Remember your initial impressions of Internet 1.0? Did you take one look at its dial-up modems and proprietary networks and immediately picture today’s always-on, always-connected world? Most people wondered how it possibly could offer them anything of value, although a visionary few saw the new technology’s promise.

Today, the same picture of promise applies to blockchain technology. Even if you’re unsure of what it does and how it does it, you probably have heard it mentioned as the protocol that underlies bitcoin and other digital currencies. Blockchain can influence or even change commerce and manufacturing. Its implementations – and their implications – may surprise you. Sooner than you expect, they may revolutionize the way you do business.

Before you can envision the impact of blockchain, start with an understanding of what it is and how it functions. Blockchain consists of a chronological sequence of individual data records, each with a time stamp, an encoded identification and a repetition of the previous entry’s cryptographic ID. Because this information is chained together, any act of tampering triggers an alert in the blocks that follow an altered record.

For security as well as transparency, the chain stores and shares its records on decentralized, globally distributed computer nodes in the network of devices known as the cloud. If any computer on the network experiences corruption, the other systems immediately reject the data as out of spec. The process makes blockchain records virtually impossible to falsify, alter or misuse.

Practical examples show how blockchain adds value. In France, grocery retailer Carrefour implemented blockchain tracking for its meat, milk and fruit, enabling consumers to scan a QR code on a product and instantly obtain information about where it was grown, harvested and packed, how long it spent in transit and how to prepare it. The program began with 20 items, with expansion plans focused on choices such as organic produce and baby products.

In manufacturing, blockchain can create a multi-dimensional set of chronological instructions for a job or process, from the part designer’s specifications to part-making instructions, eliminating the need for operator involvement and additional data. This simplification helps save time and money while it virtually eliminates tampering and protects against data theft. With the growing emphasis on automation as a way to expand production without hiring additional personnel, blockchain can offer an ideal way to facilitate smart factories and processes.

Because the technology creates a data record that protects against alteration, it provides a high degree of traceability. Cloud storage makes all the information in each blockchain record available to anyone with access to the system. For a toolholding manufacturer such as REGO-FIX, blockchain offers an ideal way to identify many aspects of our parts, how we manufacture them and how our customers can validate that the collets they purchase are genuine REGO-FIX products.

We currently generate large amounts of traceability information about all aspects of our products, including supplier and alloy data about raw materials, their hardening protocols, identification of the equipment and quality-assurance measures that produced each lot of parts. Because we own and store this information, a customer might want further proof from an independent source – which is exactly what blockchain provides.

Just as we already accept bitcoin payments, we look forward to implementing additional aspects of blockchain to serve our customers. With access to cloud-based blockchain data on every aspect of part production, our customers would be able to verify that they have purchased genuine REGO-FIX toolholders – and learn everything they want to know about them. Many questions remain to be answered before that scenario becomes a working reality, but the blockchain technology on which it will rely is here today, ready to power an exciting future.

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