I recently ate a cut of the most expensive steak in the world.
It was date night, so I took my wife to a very exclusive restaurant in Las Vegas. I don’t eat a lot of steak, but I decided to splurge on a US$200 Kobe steak.
Every year, just 3,000 head of cattle meet the standards of Kobe beef. Fed special diets, some are even rumored to receive massages and beer. That pampered lifestyle ensures Kobe cows produce perfect “marbling” – cuts with small amounts of fat between the muscle fibers.
The waiter sat the plate down. The steak was medium rare, and I bit into it expecting magic. What I got was… pretty good.
I left the restaurant wondering what had happened. Either Kobe isn’t as delicious as the best chefs say or maybe I wasn’t eating real Kobe beef.
Soon, I won’t have to wonder whether I have the real thing. Blockchain technology is about to bring transparency to just about every industry on the planet: From luxury handbags to airplane parts to… yes… even cuts of beef.
|His New Prediction: The Greatest Day in Stock Market History
There are certain dates we remember.
Our birthday… a special anniversary… a national holiday.
Now a trend investor out of Florida who correctly called the rental property trend, legal marijuana wave, and blockchain boom… is telling folks to circle a new date on their calendars…
Why that day?
The supply chain problem
We all take for granted that the food we buy… the medicine we take… and the airplanes we fly on are safe.
But the reality is that counterfeiting and fakes, along with food safety and logistics vulnerabilities, cost companies and consumers hundreds of billions of dollars every year, and cause countless fatalities and injuries.
For example, every day, some 2.5 million passengers fly through U.S. airports, according to the Federal Aviation Administration (FAA), the U.S. agency tasked with ensuring airline safety. Aviation enthusiast website airliners.net estimates there are roughly 39,000 planes in the world.
Short of spacecraft, modern airplanes are the most technologically advanced transportation available.
The Boeing 747, for example, is made up of over six million parts, 171 miles of wiring and over five miles of tubing. Tens of thousands of planes, each having millions of parts… that’s over 100 billion airplane parts. And those parts all play an important role in ensuring that the plane stays in the sky.
Of course, sometimes these parts break. It’s rare. But it happens.
In the U.S., the FAA found that unauthorized or counterfeit airline parts contributed to nearly 175 aircraft accidents and incidents and 17 fatalities between 1973 and 1996. We’ve seen larger scale tragedies, too, like the 1989 crash of Norwegian carrier Partnair Flight 394 that killed 55 passengers and crew… the result of counterfeit aircraft parts that wore down and caused the tail of the airplane to break off mid-flight.
And in the late 1980s and early 1990s, the U.S. Congress held hearings on, amongst other issues, the problem of fake or unauthorized parts.
Among the questions were, who built the faulty parts? Were they properly installed? Who signed off on maintenance? Did the parts fail prematurely or was something else at fault?
Over the next 20 years, airplane manufacturers undertook a massive effort to track every part from every supplier on every plane they built. As a result, airline safety has improved dramatically.
But in 2016, an investigative report by media company NBC revealed that according to National Transportation Safety Board reports, “unapproved parts” had been involved in nearly two dozen crashes in the U.S. since 2010, with seven fatalities.
Sometimes, airlines think they’re getting approved parts. But that’s not always the case.
For example, it was discovered in 2016 that the Chinese suppliers to a U.S. flight control systems company were selling poorly made parts with fake paperwork. And the manufacturing itself had been outsourced to another (unapproved) company.
What’s needed is a secure and trustworthy system for supply chain management – that is, a way for airlines to track parts from manufacturing to delivery.
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Where the blockchain comes in
When most people hear the world “blockchain,” they think about bitcoin.
Blockchain is the technology that powers bitcoin. But it’s a whole lot more.
The Bitcoin blockchain is a network of computers, known as miners, that verify transactions. Every ten or so minutes the transactions are locked in place. Then another block is added, which forms a “chain” of secured and verified transactions.
In short, blockchain is the basic building block that allows bitcoin to exist separately of authorities and central banks. (You can learn more about the blockchain here.)
Because blockchain data is “decentralized”, meaning no one company controls it, it can’t be altered or falsified. It’s “immutable”, in the words of blockchain developers, and that makes it the perfect place to track supply chains.
The blockchain solution the world’s been waiting for
I was at the Consumer Electronics Show (CES) in Las Vegas in the U.S. state of Nevada last week. Over 180,000 people attended the convention to see the newest technological inventions and prototypes from around the world.
I met with the founders of three different organizations (who came from France, Luxembourg and the Netherlands to CES) who are perfecting technologies – powered by blockchain – to solve the problem of counterfeiting and fakes, along with food safety and logistics vulnerabilities.
This technology can track anything from Picassos to Piaget timepieces to individual heads of lettuce.
Because they’re so critical to safety, airline parts are already starting to get tracked on blockchains. One day soon, suppliers may be required to log not just every part, but every component on that part with a serial number that’s tied to a blockchain. Each entry will include data on who created the component and the precise date and time when it was made.
Tracking these items during the production and logistics process will eliminate fraud, reduce waste and improve the processes that products go through from beginning to end.
Even the beef industry is piloting special blockchain-tied tags that are attached to a cow’s ear shortly after its birth. That tag means suppliers can track cattle from the field to its packaging.
Then, once it’s in the marketplace, consumers will be able scan a code and see not just an animal’s origins but even data on its diet and freshness. Was your beef raised in Wyoming? Or outside Kobe, Japan?
Soon, you’ll know if that premium you’re paying for is worth it.
This is just one more way that blockchain innovation in our daily lives is growing – whether we know it or not.
Lead Crypto Analyst