One of the most popular topics in recent years has been blockchain technology. Blockchain has influenced several industries and also promoted other innovations such as cryptocurrency or the Non-Fungible Tokens (NFTs).
Blockchain is a technology that enables the secure sharing of information. Data is stored in a database. Transactions are recorded in an account book called a ledger. A blockchain is a type of distributed database or ledger—one of today’s top tech trends—which means the power to update a blockchain is distributed between the nodes, or participants, of a public or private computer network. This is known as distributed ledger technology, or DLT. Nodes are incentivized with digital tokens or currency to make updates to blockchains.
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- Decentralization: Networks created with this technology are distributed among all its participants. This means thatno participant could hack these networks.
- Integrity: Blockchain networks’ participants have the right to make decisions, due to its P2P, or peer-to-peer, nature.
- Cryptography: One of the most important characteristics of this is its high level of security and authenticity to the user.
- Security: As a distributed network, no person can damage the entire chain. The damage because of any user hack of the password is limited to this single user.
- Inclusive: Anyone can participate as an independent without any discrimination in the global economy.
- Privacy: Its strong cryptography ensures users’ privacy, and it will never be revealed in a transaction using the blockchain P2P network.
- Cryptocurrency: Its best-known application due to Bitcoin, among others. They do not depend on other entities, as current banks do, so cryptocurrency decentralizes and secures financial transactions.
- Smart contracts: These types of contracts are integrated into this networks and are executed automatically when different accorded conditions are met.
- Supply chain: Blockchain upgrades traceability, transparency, and efficiency of the data collected, and optimization. It localizes every data in a small amount of time, simplifying many procedures from the supply chain.
- Online voting: Its objective is to upgrade the security, transparency, and confidence of the electoral procedures because the blockchain cannot be modified.
- Identity management: Every information collected with blockchain will be on it, so it does not matter the platform, the user will get more control over his information.
As this article about circular economy shows, one of the most important targets is to reduce waste production and pollution, giving new life to old materials to minimize their environmental footprint. Traceability is very important for the circular economy, so the blockchain can be used to track materials through their supply chain to reuse, upcycle, or recycle them according to their condition. Data is where the circular economy and this new technology meet. There are no industries, including the textile and fashion industry, that do not require data to increase their performance and reduce their impact on the environment, so blockchain and other technologies that collect, store, and secure protecting users’ privacy, are going to be on the focus for many years to come.
However, there are several future challenges to implementing blockchain systems properly in supply chains. This technology creates networks and, to create a valuable network, companies need to collaborate among them. The fashion industry is one of the most agnostic industries to develop these systems of open data.
It is possible to guess which advantages will interest businesses in blockchain technology. Transparency and security lead to the most attractive benefits this technology uses for companies but, there is more to know about it.
This technology will also save time and cost for those companies that will introduce it into their processes. Digitalization and automatization are also involved in this technology. One example would be that transaction time can be reduced from 10 days to just 4 hours.
Another advantage of blockchain technology is related to trust. As it is not centralized, transactions made between different parts will not depend on one, both will have the same power in the transaction.
It is also important to tell that, as blockchain technology has recently landed, the innovation on it opens a huge number of opportunities for companies to take advantage of it. Be aware of the latest news about this technology and be able to implement it before your competitors can make a difference in the market.
The future of our society is every day more oriented to circularity and better coexistence with the environment, so the circular economy is embracing new technologies to make this transition to a more sustainable business models more effective and profitable. During the last few years, one of the most popular technologies has been the blockchain, and circularity has taken advantage of their characteristics and applications to reduce waste and societies’ climate footprint.
Discover more about how blockchain technology is helping the circular economy in this former Recovo Asset.
Recovo creates circular solutions for the fashion industry. We cover various aspects of the circular economy for brands:
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