Satoshi Nakamoto and the likely impact of blockchain on improving global supply chain efficiency has interesting parallels to Malcom Mclean who invented shipping containers.
Satoshi Nakamoto is the name used by the unknown person or people who designed bitcoin and created its original reference implementation. As part of the implementation, they also devised the first blockchain database. In the process they were the first to solve the double-spending problem for digital currency. They were active in the development of bitcoin up until December 2010.
Blockchain will be used to improve real-time trust, transaction security and contracts to vastly improve the efficiency of the global supply chain.
Benefits of Blockchain used for supply chains:
Blockchain offers shippers the following advantages:
* Enhanced Transparency. Documenting a product’s journey across the supply chain reveals its true origin and touchpoints, which increases trust and helps eliminate the bias found in today’s opaque supply chains. Manufacturers can also reduce recalls by sharing logs with OEMs and regulators.
* Greater Scalability. Virtually any number of participants, accessing from any number of touchpoints, is possible.
* Better Security. A shared, indelible ledger with codified rules could potentially eliminate the audits required by internal systems and processes.
* Increased Innovation. Opportunities abound to create new, specialized uses for the technology as a result of the decentralized architecture.
History of McLean and Containerization
Malcom McLean was a transport entrepreneur who developed the modern intermodal shipping container, which revolutionized transport and international trade in the second half of the twentieth century. Containerization led to a significant reduction in the cost of freight transportation by eliminating the need for repeated handling of individual pieces of cargo, and also improved reliability, reduced cargo theft, and cut inventory costs by shortening transit time.
In the early 1950s McLean decided to attempt use of the containers commercially. He had a trucking company.
McLean secured a bank loan for $500 million and in January 1956 bought two World War II T-2 tankers, which he converted to carry containers on and under deck. McLean oversaw the construction of wooden shelter decks, known as Mechano decking.
In 1956, most cargo was loaded and unloaded by hand by longshoremen. Hand-loading a ship cost $5.86 a ton at that time. Using containers, it cost only 16 cents a ton to load a ship, a 36-fold savings. Containerization also greatly reduced the time to load and unload ships. The volume of trading was increased and speed of trading was improved.
In April 1957, the first container ship, the Gateway City, began regular service between New York, Florida and Texas. During the summer of 1958 McLean Industries, still using the name Pan-Atlantic Steamship Corporation, inaugurated container service between the U.S. and San Juan, Puerto Rico with the vessel Fairland. The name was officially changed from Pan-Atlantic Steamship Corporation to Sea-Land Service, Inc. in April 1960. McLean’s operation was profitable by 1961 and he kept adding routes and buying bigger ships.
In 1978, McLean purchased United States Lines. He built a fleet of 4,400-TEU container ships that were the largest afloat at the time. The ships were fuel-efficient but slow, and therefore not well-adapted to compete in the subsequent period of cheap oil. USL went bankrupt in 1987.
In 1982, McLean made the Forbes 400 Richest Americans list with a net worth of $400 million, however, a few years later, having gambled on rising oil prices that failed to materialize, McLean had to file for Chapter 11 bankruptcy owing debt of $1.3 billion.
He died in 2001 and had a net worth of $300 million at that time.
A paper published in February, 2013 disentangles the impact of trade deals from that of containers. Looking at 22 industrialized countries, it finds that containerization is associated with a 320% increase in bilateral trade over the first five years and 790% over 20 years. A bilateral free-trade agreement, by contrast, boosts trade by 45% over 20 years, and membership of GATT raises it by 285%. In other words, containers have boosted globalization more than all trade agreements in the past 50 years put together.
Parallels between blockchain supply chain and containerization
Blockchain supply chain should have multi-trillion dollar impacts and containerization has had multi-trillion dollar impacts.
Both improve the efficiency, speed and scale of trading.
Both have made the inventors very rich.