Why Blockchain, and why now?
An open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way, blockchain comprises a list of records, or “blocks,” that are linked together using cryptography. By design, a blockchain is resistant to modification of the data, making the technology more reliable than traditional means of sharing data and information across business partners.
In Volkswagen’s case, the goal of the initial blockchain pilot is to work with suppliers and sub-suppliers that account for more than two-thirds of the company’s total lead starter battery requirements. A provider of open-source, public blockchain protocol that was originally designed to identify and address conflict mineral issues, Minespider says Volkswagen’s ultimate aim is to “ensure that all of its raw materials are sourced in a socially and environmentally sound manner.”
Using Minespider’s blockchain technology, for example, Volkswagen will be able to track the origin of its raw materials and present a complete chain of custody from certified mine to end manufacturer. The company uses nested encryption to ensure a company’s data remains private on a public blockchain.
Digital “Certificates” are created at certified mineral sources (i.e., mines or recyclers), which are then encrypted with the company’s public key and posted in a publicly accessible database, Minespider explained in the press release.
“As mineral shipments are sold, responsible data of the new owner is added to the certificate which is re-encrypted with the public key of the new owner, creating a layered encryption like a Russian doll,” the company states. “This ensures that only the owner is able to access the supply chain data, even though it is in a verifiable, immutable public data store, enabling supply chain transparency without sacrificing data security.”