What Does Blockchain & The Fourth Industrial Revolution Mean for Us?
The magic wand of blockchain technology has touched our lives in multiple ways over the last decade. It has made cryptocurrency traders out of ordinary investors who would even shy away from the traditional stock
markets. It has provided us with an easy way of transferring money across borders, without the interference of banks.
On a larger scale, blockchain has provided enterprises with a trustless and tamper-proof apparatus for tracking assets, verifying identity, settling contracts, and so much more. New industries based on asset tokenization and decentralized finance (DeFi) have been created on the strength of blockchain technology. Experts have even started to believe
that blockchain will very well end up being the harbinger of Internet 3.0
. All these parts add up to a much bigger sum – the role that blockchain technology will play in the 4th Industrial Revolution, or Industry 4.0.
Industrial Revolutions – a look back at History
Industrial processes have seen a steady progress over the course of humanity, but there have been certain periods of concentrated innovation and invention which have significantly accelerated the development of modern human civilizations. Our history is dotted with 4 such Industrial
The 1st Industrial Revolution
happened in the late 18th century, when water and steam powered machines were developed. These helped factory workers increase their efficiency and reduce production time of goods. The highlight of this period is the Watt steam engine
, introduced by James Watt
in 1776. Scale small businesses, which served only a handful of customers, could now tend to a much larger customer base.
Industry 1.0 was the catalyst to the beginning of new industrial practices, which focused equally on quality, efficiency and scale.
The 2nd Industrial Revolution
, which occurred in the beginning of the 20th century, saw the steam-driven machines being replaced by their electric counterparts. These were much more efficient to operate and maintain, both in terms of cost and effort, as compared to steam-based machines. Soon came the assembly line
, which further streamlined the mass production of goods.
Various production management techniques, such as division of labor and lean manufacturing principles, were adopted during this period, leading to improved quality and industrial throughput.
Towards the end of the 20th century, the breakthroughs in the field of electronics spurred the 3rd Industrial Revolution. The invention of integrated circuits
marks the beginning of this period. Machines became substantially smaller, faster, accurate and cheaper. Integration of electronics hardware into manufacturing systems also led to the development of software systems. Embedded software made it possible to automate various industrial processes and streamline management processes. Even today, the automation processes and software systems are continuously evolving.
The world's first Integrated Circuit
The 4th Industrial Revolution, or Industry 4.0, has already begun. The
exponential growth of the Internet in the 1990s started revolutionizing the way we exchanged information with each other. This sowed the seeds of Industry 4.0.
It is not so much a completely new technology or manufacturing structure; rather, it is the trend of utilizing a massive amount of available information to streamline processes, and the integration of automation in the development of new technologies.
Industry 4.0 is characterized by smart technology and smart appliances, which are bringing us closer to a fully digitized world. Modern technologies like Internet of Things (IoT), Machine Learning (ML) and Artificial Intelligence (AI) are being used to digitally enhance our homes and factories, turning them into ‘smart’ entities. Standards of cyber-security are being enhanced, as these smart homes and factories are more prone to remote hacking.
Conceptual drawing of a smart home
Cyber-Physical Systems (CPS), which are systems tightly controlled by computer-based algorithms, are being used to share and analyze data, and guide the decisions taken by machines to make them smarter. These smart machines can continuously monitor, detect and predict faults in manufacturing processes, suggest preventive measures and even take remedial action, lowering the downtime for production.
Industry 4.0 uses IoT and CPS-based sensors to collect vast amounts of data, which is analyzed by manufacturers to improve their work. Recent advancements in big data and analytics platforms allow systems to process huge datasets and produce meaningful results that can be acted upon quickly.
Using a combination of AI and ML algorithms, industrial processes and machines are able to complete complex tasks much more efficiently at a much lower cost, providing a vastly superior quality of goods and services.
