IoT Enabled Blockchain and Machine Learning and its Possibilities in Supply Chain Management.

Original article can be found here (source): Deep Learning on Medium

IoT Enabled Blockchain and Machine Learning and its Possibilities in Supply Chain Management.


The development of new technologies like Distributed Ledger/Blockchain and IoT has the potential to solve the problems in tracking and provenance challenges.

IoT enabled Blockchain to enable secure tracking of certifications and other important information in supply chains in a secured and shared Hyper-ledger which is transparent, tamper-proof, and distributed across multiple computers that are running by consensus i.e., with trust and reliability.

Blockchain technology allows recording every event or transaction within a supply chain or distributed ledger. This ledger is shared among all the participants not owned by any and records events and transactions in a secure, immutable, and irrevocable ways.

Technically, a blockchain is a digital distributed transaction ledger that is stored and maintained on multiple systems belonging to the multiple entities sharing identical information. This creates a web that shares the responsibility of storing, maintaining, and more importantly validating the information present on the blockchain with the help of proof of work concept.

The authorized participant can review entries and users can update information stored on the blockchain only if the network consensus algorithm validates it. Information on the blockchain can never be deleted and serves as a verifiable and accurate record of every transaction made within the ledger.

The blockchain presents a new approach which utilizes the peer to peer network computing that will provide reliability and security by providing the platform for all the parties that are involved in the supply chain to be able to keep an audit on the ongoing process by being a part of the blockchain Hyper-ledger of the physical good in terms of what it is, the quality, the quantity and the current ownership of the product (whose it is at any moment).

The blockchain can be generalized and can be used to implement a random set of rules that neither the system nor the operators can break.

This approach does not need any specific behavior on behalf of the party members; instead, the underlying technology ensures the integrity of the system even in the face of weaknesses i.e., dishonesty and inherent biasing.

The blockchain technology works on the following key features:

  • Localization: The whole supply chain generates a lot of data that can be stored on the decentralized system i.e., the blockchain which will be determined by consensus which is the defined convention of executing and administering the business logic that will be enforced via automated smart contracts (e.g. it gives a real-time picture of how the product is moving from one point to another point across the supply chain without being tampered with till the distributor).
  • The localization/decentralization will enable the different parties to see the real-time movements and the changes in the peer to peer network that will be done in the supply chain simultaneously in real-time. This will create a transparent system and will eliminate the weaknesses in the system. With Blockchain, the involved parties would share the data between themselves and this would create a constant understanding of where the goods and services are exchanging hands.
  • Digital Security: One of the biggest challenges is to provide the right kind of data to the blockchain because many attacks that exist that directly target hardware itself, which in this case would be Crypto-anchors, RFID’s, NFC’s and IoT enabled sensors and small devices consisting of transistors for generating real-time data and sending it to the blockchain for auditing the supply chain. With Blockchain, the security methods for providing the data to the system are different: as it does not matter who or where the user is because all the information provided to the blockchain is accepted only if it is authenticated and authorized properly.
  • Authentication process: The authentication is provided in an unforgeable digital signature which is a cryptographic mechanism that in a manner can be compared to a physical signature but effectively more secure and allows someone to prove their identity without allowing someone else to impersonate. This authentication process does not care about what your job is in the supply chain or what may be your capabilities, as you cannot simply interact with the supply chain until you provide the digital key required for interacting that you own. (e.g., unless you cryptographically prove the ownership of the account, there is no other way for you or anybody else to update the balance).
  • The elevated privilege levels of the employees are eliminated entirely, and the weakest link in the form of operators and IT administrators are reduced significantly.
  • Audit-ability: The Blockchain will enable the supply chain to become fully audit-able and recordable. Each individual operation or interaction, such as recording the outgoing and ingoing of the stock will be simultaneously recorded and archived due to the constant live data feed fetched from the sensors fitted in the packages and the containers and will be sent to the cloud. This will allow the company to replay the operations of the past in order to build a correct model of the present and to build the blockchain network again to see where can be the problems in the Supply Chain and identify the culprit.

The Blockchain eliminates the need for a central organization that operates and maintains this system. Using blockchains as a shared and secure platform, it will not only be able to imitate the real-time situation in assigning the materials for a given product under the ownership of the final customer but will also be able to overcome the limitations of current systems by allowing to reliably audit all transactions and the processes which mean to inspect the chain of custody from the raw materials to end sale to the customer.

By depending on decentralized Hyper-ledger i.e., blockchain the parties involved can be sure that all the transfers of ownership were explicitly authenticated by their corresponding controllers without having to trust the behaviors of the employee responsible for the processes in the supply chain. The interested parties may also audit the production and manufacturing in real-time.

