The End of Trust? The Advent of Blockchain in Manufacturing

Blockchain network is a “trustless” system because of the peer-to-peer ledger.

For most people, August 6, 1991, was just another uneventful day in an uneventful week. Few understood the enormous changes that would result from the debut of the World Wide Web as a publicly available service on the internet that day. Those that did were able to amass huge fortunes. But on that day more people were interested in the Pan Am games where Debbie Doom, an American softball pitcher had struck out 17 batters to pitch a perfect game, defeating Nicaragua 8-0.

Over the next two decades, the internet would change the way we do things in ways that were unimaginable only a few years before. Business, finance, and entertainment were all profoundly affected by this new wave of technology. Email, online banking, and information search engines had inserted themselves into everyday life, and nothing would ever be the same again.

In 2008 the next big thing arrived when Satoshi Nakamoto published his white paper on Bitcoin. This new “cryptocurrency” was designed as a peer to peer electronic payment system which could operate without a central authority controlling it. This was a novel and elegant solution to many of the problems presented by modern fiat currencies. However, the most game-changing technology presented by Nakamoto’s white paper was not Bitcoin itself, but rather the platform it rested on.


The heart of the blockchain is a simple ledger. What gives it power is that a blockchain ledger is maintained across several computers in a peer-to-peer network. Any potential change to the block must be verified by all of the nodes in the network before being added to the official record. A blockchain network is a “trustless” system, meaning that trust is not required since the block does not rely on any third parties for its operation.

Blockchain promises to be a major innovation rivaling the internet in its impact on society. Governments, financial institutions, supply chains, engineering and manufacturing are all expected to feel the direct effects of this new technology. It is closer than you think. A recent report by IBM reveals that 62% of automotive executives believe that blockchain will be a disruptive force in the automotive industry within the next three years.

MOBI was announced at the Future Blockchain Summit in Dubai. Image credit: Jamie Burke‏

MOBI was announced at the Future Blockchain Summit in Dubai. Image credit: Jamie Burke‏

On May 2, 2018, a new transport industry organization was formed with the goal of bringing blockchain innovators and manufacturers together. Members of this group include Ford, GM, BMW and others representing over 70% of global vehicle production. This new group, the Mobility Open Blockchain Initiative (MOBI) has been tasked with the following projects:

  • Vehicle identity, history, and data tracking
  • Supply chain tracking, transparency, and efficiency
  • Autonomous machine and vehicle payments
  • Secure mobile commerce
  • Data markets for autonomous and human driving
  • Car sharing and ride-hailing
  • Usage-based mobility pricing and payments for vehicles, insurance, energy, congestion, pollution, and infrastructure

Blockchain Innovation Curve

Diagram of the innovation curve. We are still early in the implementation of blockchain.

Diagram of the innovation curve. We are still early in the implementation of blockchain.

We are still very early in the Blockchain innovation cycle. New buzz phrases are entering the lexicon such as “information friction points” and “automotive ecosystem.” Phrases such as “disruptive force” are also being bandied about although no one seems able to describe how disruptive these “forces” will be or where they will be applied.  Hard evidence is in short supply.

How Will Blockchain Affect Manufacturing?

In manufacturing, it seems likely that the introduction of blockchain technology to supply chain management will greatly affect vehicle production processes. Automotive builders are already tracking vehicles through assembly operations to match doors,  decklids and other parts to the correct model in each station, but the explosion of data that blockchain promises to supply could overload present systems.

There are thousands of parts required to assemble an automobile. Blockchain will give manufacturers the ability to track these parts from ‘birth’ to installation on the car and beyond. In the event of failure, parts can be traced back to the machine that produced them and even the date and time of day they were produced.

Blockchain could also change the requirements on Programmable Logic Controllers. PLC’s may initially be tasked with reading and writing data to these blockchains, and ultimately could become full-blown blockchain nodes themselves.

Changes on the factory floor will drive changes in design offices as well. Could the trustless nature of blockchain inspire new ways of programming machine motions and safety circuits? Can blockchain technology surpass spreadsheets and database programs as design tools in a modern engineering office? Will blockchain force engineers and designers into unfamiliar territory? We won’t need to wait long to find out.  

Ready or not, blockchain can and will bludgeon its way into our lives in ways that we cannot imagine. It is already starting. Daimler AG has announced  the launch of MobiCoin, a blockchain-based rewards program for eco-friendly driving. The project will use telemetric data from vehicles to reward drivers for  safe driving. MobiCoins can be redeemed for tickets to events such as the Mercedes Cup. Imagine that—a system that rewards good behavior rather than punishing bad!

For further reading on blockchain in engineering applications, check out Blockchain: A Tool for Enhancing Smart Manufacturing