The Role of Blockchain in Industry 4.0
Industry 4.0 strives for greater amounts of automation in our everyday life. Smart contracts
, which are the building blocks of decentralized applications (DApps), can be used to achieve a similar end goal. 3rd party information sources called oracles
enable smart contracts to access off-chain data, and trigger their execution when a certain predefined condition is satisfied. By interacting with real world data, smart contracts can significantly reduce human intervention in a plethora of applications. For example, a smart contract which can access the airport’s flight schedule and the current time can be used to settle insurance claims automatically in case of flight delays.
Blockchain can make IoT applications more robust and secure.
Data collected by IoT-based sensors
can be transmitted through a blockchain-based tamper-proof ledger. The use of encryption algorithms ensure that information remains secure, while the decentralized nature of the network eliminates single points of failure. Blockchain is already being used for asset tracking applications in various industries. By employing blockchain together with IoT, manufacturers will be able to streamline how they aggregate, store and share data with partners across the supply chain.
IoT sensors collect data from a variety of sources
Blockchain can also be used to accelerate the growth of other emerging technologies, such as big data analytics and AI.
The idle computing power and resources of personal mobiles and laptops can be connected through blockchain technology, and used to process massive amounts of data seamlessly. Moreover, the decentralized nature of blockchain networks is much more secure than centralized structures when it comes to a field as sensitive as human-machine interaction. Furthermore, the data security that blockchain offers is and added advantage for both these industries.
While blockchain will most likely play a complementary role, it is critical
for the holistic development of Industry 4.0. A study
by KPMG suggests
that the global value of component markets of Industry 4.0 will cross $4
trillion by the end of 2020.
Add to that the research conducted by Gartner, which predicts that the business value-add of blockchain will grow to $176 billion by 2025 and exceed $3.1 trillion by 2030, and we can get a fair idea of how important blockchain technology will be in the near future.
Germany & Industrie 4.0
Germany has been quite the forerunner when it comes to the implementation of Industry 4.0. The term ‘Industrie 4.0‘ was first proposed
in the 2011 edition of Hannover Messe (more on that later). This was followed by a German government report in 2013 outlining a plan to almost fully computerize the manufacturing industry. The concept
grabbed global attention when Chancellor Angela Merkel
spoke glowingly of Industry 4.0
in January 2015, at the World Economic Forum in Davos, referring
to it as the way to "deal quickly with the fusion of the online world and the world of industrial production."
As for the Hannover Messe, it is arguably the world’s largest industrial fair. The first edition was organized in 1947, in the aftermath of World War II, in an effort to reinvigorate a war-torn dwindling German economy. Today, it has grown to become the one of the foremost global platforms where participants showcase the latest technological advancements in various fields.
A glimpse of Hannover Messe 2019
Hannover Messe 2020
will focus on emerging technologies which are the building blocks of Industry 4.0, such as Blockchain, AI, IoT, ML, 3D Printing and Advanced Robotics. Every year, a partner nation is chosen, and the technical developments of that nation are highlighted. Last year it was Sweden, and for the 2020 edition, it is Indonesia.
The Indonesian delegation this year will include 2 blockchain representatives – Tokoin and LedgerNow.
, founded in 2018, is using blockchain technology to accelerate the growth of the MSME (Medium, Small & Micro Enterprises) sector in South-East Asia and other emerging markets. By creating an Ethereum based digital identity database where reputation scores of these enterprises can be established, Tokoin is bridging the gap between the banking sector and the MSME sector.
, established in 2017, is helping enterprises in ASEAN countries and China to build their own blockchain networks and integrate their business processes. LedgerNow focuses on the smart contract, asset management and digital identity aspects, to help the partner enterprises create ledger-based ecosystems securely and efficiently.
The last edition of Hannover Messe had attracted more than 250,000 visitors from over 90 countries. This year, the turnaround is expected
to be even higher. There are still some misgivings about blockchain technology amongst the general public, thanks in no small measure to the high volatility associated with the price of crypto assets.
Hannover Messe will provide a wonderful platform to educate people about how blockchain is so much more than just Bitcoin and trading. It will also provide a global stage for blockchain technology to showcase not just its existing achievements, but also how important it is to the prosperity of Industry 4.0.
Subscribe to get your daily round-up of top tech stories!