FedEx exec: Blockchain will become a foundational layer – for everything

While blockchain may never be a panacea for solving all business transaction problems, it will eventually become a foundational technology across industries that will lead to new business models.

Before that can happen, however, proprietary blockchains will have to run their course and be replaced by open software and industry standards that enable distributed ledgers to communicate across competing businesses and borders, according to Dale Chrystie, a FedEx business fellow and blockchain strategist.

“Some years from now, I think it’s a foundational layer under everything,” Chrystie said during the Enterprise Blockchain Summit here this week. “Twenty year ago, you put the word ‘internet’ in front of everything and now you don’t. Today, we’re putting the word ‘blockchain’ in front of everything and I don’t think we’re going to in the future; it’s just going to be the way it works.”

Essentially, blockchain can be an open, transparent electronic ledger able to remove the middleman – a central bank or a corporate supply chain database – and that will fundamentally change the way businesses transact, Chrystie said.

Combined with artificial intelligence and IoT sensors, a blockchain tracking system can accurately trace the origins of products and verify the authenticity of everything from produce to plane parts.

While a small number of businesses will manage to implement proprietary blockchains and achieve some semblance of business-to-business transactional efficiency on their own “toll road,” only an open-source ledger based on industry standards will get broad adoption, Chrystie argued.

“We believe it’s going to take a global village to build this; We think the future of this is open source and we think once that’s built out, all kinds of people will be able to add value on top of that,” Chrystie said. “I’ve got a Samsung phone that’s built on an Android open-source platform and you can put apps on it and do all kinds of things from that point of view.”

Since 2017, $18 billion has been invested in blockchain, either in venture capital funding of start-ups, initial coin offerings and corporate implementations of the distributed ledger technology, according to Kyle Ellicott, chief labs officer for research firm ReadWrite Labs.

Just over 550 companies are involved in blockchain, from hedge funds to accelerators, incubators, consortium groups and media. More than 275 companies offer blockchain platforms, whether onsite or in the cloud cloud, and there are 20 different blockchain working groups or consortiums. Enterprises are moving beyond pilots and collaborations and rolling out the technology to enable not only the tracking of goods but to allow customers to purchase products with blockchain-based digital currencies.

“In Q2 more than 50 companies are moving forward with blockchain technology into customer-facing applications. This is not a slow trend. This is growing very rapidly,” Ellicott said, rattling off a list of companies that includes Accenture, Apple, Bank of America, JP Morgan Chase, Mastercard and Samsung.

Last month, for example, Starbucks, Nordstrom and Whole Foods – along with more than a dozen other retailers, announced pilot programs to accept bitcoin or Flexacoin, an Ethereum-based ERC-20 token, for payment. Enabled by payments start-up Flexa, a customer merely waves a QR code on their smartphone in front of a register scanner and payment is transferred to the retailer. The QR code, enabled by an app, represents digital currency in a customer’s cryptocurrency wallet.

“This is not just something to brush off. Enterprises are starting to move beyond collaboration and adoption. [They’re] looking to implement this technology in some way,” Ellicott said. “Bank of America put more than 100 [blockchain] patents on the ground, but they’re not talking about they were doing with it. That’s a continued trend.