Dennis Spaeth, Electronic Media Editor, Cutting Tool Engineering
While blockchain technology has been making headlines in recent years, largely due to the success of Bitcoin inspiring many other cryptocurrencies, few people fully understand exactly how this unique technology works. Even though blockchain typically has been associated with the economy and financial applications, this technology can potentially have far-reaching and incredibly useful applications when utilized properly. However, it’s important to have a basic idea of what exactly blockchain is in order to fully understand the potential applications blockchain has and will have in the future within the manufacturing industry.
What Is Blockchain? How Does It Work?
Blockchain, while complicated, isn’t too difficult to understand when broken down into its most basic concepts. Blockchain technology effectively works as a digital ledger that is nearly impossible to tamper with, making it an incredibly secure way to conduct business, transactions, and more. In finance, blockchain allows users to make direct, or peer-to-peer, transactions with one another without relying on the middle man of a bank or other financial institution.
How is blockchain so secure? Blockchain technologies work by using personalized code that gets passed and built on from user to user. This block of code creates a chain between transactions that gets more complex with each additional transaction. If a hacker attempts to break into this immutable digital ledger by modifying one block of code, the entire chain is broken, meaning that none of the code works. Because of the complexity and uniqueness of each block of code, blockchain technology is incredibly secure and nearly impossible to hack.
How Does Blockchain Work In Manufacturing?
Blockchain becomes useful in manufacturing when it comes specifically to issues of security and trade secret protection. One of the most valuable commodities that exists today is data and information, largely because the modern age is such a highly technical one. Almost all important manufacturing information is digitally stored, meaning that under the right circumstances, it can be vulnerable to hacking. This means that individuals, or even competitors, with the right skills are potentially able to access your manufacturing data and recreate counterfeit products or components.
However, using blockchain can help prevent this potential security risk. By making use of blockchain technology, manufacturers everywhere are better able to encrypt crucial information and secure their trade secrets. Rather than leaving the instructions to creating specific components vulnerable, manufacturers are working on integrating blockchain into code for certain machines, keeping that information out of the wrong hands. This makes manufacturing more secure than ever before and protects companies’ sensitive information more easily.
The Future Of The Industry
As blockchain becomes a more common element of industries everywhere, it’s important to remember that this technology is still new and growing. Blockchain, while secure, is still not fully understood, and its implications have the potential to be incredibly far reaching. For now, however, blockchain will continue to be used as a means of securing digital information and transactions; how this will impact the future of the manufacturing industry and other major industries remains to be seen.
About the Author: Dennis Spaeth, Electronic Media Editor at Cutting Tool Engineering, holds a bachelor’s degree in journalism from Northern Illinois University. Including nearly 9 years at CTE, Dennis has more than 30 years of daily newspaper and trade journalism experience.