are not there yet aren't _able_ to benefit from digital solutions. Because
their processes and culture aren't their yet. As a result the gap will only
become bigger and not smaller.

That being said, as long as Blockchain for SCM is not solving the problem of
_constantly_ matching physical and virtual flows without jeopardizing the data
and information of every party involved it won't work.

~~~
Anon84
The details are in the "related reports" at the bottom. This is the main page
for the project.

Edit pdfs:

\-
[http://www3.weforum.org/docs/WEF_Introduction_to_Blockchain_...](http://www3.weforum.org/docs/WEF_Introduction_to_Blockchain_for_Supply_Chains.pdf)

\-
[http://www3.weforum.org/docs/WEF_Trustworthy_Verification_of...](http://www3.weforum.org/docs/WEF_Trustworthy_Verification_of_Digital_Identities_2019.pdf)

~~~
hef19898
Then I stand corrected and I have some literature for the weekend!

------
apo
An unfortunately representative sample of the utter nonsense "blockchain
consultants" produce.

1\. "Blockchain for X" where X is something the client cares about.

2\. Blockchain is revolutionary, but blockchain is also complex. See what I
did there?

3\. I guess not. FOMO! FOMO! FOMO!

4\. Gather your stakeholders for a series of working groups where we'll figure
out what blockchain can do for you.

5\. I refuse to reveal even one problem calling specifically for the magical
Blockchain. Nor will I give you one single specific solution made possible by
only this new technology in your industry.

These pitches are targeted at people who have long since hung up their spurs
for the greener pastures of corner offices.

Funny in a way the first 20 times I saw it, but now this is really getting
old.

------
sagitariusrex
I don't remember who first said it but blockchain has exactly one killer
feature, Bitcoin. If you try to adapt it anywhere else you're _probably_
abusing the tech.

~~~
Anon84
I would argue that Ethereum smart contracts are much more useful than bitcoin
itself. PoW, on the other hand, is a complete waste of resources.

~~~
luckydata
Smart contracts are stupid for a variety of reasons, the biggest one is that
the main feature of contracts is not automatic and literal enforcement.

------
Deimorz
This is Case #1 in "You Do Not Need Blockchain: Eight Popular Use Cases And
Why They Do Not Work": [https://blog.smartdec.net/you-do-not-need-blockchain-
eight-p...](https://blog.smartdec.net/you-do-not-need-blockchain-eight-
popular-use-cases-and-why-they-do-not-work-f2ecc6cc2129)

The article does a good job of explaining why blockchain doesn't add anything
meaningful for this use (and other ones).

~~~
ioeatcode
The article talks about how blockchain is good at handling money transactions
but in the same breath says that logic doesn't apply to supply chain
management? Their analogy was extremely weak. Secondly, smart contracts? Does
the author not know smart contracts are applied to supply chain as well?

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albertgoeswoof
I bet they give up half way through and use a hosted database instead

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jonnydubowsky
[https://www.goland.org/off_chain_storage_and_the_enterprise/](https://www.goland.org/off_chain_storage_and_the_enterprise/)

This is a great article outlining several cases where blockchains are being
applied to solve supply chain issues ineffectively.

Yaron's assessment finds that

Key repudiation resistance is the only real compelling case where a blockchain
is the right tool for the supply chain. This is not to say that there aren't
valuable uses for blockchains within the context of more hyrid solutions.

"The block chain does some amazing things but accomplishing those goals comes
at a very real cost. Byzantine attacks are a pain and require lots of
resources to deal with. So if we don’t need to survive them then we don’t need
the block chain. This article isn’t about saying the block chain is bad. It is
about saying that we should use the right tool for the right problem. If your
block chain application is based on off chain storage then there is a non-
trivial probability that you may not actually need the block chain. It’s worth
at least thinking about".

------
papito
There is this company that implemented land sale management - I think in
Georgia (the country) - and if you go to their website, they just tout what
technologies they use. We use Rust! It's type-safe! That's the kind of people
who will try to sell you blockchain. Blockchain, obviously will solve all your
problems.

I honestly cannot think of another more overhyped and useless technology right
now.

------
idlewords
I feel like "blockchain" must be a mental shorthand for something different to
these people, and that they are not all delusional and insane. What am I
missing?

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cortesoft
They mention there are 'misaligned interests' in supply chains, but I am not
sure what interests are misaligned?

~~~
itsmyrun
A producer is interested in maximizing profit. A consumer is interested in
maximizing value.

Both parties may act to further their own interests at the expense of the
other's interests.

~~~
cortesoft
This is the same conflict in every marketplace exchange, and something a
blockchain doesn't address.

