Since the introduction of Blockchain, many companies have gained confidence that it is possible to have faster and efficient workflow in cross-border trade, which can help in improving overall customer experience without compromising the safety of sensitive information.
Blockchain technology guarantees secure and standardized trade, even across borders, occurring instantaneously. Businesses have even started using digital smart contracts (a Blockchain-based contract that holds both parties accountable by only completing the terms of the agreement once both parties have fulfilled their end of the bargain) to eliminate third-party involvement in financial transactions to ease the audit process.
Sooner than later, this technology will enable organizations to abolish paper contracts, faster settlement of transactions, securing digital networks from cyber-attacks and helping them implement cost-effective solutions.
Quick Recap: What is Blockchain and how does it apply to GTM?
To recap from Part 1 in our series: Blockchain is an append-only distributed digital ledger that consists of a continuously growing chain of linked blocks, where each block contains a cryptographic hash of the previous block, a timestamp and batches of verified transactions. The blocks cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network. Using blockchain technology driven by GTM applications, a GTM blockchain can reveal previously hidden information and enable users to make informed, automated decisions related to import and export compliance as it affects all areas of international supply chains, from sourcing, to deliveries, to financials.
Roadblocks Associated with Blockchain in GTM Technology
Global Trade Management (GTM) solutions help increase financial and supply chain efficiencies, improve customer satisfaction, reduce risk of noncompliance and better control costs. However, organizations are quickly realizing that they need better “Global Trade Visibility” and proof of product integrity as human error, fraud and trafficking become more frequent.
The first fundamental feature of GTM is rooted in the complexity of governmental, industry, and trade related rules and regulations. The sheer volume of information, its analysis, and calculations required to comply and compute optimal – or even just suitable – alternatives requires significant time and hardware resources. This makes the node prohibitively expensive and is detrimental to a blockchain of any type.
The second problem lies in the nature of the regulations. Regulations change often and dissemination of these changes can pollute traffic and overwhelm storage, especially the nodes that have an infrequent need for such information.
The third problem is caused by the frequency of mandated additions, deletions and modifications. Practically every change to regulations requires an alteration of the program code. Even the most rigorous testing of the code cannot guarantee the absence of errors, which, in turn, may seriously disrupt the whole operation of a blockchain.
Now that we have addressed the potential roadblocks of Blockchain in GTM technology, stay tuned for the next installment in our blog series where we discuss the conceptual design of GTM Blockchain.
