by David Drake
Over the years, the application of blockchain has largely been associated with the financial sector. This is perhaps because of its ability to enhance transparency in financial transactions and reduce the cost of transferring funds. But this is now changing as companies develop blockchain-based solutions across sectors. Great examples of innovative solutions powered by blockchain include Noiz Chain and Epic Mega in marketing and entertainment content, respectively.
But the largest application of blockchain outside the fintech sector is happening at Walmart. Earlier this year, this US-based mega retailer made public its plans to utilize blockchain technology to enhance transparency in its food business, improve its contamination management and reduce wastage.
Last month, the retailer made its plans definite. Media reports now show that Walmart has everything set to begin rolling out blockchain-based supplier management in 2019. The retailer says that starting next year, its leafy green vegetable suppliers will begin using its blockchain-based system to monitor contamination. Once rolled out, Walmart’s blockchain platform will mark the beginning of mass adoption of the technology in managing logistics, something that is yet to happen in the fintech sector.
While fintech has, in the past years, led the way when it came to demonstrating use-cases of blockchain technology, there is no doubt that the technology is being understood better and its possible utilization in other sectors is becoming more evident.
John Hoelzer, founder and CEO at ONe Network says, “Fintech has been the Soup of the Day for quite some time, as it should have been. But now blockchain is becoming more and more mature and understood. This allows for different markets to find new ways of using Distributed Ledger Tech to better their own industries.”
The bold step taken by Walmart to launch blockchain application in its food management system comes at a time when research reports have painted a grim picture on adoption of the technology. Just recently, a report produced by Forrester Research showed that 90% of all blockchain initiatives that are active in the US will be abandoned. The report predicted that most blockchain projects in the US will be halted before the year ends and that 90% of such projects won’t become part of the operations of firms that initiated them.
Walmart’s move to develop an entire blockchain-based tracking system is a clear indication that the logistics sector could overtake fintech in achieving full adoption of the technology.
“Logistics will be one of many different industries who will use and benefit from immutable ledger,” Hoelzer adds.
But beyond pushing logistics management to the forefront of blockchain adoption, Walmart’s case demonstrates that the development of real products in the industry is possible. This will cause a shift in the way investors finance initial coin offerings (ICOs) according to Jose Merino, Chairman of SID Limited.
He says, “It is unfortunate that blockchain was often associated with Fintech as a value asset for tender or payments. When combining the previous with the current results over the last two years, ICOs that failed to release a product or to generate any meaningful user-base make the outlook to seem grim. Yet nothing is further from the truth. Past failures tend to result in a massive self filtering of project funding shifts.”
Merino further argues that future financing will be more focused on real products. “Basically, future funding will only go to existing real live products that have a real industry use, as will be the case with Walmart´s blockchain logistics tracking system. I believe that the blockchain industry overall has finally come to grips that funding has to be given only to those projects with real existing products and having a real life use-case for industry sectors or end-users,” he adds.
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.