Module #3 Discussion
mayur1224
Blockchain_Book.docxTHE TWELVE DISRUPTIONS: ANIMATING THINGS What possibilities are there for animating the physical world? Unlike Pinocchio, we don’t have a Blue Fairy. (And unlike Pinocchio, the blockchain doesn’t lie.) But today, right now, we have distributed ledger technology that will actually enable not only GE to “bring good things to life.” Even better, Pinocchio can’t go long-nose on the ledger. We’re in the early days of thinking about the possibilities of the Ledger of Everything (built into the IoT). While consumer devices have received the most attention in the popular media to date, there are potential applications across virtually every sector. There are many ways of classifying and grouping potential applications because so many applications cross boundaries and could fit into more than one category. McKinsey, for example, uses the concept of settings in its classification of the IoT.20 We’ve identified opportunities for the Ledger of Everything in twelve major functional areas. Specific benefits—and the business case—will be specific to each application. The categories below illustrate the potential and the potential significant disruption to existing markets, players, and business models.
1. Transportation In the future, you’ll call up an autonomous vehicle to get you safely where you need to go. It will intuitively take the fastest route, avoid construction, handle tolls, and park all on its own. In times of traffic congestion, your vehicle will negotiate a passing rate so that you arrive at your destination on time, and freight managers will use the blockchain-enabled IoT on all cargo to clear customs or other required inspections quickly. No red tape. Allianz, a manufacturer of street sweepers, could equip its municipal machines with minicam or sensor technology that identified cars whose owners hadn’t moved them (if they couldn’t move themselves) on alternate-side-of-the-street-parking days in New York City, feed that sensor data to the traffic police, and spare the physical writing of parking tickets. Or, the street sweeper itself could extract the parking fine in bitcoin from the car itself as it swept by—because the New York State Department of Transportation would require all cars registered in the five New York City boroughs to maintain bitcoin wallets connected to their license plates. Autonomous vehicles, on the other hand, would sense the oncoming sweeper and simply move themselves to let it pass.
2. Infrastructure Management Many professionals will use smart devices to monitor location, integrity, age, quality, and any other relevant factors of pavement, rail lines, power poles and lines, pipelines, runways, ports, and other public and private infrastructure in order to monitor conditions, detect problems (e.g., breakage or tampering), and initiate a response both rapidly and cost-effectively. That’s where companies such as Filament will come in, with new affordable technologies to animate existing infrastructure without the huge capital required to replace it. Eric Jennings of Filament estimates that “over 90 percent of infrastructure is currently disconnected, and it’s unfeasible to rip it all out and replace it with brand-new, wireless, connected assets.”21
3. Energy, Waste, and Water Management “Send a truck to empty me,” said the overflowing waste bin. “Fix me,” said the leaky pipe. The Internet of Things should inspire a hundred new children’s books. Traditional utilities in both the developed and developing world can use the blockchain-enabled IoT for tracking production, distribution, consumption, and collection. As we’ve already seen, new entrants without significant embedded infrastructure are planning to use these technologies to create entirely new markets and new models (e.g., community microgrid).
4. Resource Extraction and Farming Cows can become blockchain appliances, enabling farmers to track what the cows eat, which medications they’ve had, and their complete health history. This technology can also help track expensive and highly specialized equipment and make it more widely available for just-in-time usage and cost recovery; improve miner and farmworker safety through tagging of safety equipment and automated checklists (to ensure that equipment is being used properly); monitor weather, soil, and crop conditions to start irrigation, automated harvesting, or other actions; and compile “infinite data” analytics to identify new resources or advise on agricultural best practices based on past patterns and results. Sensors in soil and on trees could help environmental protection agencies to monitor farmers and their usage of the land.
5. Environmental Monitoring and Emergency Services Remember autonomous weather agent BOB? BOB will live in a world of weather sensors and make money collecting and selling critical weather data. Examples here include monitoring air and water quality and issuing alerts to reduce pollutants or stay indoors; flagging dangerous chemicals or radioactivity for emergency workers; monitoring lightning strikes and forest fires; installing earthquake and tsunami early warning and alert systems; and, of course, storm monitoring and early warning. In addition to improving the response time for emergency services and reducing the risk of these events to human life, we could use this longitudinal data to increase our understanding of underlying trends and patterns, identify preventive measures in some cases, and improve our predictive capability to provide even earlier warning.
