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Blockchain: Backbone for today's business, tomorrow's world

Blockchain technology is simple in philosophy but extremely flexible in its many applications. By presenting a permanent and transparent record, whoever is using blockchain can have an archive of data vetted and confirmed for accuracy. Chinese multinational company Wanxiang — the country’s largest company of its kind — believes in this philosophy so much that it is employing blockchain in two different but significant ventures: its core business as automotive component manufacturers, and secondly its part in one of the biggest technological revolutions to hit our society — the smart city initiative.

In fact, its belief in blockchain technology is so profound that the company decided to invest in blockchain startups to bring this to life. Blockchain, when appropriately adapted and scaled, represents the next step in encrypted data and online security. Wanxiang trusts in this so much that the company is betting its current business, its future projects, $7 billion, and even its home city on blockchain.

Why blockchain?

Wanxiang’s core business involves manufacturing a variety of components for the automotive industry, with a heavy emphasis on batteries. Though Wanxiang is headquartered in Hangzhou, it has offices and facilities in the United States, South America, Europe and Australia. This means interfacing with vendors and customers around the world, with countless shipments coming in and out across some facilities. From a logistical perspective, millions of records are transmitting every day with different types of data: orders, purchases, critical emails and much more.

As the blockchain offers a permanent and transparent record of transactions, Wanxiang elected to use this platform for supply chain management of batteries across the process. Through blockchain, tracking across all steps is streamlined and accurate, helping the company save time and money from start to finish.

Separate from the auto industry, Wanxiang’s interest in the smart city model is a large step in helping its home town be the future of how cities operate. The notion of smart cities looks at the integration of the internet of things philosophy into urban development. Government information, schools, transportation, hospitals, utilities and other city elements that can be optimized through real-time metrics and feedback represent a sea of change in the way cities can potentially maximize their efficiency. With that much proprietary, personal and classified information flowing back and forth in a smart city network, there needs to be a safe way to protect it from tampering. Wanxiang sees blockchain as the underlying software that will bring that vision to reality — and it is making it happen. The company has committed $30 billion over the next seven years for the project.

Incubating the blockchain

In order to get blockchain technology to commercial grade, Wanxiang understood that it needed to invest further as a means of acceleration. Through Fenbushi Capital, Wanxiang put $50 million into blockchain startups, including Factom. This investment is designed to fine-tune the technology that allows blockchain to scale up to required levels.

The executives at Wanxiang aren’t the only ones looking at smart cities. In fact, areas and governments from all over the globe are starting to consider the infrastructure necessary to bring the smart city online — and many of them are coming around to the idea of blockchain as the backbone of these systems. “We have seen an overall race for the future that all the major governments are now playing. That is why we saw a reversal to some extent on blockchain,” said Peter Kirby, CEO of Factom. “We’ve spoken with governments about their desire to be a financial headquarters for the world: London, Singapore, Luxembourg, Dubai and so on. Blockchain creates transparency and permanence, making it a shoo-in for financial record keeping, really, any record keeping. It’s just better. Also, the United States and China — via their corporations — are starting to understand that the benefits of the blockchain make it a valuable ally for their security stack.”

The Wanxiang showcase

Wanxiang’s interest in blockchain technology puts a spotlight on its very best features and applications. By making it part of its supply chain management process, it demonstrates how accurate record-keeping can be vital to optimizing the end-to-end process. By banking on it for their smart city projects, it showcases how the model created for blockchain can be the foundation for all types of highly sensitive data.

All IoT Agenda network contributors are responsible for the content and accuracy of their posts. Opinions are of the writers and do not necessarily convey the thoughts of IoT Agenda.

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