The future has arrived. FreightHub is now accepting Bitcoin as a way of payment for its digital freight forwarding services. Customers benefit from smart contracts, fast, and secure payments.
With so much insight and speculation already out there about blockchain and cryptocurrency, readers are starting to experience “media fatigue.” You’re probably tired of your friends hyping their cryptocurrency investments on social media, and at this point, you’re starting to wonder whether we’re all being taken for a ride. Rest assured, we’re not. What’s most exciting about these developments is the interplay between the distributed transfer of ownership and the technology that underpins this ecosystem – blockchain.
Regardless of what brand of cryptocurrency we ultimately end up using ten years from now, this technology is becoming an integral part of our economy.
Three paragraphs in, and you’re probably wondering why we haven’t mentioned Bitcoin, the most established cryptocurrency and a name that has become synonymous with blockchain technology.
That’s because while Bitcoin certainly is a revolutionary way of paying for goods and services, we prefer to talk about it in the context of an ecosystem that has sprung up around us. In logistics, one story after the next detailing new experiments has convinced us that blockchain technology is here to stay. As a company built around the idea of pushing technology and market innovation as far as it will go, we’re excited to be the first company in our sector where customers can transact with this digital currency!
Where we’re heading
But before we hit you with the details, it’s worth considering how this all fits together, and where blockchain is taking the industry. The best place to start is by talking about “trust” – specifically, how important it is, and how blockchain adds a layer of protectivity that customers are sure to want.
Logistics companies very existence is premised on trust. Our customers hand off millions of dollars’ worth of freight to us because they believe that we’ll get it from point A to point B safely, on time, and more efficiently than they can. And 99 percent of the time, that’s what logistics companies do.
That’s also why news that criminals had hacked Maersk’s computer network and made off with priceless trade data was such a shock. Incidents like that make shippers second guess how much data they are willing to share with carriers, but without that communication, we’ll never achieve the sort of efficiency and visibility that we’re after.
That’s where blockchain comes in, and where Bitcoin follows because in conjunction, these two new technologies eliminate the security loopholes that hackers exploit.
Think of blockchain as a distributed ledger that can record transactions between parties in a secure and permanent way. Since everyone “shares” the same databases, blockchain removes the need for intermediaries. That means, everyone’s commuters work together as a massive cloud. By moving from a centralized to a decentralized and distributed system, blockchain liberates data that was kept in safeguarded silos without compromising security.
With your information stored across thousands of computers, hackers would theoretically need to take over more than half of them to seize your data – which is impossible and hasn’t been proven possible to date.
What does this mean in application? Anyone with sensitive data from all stakeholders – ranging from medical companies to logistics to government actors – could share it using blockchain’s encryption and data protection. No key? No access. Plus, owners control how much data they want to share. A last-mile delivery company, for example, would only access details needed for their part of the supply chain, but the owner of the data would see everything, and immediately become aware, if the shipment is in distress or otherwise waylaid.
In logistics, sharing data across the supply chain will also enable improved transparency, empowering companies to make smarter choices about the products and services they offer. Because every alteration of the ledger is traceable, blockchains are starting to give us insight into efficiencies and weak links at the granular level. If there’s always a problem at a certain node, it’s easy to get detailed information about it.
When it comes to payments, blockchain allows companies and customers to adopt a common digital currency as an alternative to traditional money. That means instantaneous and verifiable transfers and microtransactions without intermediaries.
Blockchain is garnering more and more media attention, and in logistics. There are hundreds of viable experiments that could go mainstream. And while much of the public’s awareness is driven by Bitcoin, the underlying technology is making just as big of an impact, even if there’s less breathless coverage of it by the media.
We’re still learning as we go. Questions remain – where is blockchain headed, when will it yield mainstream results, and who will benefit from it?
It’s too soon to say…
What’s clear is that blockchain applications may have one of the most profound impacts on the logistics industry, especially the supply chain. In addition to Freight Hub, hundreds, possibly thousands or more companies are looking into blockchain to improve efficiency, but it’s the supply chain potential that has us the most excited.
We could go a lot further down the rabbit hole, but before we do, here’s what you need to know about Bitcoin:
- Bitcoin is the leading digital currency that uses cloud storage and decentralized peer-to-peer blockchain technology.
- Bitcoins are digital assets, also known as a cryptocurrency, which is used as a medium of exchange.
- Blockchain is the technology that drives Bitcoin, enabling transactions in a trusted and secure manner between pseudo-anonymous parties.
- Anyone can participate in the Bitcoin blockchain and ownership is transferred digitally, without the need for an intermediary.
- There are thousands of digital currencies available, including Ether, which uses the same technology for its blockchain-based ethereum platform, but Bitcoin has the most stored value currently.
- Bitcoin’s volatility and liquidity, as well as its ability to bypass banks and financial institutions, has led to criticism, but as its mainstream appeal grows, that’s diminishing.
- The creation or “mining” of Bitcoins is done through computers solving complex mathematical equations. While Bitcoin is mined, there is a limited supply, and other currencies are simply established with a set cap.
- The current mining and transaction costs for cryptocurrencies are energy-intensive, which is a growing problem as the number of transactions increases.
Now that we’ve covered some of the basics, here’s a couple of reasons why blockchain is such a great fit for digital logistics companies such as FreightHub.
Transparency
A record of every blockchain transactions is permanently stored in an accurate, tamper-evident, and verifiable way. Every stakeholder receives controlled access to a shared dataset, which means that there is a single source of truth. Everyone working with this dataset has access to the most recent, accurate, and reliable data.
Security
Before blockchain, anyone who got past security could, in theory, delete, steal, or alter data without permission. With blockchain-based systems, all individual transactions and messages are cryptographically signed. That means, you can always identify any malicious activity, and then reverse alterations that are illegitimate. This is especially important in the face of today’s risks of hacking, data manipulation, and compromise.
Asset management
Blockchain is a great way to manage ownership of digital assets. Logistics companies can use blockchain to track the ownership of a shipment and digitize value carrying trade documents like bills of lading. This way, there is always an established record of ownership.
Smart contracts
Legal contracts are on course for a shakeup, through self-executing computer programs “smart contract.” A smart contract uses blockchain to automatically enact the terms of agreements once other conditions are met. Smart contracts are fully autonomous. For example, if a shipper has agreed to pay a carrier once delivery is verified, a smart contract would automatically transfer the value to the carrier once that handoff occurs. And because all parties can verify the location and state of the shipment, there’s no room for dispute. It’s more efficient, and it’s faster.
Logistics is a highly complex business, and there are a lot of moving parts. With so many parties involved in a single shipment, there’s plenty of room for conflicts of interests. Blockchain could alleviate a big chunk of this friction in global trade logistics. By tying together everything from transportation management to customs collaboration and trade finance, we’re just scratching the surface of ways to create efficiencies.
Blockchain, Bitcoin, and FreightHub
We work closely with shippers and carriers alike, and what we hear over and over again is that they want to be in control, and that means visibility and timely payment.
By offering Bitcoin payment, we’re giving our customers more control than ever, and more choices. Customers can pay immediately after booking and operations can start right away with the booking. That means no more waiting until money is available, blockchain transactions take seconds. Here’s how it works. Customers books a quote on our website and are sent an invoice by email with the possibility to pay with Bitcoin. The customer clicks on the link and gets redirected to cubits, where he or she can pay, and the payment is transferred almost instantaneously.
A decade ago, conventional freight forwarders were sending out invoices in the post, and it could take months for payments to process. That’s why we’re so excited to be a part of the blockchain-bitcoin revolution, and we’re honored that you’re on board with us.
