How Blockchain Can Completely Change Four Major Industries

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On May 8, Alibaba Cloud held the Blockchain as a Service (BaaS) commercialization conference. During this conference, Alibaba Cloud stated that their current BaaS model only serves as a platform infrastructure, but they are eager to collaborate with more ecosystem partners to create new vertical solutions.

The blockchain technology supports a distributed ledger that is tamper resistant and ensures the transparency and sharing of information. This technology in turn greatly reduces the cost of building point-to-point trust and consensus between business activities. Zeng Ming, chairman of the academic committee of Alibaba Group, mentioned during the conference that blockchain can provide underlying technical support for mesh collaboration, which may in fact be the most important factor for innovation and value creation for the next decade.

The commercialization conference provided an in-depth analysis of four typical business scenarios, which are: supply chain finance, commodity tracing, and medical care, and industrial Internet solutions.

Supply Chain Finance Backed by Blockchain

Today, from the initial steps of provisioning raw materials all the way to the final steps of product manufacturing, the supply chains of most commodities involve several small- and medium-sized enterprises (SMEs) both upstream and downstream. These enterprises all are under much pressure to unlock the operating capital of the supply chain system. Supply chain finance can be understood as the systematic financing arrangements that banks and other financial institutions provide for all member enterprises of the supply chain to form a mutually-beneficial landscape for core buyers and suppliers. This action can allow buyers to optimize operating capital while also allowing suppliers to generate additional operating cash flows, thus minimizing risk for the entire supply chain.

The traditional supply chain finance system isn’t perfect, with the following issues often popping up. First is the issue of poor communication and credibility, which in turn results in low efficiency. Next are the issues of inconvenient bill circulation, slow contract settlements, and frequent capital risks. And Last, non-transferred credit and difficult financing are also major hurtles enterprises operating along the supply chain often face.

On the other side of this, blockchain can provide a solution to all of these hurtles. First, blockchain allows core enterprises, multi-level suppliers, and financial institutions to share transaction data, receivables, and payables, and protects business privacy, thus improving overall communication, credibility, and efficiency. Next, blockchain enables the transfer of corporate creditors’ rights and automatic fund settlement to accelerate enterprise payment and repayment, which can remedy the issues of slow circulation of capital and processing of contracts. Last, blockchain allows core enterprises to transfer their payment commitments and credit between multi-level suppliers and financial institutions, thus easing past hurtles.

The supply chain finance solution jointly launched by Alibaba Cloud BaaS and its partners links purchase, sale, production, and delivery information between core enterprises and suppliers in real time. Blockchain depicts the trade background and smart contracts to guarantee a closed capital loop. Suppliers can release the financing demands on the supply chain finance platform based on their accounts, which are receivable, to speed up capital turnover and reduce procurement costs. Next, a connected data system automatically completes the confirmation and approval procedures, which simplifies the transaction process, reduces transaction taxes, and improves profitability.

For physical asset financing, the supply chain finance solution combines blockchain and Internet of Things (IoT) technologies to trace the circulation process, most especially the warehousing information. The solution also informs customers of possible exceptions and cargo risks in a timely manner. After asset holders initiate financing requests on the platform, financial institutions can provide them with financing services based on visualized and monitorable asset and data management.

This solution can effectively improve the inventory turnover rate of enterprises, expand the sales scale, reduce financing costs, and help financial institutions identify high-quality assets and control the fund placement process.

Commodity Tracing Powered by Blockchain

In the field of commodity tracing, Alibaba Cloud combines blockchain and Internet of Things (IoT) technologies to trace the entire commodity circulation process. This prevents unscrupulous traders from using information asymmetries in the commodity chain to manufacture counterfeit goods. This also prevents participants from tampering with data or falsely claiming information loss to minimize the impact of unfavorable situations, resulting in difficulties in evidence collection and accountability. Blockchain tracing connects the information silos of different links in the supply chain and improves the efficiency of supply chain collaboration.

Alibaba Cloud and Ant Blockchain work with Alipay and Tmall to implement a cross-border product tracing platform. The credibility tracing of commodities is implemented through the global standardized archives for merchants and goods and a commodity identification system. Consider data collection as an example, the dual-band and full-protocol RFID PDA works with the blockchain hardware encryption module to automatically collect information during the product activation, packing, warehousing, customs clearance, and selling phases, and directly upload the collected information to blockchain in a synchronous and real-time manner. The entire process uses hardware and blockchain to ensure that data sources are tamper-resistant and trusted.

Blockchain Revolutionizing Medical Services

The medical solution of blockchain jointly developed by Alibaba Cloud and Alipay has been officially applied to an electronic prescription transfer system created for Wuhan Central Hospital. Based on Alibaba Cloud BaaS and the Ant Blockchain services of Alipay, this solution connects various pieces of a typical hospital visit, including prescription, prescription review by pharmacists, drug distribution, drug payment, and process supervision. Blockchain-based distributed storage and the accurate matching of information on the chain with patients ensure the efficacy of one-time prescription-based dispensing, prevent prescription modification or abuse, as well as facilitate supervision. In the future, patient information, prescription information, and drug circulation information will be encrypted and desensitized through blockchain technology to develop more medical application scenarios.

ShenTaiWang.com, major medical service specializing in kidney health in China and a major customer of Alibaba Cloud BaaS, is deeply engaged in the field of chronic kidney diseases based on a vertical service platform that connects multiple parties in the Internet-based medical ecosystem. It applies blockchain technology to order tracing, medical case marking, medical staff identification, and commitment evidence storage.

A series of procedures can be further optimized, such as online medical inquiry, compliance management, lifestyle supervision, complication indicator monitoring, follow-up management, and online prescription.

Blockchain and Industrial IoT Integrated

At the 5th World Internet Conference, the supET Industrial Internet platform that integrates IoT and blockchain was the only award-winning Industrial Internet platform selected as one of the world’s leading Internet technology achievements. The IoT-based blockchain solution of Alibaba Cloud provides industrial device authentication, product quality tracing, and supply chain management services for supET projects. In addition to supET, Alibaba Cloud has launched other Industrial Internet platforms jointly with its partners in Guangdong and Chongqing.

In terms of the Industrial IoT, IoT-enabled terminals collect various types of data and make real-time decisions based on edge gateway devices, while also connecting to the cloud and to the physical world and the digital world through blockchain technology. This complete and general-purpose industrial PaaS cloud platform supports scenario-based applications in sub-sectors such as electronic manufacturing, mechanical manufacturing, and textiles and apparel.

Alibaba Cloud also cooperates with partners in various fields to create more solutions, such as blockchain data sharing, judicial blockchain, blockchain philanthropy, and trusted digital content copyright services.

Beyond the application discussed here, blockchain also has a wide range of business application scenarios in sectors such as government, finance, industry, logistics, healthcare, retail, and Internet. Alibaba Cloud BaaS is committed to providing enterprises with next-generation inclusive and trusted infrastructure. With a focus on underlying technologies, Alibaba Cloud will work with partners to participate in ecosystem cooperation and business innovation.

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