By Michael Blumberg, President, Blumberg Advisory Group
There has been a lot of buzz lately over Bitcoin. With the tremendous volatility in the price of cryptocurrencies over the past 12 months, the emergence of new cryptocurrencies almost every day, and threats of government regulation, it’s hard not to take notice. Chances are you either think Bitcoin it is the next biggest thing since the Gold Rush or you think it’s the worlds’ biggest Ponzi scheme.
Regardless of your opinion of Bitcoin, you are probably wondering “What in the world does Bitcoin have to do with field service?” In a word, “everything”. Why? Bitcoin and crypto-currencies are based on a powerful technology called the blockchain, a decentralized and distributed digital ledger that is used to permanently record transactions across a network of computers. Each transaction is securely packaged together with other transactions in a block. The data on the blockchain cannot be altered or duplicated, and no single entity owns the blockchain since its stored in a network of computers. Furthermore, the data is both anonymous and public. Anyone can view the transactions in the blockchain while the identities of the sender and receiver remain anonymous.
Another aspect of the blockchain is a “smart contract’. This is a computer program that controls the transfer of digital currencies or digit assets between parties under certain conditions. In other words, the smart contract provides “if”, “then” instructions regarding the sequence of events or transactions that are to occur. The digital assets that are part of the transaction maybe in the form of data, video, audio file or text.
The blockchain provides an optimal platform for managing diverse types of transactions on low-cost/no-cost basis given the smart contract feature, the fact that no single entity controls the blockchain and that it is highly scalable and secure. There are also several use cases for blockchain technology in the field service Industry including but not limited to:
- Managing Smart Devices and IoT - the blockchain offers a low-cost, highly scalable, and decentralized network for managing IoT enabled assets and related transactions. The blockchain ledger provides an objective and verifiable record of what has occurred on the IoT platform making it possible for stakeholders to verify activities that occur on the network or on connected devices
- Asset Tracking - using blockchain addresses, a service provider can track all assets (e.g., sensors, devices, equipment, etc.) on the network. It provides an efficient and fast way of collecting information.
- E-Commerce - the blockchain and cryptocurrency provides an optimal mechanism for monetizing IoT related service activities (e.g., monitoring, alerts, actions, etc.).
- SLA Management - smart contracts can be used to operationalize and monetize SLAs and maintenance procedures related to specific events observed on the network.
- Spare Parts Management - the blockchain ledger provides an effective method for tracking the history and authenticity of spare parts. For example, the ledger can provide details of failure rates, refurbishment dates, and whether it’s an original/genuine part or generic/imitation part.
While the probability of Bitcoin reaching $1,000,000 anytime soon may seem like a pipe dream, it is highly likely that we will see commercial applications of blockchain and cryptocurrency applied to the field service industry within the 1-2 years. In fact, there are several start-ups and Fortune 500 companies who have invested in or developed applications for field service and related industries. For example:
- Intel earlier this year invested in Filament a provider of blockchain solutions for Internet of Things (IoT) and the enterprise. Filament’s blockchain technology is designed to facilitate data and e-commerce transactions on industrial and enterprise machines and sensors.
- IOTA, whose partners include Microsoft and PricewaterhouseCoopers, is a cryptocurrency that provides IoT participants an easy, fast and safe way to exchange, buy and trade datasets.
- IBM and Lufthansa Industry Solutions have launched the Blockchain for Aviation (BC4A) project, which concerns the use of Blockchain for reliable and transparent maintenance operations. It creates a digital ledger that allows industry participants (i.e., airlines, MRO teams, and OEMs) digital ledger that allows airlines, MRO teams and OEMs to record flight events, operations conditions and scheduled aircraft maintenance checks, and cross reference these data sets against each other.
- Engineers at GE Global Research have developed a blockchain application for the renewal energy market. It uses smart contracts to manage how much money a consumer wants to spend on electricity, how many kilowatts they want to buy, and at what price. Energy can be purchased in real-time when it is needed based on the capacity required any given time.
It remains to be seen whether cryptocurrency will replace fiat currency (cash) as the preferred medium of exchange among the world’s economies. However, blockchain technology is certainly gaining traction as a lower cost and more democratic alternative for managing transactions than centralized data networks. While I wouldn’t recommend converting your entire stock portfolio into cryptocurrency, I do suggest we keep an open mind about how blockchain technology and cryptocurrency will revolutionize field service. In a few years, it will be used everywhere around the world for field service applications in some capacity or other.