You are the CEO of a manufacturing company that relies on an intricate global logistics operation, and have recently pioneered the use of a new blockchain infrastructure that can record the transfer of goods within your assembly line from juncture to juncture.
You’ve acknowledged the recent moves of Nestle and Walmart in directing their supply chains towards the blockchain, while taking heed of advice from your Chief of Operations who has long advocated for the incorporation of Distributed Ledger Technology (DLT) in your platform. It’s a novel approach, allowing you to create a decentralized ledger of information that can be updated in real time by your employees — from the truck driver transporting your goods to the retailers who are selling them.
As a believer in blockchain’s potential to address current inefficiencies within the supply chain space, you want the technology to deliver new levels of traceability to logistics processes that have been hindered by paper-based solutions. You’ve come to understand how blockchain’s distributed ledger enables immutable records of transactions, improved transparency, reduced costs while mitigating the risk of fraud along the supply chain. What’s not to like? While this implementation sounds wholly beneficial, you would also like to keep the amount of products manufactured in your factory hidden from the other manufacturers using the same blockchain network – meaning an extra privacy layer is needed to protect trade secrets and other sensitive business information.
In 2019, companies can’t settle for a situation in which every detail of their product’s lifecycle is traceable by their competitors. Unfortunately, this is a reality facing many companies who are actively experimenting with blockchain systems. Without an added layer of privacy, there is little that even the most diligent company can do to prevent their records from being exposed in this manner. Following a year defined by a series of large-scale hacks, impacting millions of users, the urgency for companies to be more diligent with how they protect their networks has never been more pronounced. The onus is now very much on the enterprise community to explore the advanced privacy technologies that are now becoming more prominent in the market, providing an additional layer of security to decentralized ledgers.
The supply chain landscape has been heralded as fertile ground for new technological innovations to take hold, but 78% of companies are missing out on growth opportunities according to a recent report by Accenture. The report suggests that the other 22% of companies are investing in supply chain and operations intelligence while developing a strong collaboration culture internally and externally. During this time of heightened scrutiny around how major corporations share user data, enterprises are naturally cautious about engaging in collaborative initiatives involving the transfer of sensitive information. This trepidation around how to manage the transparency vs privacy dilemma means companies that rely on supply chains could be missing out on mutually beneficial and profitable collaborations. However, Zero-knowledge proof (ZKP) cryptography is now blurring the lines in the transparency and privacy venn diagram.
ZKP technology has been embraced by the likes of EY and ING, while also being widely recognized among data privacy experts as a highly robust privacy tool that is extremely effective in a distributed ledger environment. By adding an overarching privacy layer to existing blockchain ledgers, ZKPs can equip companies, both large and small, with the tools necessary to properly secure sensitive user data and proprietary business information. ZKP cryptography enables one party to ‘prove’ the authenticity of data to another party without revealing the underlying data itself. A breakthrough innovation like ZKP calls for a focused effort to ensure the resilience of the cryptography. This is why QEDIT works closely with the global ZKProof.org initiative — which brings together figures from industry and academia – geared towards standardizing the usage of zero-knowledge proof cryptography.
With the blockchain logistics market projected to reach close to $10 billion by 2025, the stakes couldn’t be higher for companies to gear themselves with the latest innovations in cryptography to enable transactions between parties that don’t reveal the confidential details in the process. As such, the enterprise ZKP undercurrent has arrived at the right time. Now companies no longer need to compromise on data-driven collaborations with other parties in order to reserve the privacy of sensitive data. ZKPs give them the best of both worlds while addressing this long-standing dilemma for manufacturers and logistics operators.
About the Author
Jonathan Rouach, CEO and Co-Founder of QEDIT, an enterprise solution for preserving data privacy using Zero-Knowledge Proofs. Technion Electrical Eng. , Army Intel. Founder of Bits of Gold, largest Bitcoin exchange in Israel, and of a security company acquired by Digital Asset Holding.
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