LETTERS: The year 2022 is predicted to be a sensational year for blockchain technology because it is a key driver to improve supply chain operational excellence across multiple industries.
Blockchain is a popular topic in the business domain, empowered by cryptocurrency technology.
Electric car manufacturer Tesla Inc bought bitcoin worth US$1.5 billion. Citizens in Miami, Florida, the United States, are permitted to pay their taxes with bitcoin.
Bitcoin and blockchain-based distributed frameworks have brought change to several areas, including in the supply chain, operations and financial domains.
For instance, the Ethereum smart contract technology has made it possible for businesses to run automatically with distributed profit margins and services. (Ethereum is a technology involved in digital money, global payments and applications.)
As such, blockchain can play a critical role in the retail market to enhance the digital monetary system. This can guarantee and secure monetary transactions in the retail market.
Founder Satoshi Nakamoto in 2008 stated that "blockchain" is a system of circulated ledger that records or tracks valuable information.
Cryptocurrencies and circulated ledger systems build trust among stakeholders because blockchain works without a third-party connection. Cryptocurrency excludes central banks in the managing of transactions due to the decreasing value of money via inflation.
Implementing blockchain decreases transaction costs, which guarantees data safety by detecting corrupt operations, the supply chain of suppliers and counterfeit goods.
Blockchain is unique due to a fingerprint called "hash" at every block. "Hash" identifies all content detectable for any change executed by previous blocks.
Any new transaction is transmitted to a network across the world, where a peer-to-peer computer networking confirms the transaction. Once confirmed, the transactions are clustered into blocks and later changed to create a long history of transactions.
The transaction is now complete. The blocks are linked using cryptography or a secret code. The blocks form a chain and modification is difficult without altering each block from the start.
Blockchain is unaffected by data modification because once recorded, all subsequences are affected. The time required to make a transaction is only seconds.
Applying blockchain software can be a powerful thing.
The application of blockchain technology facilitates supply chain and operational excellence via traceability in supply chain, blockchain-based smart contracts, blockchain-based decentralised cryptocurrencies and international payment.
Several crucial elements, such as database, software application, computer connection and Internet availability, ensure flexibility and accessibility for managers.
A research survey on blockchain found that 70 per cent of professional respondents never used blockchain, while 64 per cent expected blockchain to positively affect their industry.
The advancement of blockchain technology has huge potential in future as it can generate new opportunities across industries, especially in banking, cybersecurity and intellectual property.
However, some have denied the role blockchain plays in digital money transactions. The stability of blockchain in the market and its impact on business operations are still unclear in terms of security.
Blockchain technology also faces several challenges in terms of hacking, and limited knowledge about blockchain among business owners hinders the deployment of blockchain technology.
ARIF MUSTAQIM MOHAMAD
Takaful consultant, American International Assurance (AIA)
PROFESSOR DR VEERA PANDIYAN KALIANI SUNDRAM
Faculty of Business and Management, Universiti Teknologi Mara
President, Malaysia Logistics and Supply Chain Association
PROFESSOR DR JAAFAR PYEMAN
Director, Institute of Business Excellence, Universiti Teknologi Mara
The views expressed in this article are the authors' own and do not necessarily reflect those of the New Straits Times