6. Health Care In the health care sector, professionals use digitization to manage assets and medical records, keep inventory, and handle ordering and payments for all equipment and pharmaceuticals. Today, hospitals are full of smart devices that oversee these services, but few communicate with one another or take into account the importance of privacy protection and security in direct patient care. Blockchain-enabled IoT can use emerging applications to link these services. Applications in development include monitoring and disease management (e.g., smart pills, wearable devices to track vital signs and provide feedback) and improved quality control. Imagine an artificial hip or knee that monitors itself, sends anonymized performance data to the manufacturer for design improvements, and communicates with a patient’s physician, “Time to replace me.” Technicians will be unable to use specialized equipment if they haven’t taken prerequisite steps to ensure their reliability and accuracy. New smart drugs could track themselves in clinical trials and present evidence of their effectiveness and side effects without risk of modified results.
7. Financial Services and Insurance Financial institutions could use smart devices and the IoT to tag their claims on physical assets, making them trackable and traceable. Because digital currencies enable the storage and transfer of value rapidly and securely for all users large and small, they also enable risk assessment and management. Thinking further, could the poor and disadvantaged earn small amounts of cash, or perhaps electricity or other “credits,” if they allowed their limited assets to be tagged and shared as in the earlier microgrid example? Owners will be able to tag priceless objects, antiquities, jewelry, the stuff of museums, anything ever handled by Sotheby’s and insured by Lloyd’s. Insurers could adjust payment according to where the object is and its environment—if it’s in New York’s Metropolitan Museum of Art under controlled climate, then a lower insurance rate; if traveling to Greece, then charge a higher rate. The object could tell whether it was in a vault or around a celebrity’s neck. Insurance rates could be higher if the device was hanging on Lindsay Lohan’s neck versus, say, Anne Hathaway’s. Driverless cars would surely have lower insurance rates, and devices themselves could settle insurance claims on the spot based on sensor data.
8. Document and Other Record Keeping As we have explained, physical assets can become digital assets. All documentation relating to a particular “thing” can be digitized and carried on the blockchain including patents, ownership, warranties, inspection certification, provenance, insurance, replacement dates, approvals, et cetera, significantly increasing data availability and integrity, reducing paperwork handling, storage, and loss, and other process improvements related to that documentation. For example, a vehicle will not start if it failed a recent safety inspection, if its liability insurance has expired, if its owner has failed to pay parking tickets or moving violations, or if the driver’s license of the person attempting to drive it has been suspended. Items on the shelves will notify store managers when they’ve passed their “sell by” date. Store managers might even program these items to lower their own price as the sell-by date approaches.
9. Building and Property Management An estimated 65 percent of the twelve billion square feet of commercial real estate in the United States is vacant.22 Digital sensors can create marketplaces of these real estate assets by enabling real-time discovery, usability, and payment. Vendors are now entering this field and developing new service models to rent the space in off hours. In the evenings, your conference room can moonlight as a classroom for neighborhood youth or an office for a local start-up. Other applications will include security and access control, lighting, heating, cooling, and waste and water management. The greenest of buildings will run on the Ledger of Things. Imagine the data on elevator usage and flow of people through the building, how these will inform an architect’s design of public and private spaces. Spare residential space can list itself and negotiate through the Ledger of Everything to help tourists, students, managers of homeless shelter programs, and others find space that meets their needs. These ideas apply to all types of residential, hotel, office, factory, retail/wholesale, and institutional real estate.
11. Home Management Feeling lonely? You can always talk to your house. Your own home and numerous products and services are entering the market to allow automated and remote home monitoring. These services go beyond the “nanny cam” to include access controls, temperature adjustments, lighting, and, eventually, just about everything else in your home. While “smart homes” have been relatively slow to take off, companies such as Apple, Samsung, and Google are working to simplify installation and operations. According to BCC Research, “The U.S. home automation market is estimated to go from almost $6.9 billion in 2014 to $10.3 billion in 2019 . . . the growth will be steady and long-term.”23
12. Retail Operations and Sales Walking down the street, your mobile device advises you that the dress you love is available at the Gap. Walk into the store and the dress, in your size, is waiting for you. After trying it on, you scan it and the payment is complete. But you’ve got other things to do, so the dress finds its way to your house before you get home. In addition to operational efficiencies and environmental monitoring, retailers will be able to personalize products and services to identifiable customers as they walk or drive by based on their location, demographics, known interests, and purchasing history, provided that those customers opened their black boxes to retailers on the blockchain.
Tapscott, Don. Blockchain Revolution (pp. 156-161). Penguin Publishing Group. Kindle Edition.