Another problem with the supply chain is to keep the account of all the containers, carriers, goods, and services present in the truck using the live camera feed by using the machine learning algorithms and computer vision technologies which will again minimize the human effort.

Furthermore, deep learning and computer vision can conduct constant autonomous audits onsite for tracking inventory and assets.

For every product, provenance is an essential feature of what the customer buys, even if it is as intangible or a difficult-to-verify quality. Tagging all the products to their digital counterparts would establish the link between the digital and the real world. The products will be labeled with a unique cryptographic QR code and NFC (Near Field Communication) tags that link to the provenance of the material, ingredient, or product to the physical Item.

The below-mentioned technologies are those by which the physical goods and materials will be identified and linked with their digital representation on the blockchain using a secure hash function. (e.g. Serial Numbers, 2D bar codes such as the Microsoft Tags that instantly links the devices to product inventory, digital tags like RFID’s and NFC, genetic tags) are crucial in uniquely identifying the product with its digital counterpart in the blockchain.

  • Microscopic electronic devices
  • New Generation of barcodes that can be read with Mobile Phones.
  • Genetic markers for agricultural produce.
  • The new generation of tags such as Hitachi’s sand grain-size- micro-chip can be used. These tags can be used and embedded in the products that are made up of paper and plastics making the product’s provenance data part of the material itself.
  • The DNA-laced-Ink can address the product counterfeiting at every step of the Blockchain.
  • RFID’s (Radio frequency identification tags) for inventory management and for other purposes.
  • Crypto-Anchors will help to eliminate product fraud. These are the miniaturized cryptographic anchors. These will help monitor, analyze, communicate, and even act on the data. The crypto-anchors will be used with the blockchain Hyper-ledger technology to ensure an object’s authenticity from its point of origin to when it reaches the hands of the customer. This small-sized device has an embedded security code that can be used to authenticate a product with a cryptographically secure tamper-proof signature. The crypto-anchor will be combined with an optical sensor and artificial intelligence to keep track of the DNA sequences.

The Supply chain can be tracked by using these above-mentioned tags in two ways. It can store data directly, and will also be able to update as the items move through the Supply Chain exchanging hands.

The Tags will hold a unique identifier acting as a pointer to a vast amount of web-based supporting data explaining the product details. This will ensure the provenance or the origin and will build consensus between the suppliers, distributors, and finally the retailers.

The data will be accessed by the customer using the mobile devices using the Internet of Things, gathering provenance information not only about the category but about the specific product also.

The end-user or any party can use the application to track every transaction along a supply chain on the blockchain because it is being fully audit-able. By Inspecting the blockchain, smartphone application will be able to collect and display the supply chain in an efficiently made UI consisting of information in a real-time manner. The final application will shed some light on the supply chain digitally which can promote better purchases.

For every company, there is some information that needs to be private and anonymous. The information that’s given to consumers along the supply chain will also depend on the privacy permissions granted by the user of the system. With the concept of Proof-of-Work even if the identity of the producer is not revealed the retailer will still be able to feel secure that the verified information is trustful.

The producer would be able to securely document the raw material in the blockchain and transferring the key information about raw material. This method will again ensure the proof of work and build consensus across the supply chain network.

The above-mentioned solution to keep the track of the provenance of the product is very cost-efficient as it eliminates the need for the “handling companies” to be audited. This also drastically reduces the double-spending because it is an interoperable platform. The record that will be shared across the supply chain network will be fully audit-able and can be inspected at any time by companies, standard organizations, regulators, and customers for full transparency.

The blockchain also is very fast to set up and use. The ledger would be accessed by all and every party involved. The blockchain will include all the tracking purchase orders, receipts, shipment notifications, and other trade-related documents. This will finally create a permanent history of the purchase, recording the time, size, quantity, and the transfer of assets as they move.

The tamper-proof digital fingerprints embedded into products in the form of the above-mentioned technologies can extend the blockchain to the physical world.

The components for the IoT:

  • Things: The objects attached to the devices that will behave autonomously.
  • Sensors or beacons: These are the devices that will take the measurements and behaviors such as speed, acceleration, temperature, humidity, lights, sound, etc.
  • Sensors and things: Sensors create data that is sent. These will be attached to the containers and the trucks that take the shipment. (e.g., The microscopic electronic devices will be attached to the container to identify the provenance and when it goes out of the gate it detects the container and sends a signal over the network that the container has left the building).
  • Networks: The network layer will be the connectivity layer that communicates data from the sensors and connects them to the Internet. This will help to transfer the data from the sensors to the blockchain network.