Bitcoin recovered from elimination, first billionaires already announced and subsequently blockchain technology has come back at the forefront. Mostly known as a distributed ledger of digital transactions, it promises to reduce the need for third parties, upsetting bankers through its destructive strength. Imagine this technology along with its applications replacing maritime transactions via paper documents with a secure online mechanism. What if instead of transferring back and forth documents, all business documents were shared? It’s dead ahead! Bitcoin’s rise happened overnight, showing that blockchain is finally here to give power to the common man. But, which is the feasibility of adopting such technology into shipping and logistics? Is it all about the technology, or just about interfaces?
Indeed, this brand new, modern technology is not owned by an individual or an organization. Within the maritime industry it has already made the transaction process decentralized and eventually easy to track. Decentralizing the process of banking removes middlemen, thus reducing the cost of transactions allowing parties to save both time and money. There is no need of inputting paper booking information and Bill of Lading. Transaction parties can now be directly connected and proceed in real-time exchanges of supply chain documents and transactions, while Certificate of Origin and customs clearance information can be shared securely. In addition, in countries such as Pakistan, Sudan, Qatar, Russia and Yemen which usually fall victims to several sanctions against their governments, bitcoin along with blockchain technology may help the way they deal with bank restrictions.
Ukrainian shipping company Varamar announced that accepts bitcoin the same period that cryptocurrency hit a new high of $11,826.76, according to the news. Thus, the internet of money, has been officially “welcomed onboard”. Maersk, Hapag Lloyd, Evergreen, CMA CGM and Zim agreements with online commercial platforms also serve to explain how blockchain technology would disrupt shipping. For instance, Hyundai Merchant Marine’s (HMM) first pilot voyage conducted by a blockchain consortium, from Korea to China, with reefer containers from August 24 to September 4, 2017, proves that by adopting blockchain technology, shipping & logistic companies can securely share information and reduce paperwork as well. Moreover, a blockchain platform, built on Microsoft Azure global cloud technology – the first of its kind in the insurance industry – is planned to be implemented from 2018 onwards. As a result shipping market eyes the value in cryptocurrency and gets set for taking off over the next years.
However, even though shipping industry is embracing blockchain technology, most operators are talking about corruption issues and believe that it is far from proving its viability in commercial transactions that may involve authentication, or financial and privacy data protection. At the other end of the spectrum, advocates of this recent technology area answer that through public-key cryptography and the transformation of digital currencies to cryptocurrencies, data, now, have stronger security reducing fraud and error risk.
Certainly, bitcoin is already being used as the means of payment and a mass adoption of blockchain has begun to occur in almost every industry without “neglecting” maritime. Some operators may be afraid to adopt the aforesaid technology but there are millions of ways in which blockchain can revolutionize the way we do business in any form.