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).

What is the Blockchain?

Blockchain definition

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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Blockchain characteristics

- 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.

Blockchain applications

- 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.

Blockchain and circular economy

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.

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