Trading goods can be traced back since human communication exists. From the earliest form of direct exchange of goods on local ground, through Hermes, the Egyptian God of trading, going through Vasco da Gama, the silk road and all the way to these days modern perplexing trading chains.
Globalization, diverse regulatory policies, and varied cultural and human behavior in supply chain networks make it almost impossible to evaluate information and manage risk in this intricate network. According to UNCTAD (Division on International Trade and Commodities), trading goods worldwide has increased dramatically over the last decade, rising from about $10 trillion in 2005 and to $17.5 trillion in 2017. A Eurostat statistic for 2018 shows the EU is topping the charts as the biggest exporter and importer. China second as an exporter and the United States third in place. It is said that one-third of the global production is exported, making traceability and trust the biggest issue in the chain network.
Value of international trade in goods and service in 2018;
Source – Eurostat
Since trading is very important to the global economy, raising living standards and enabling consumers to enjoy a greater variety of goods, tracing the origin and well acquainting with goods is crucial for running a successful trading business.
Traceability is becoming an increasingly urgent requirement and a fundamental differentiator in many supply chain industries, making blockchain technologies the perfect intelligence. It has the capacity to unite different fields of the chain network and make a record of the whole path of every product and make it accessible at any given time. The idea is to make a single global source of information where “Veracious and Simplicity ” is the motto.
The blockchain technology can highlight and detail at least five key product dimensions:
- nature (what it is)
- quality (how it is)
- quantity (how much of it)
- location (where it is)
- ownership (who owns it at any moment)
- under what conditions the product was build or assembled.
In this way, blockchain allows customers to inspect the uninterrupted chain of custody and transactions from the raw materials to the end sale product.
Considering that the fancy technology is most known for Smart Contracts and cryptocurrency, blockchain impacts not only the supply chain process and product management, but the financial transactions between different network parties as well. Via smart contracts where terms are set, payments can be made still on the manufacturing line.
Even though Blockchain is a relatively young technology, it is slowly but certainly making its way through different fields of life. From the art industry, helping business, to global trading, and more, blockchain has the potential to contribute to the world.
Check our previous article about the supply chain and how Blockchain can help your business.