Viewpoint | From community trust to algorithmic trust, blockchain leads the logistics revolution in credit

Author: peak phase (exchange of logistics information sharing technology and application National Engineering Laboratory)

【Author's Note】 Under the epidemic, many flaws in the disclosure of social information and data sharing have disappointed the public, and the construction of a trusted system based on blockchain technology will once again be on the agenda. In the face of sudden disasters, ensuring the integrity, reliability and real-time nature of emergency logistics data is a huge challenge. Blockchain technology, with its traceability, tamper resistance, sharing, transparency, and distributed characteristics, provides the possibility of building a credible emergency logistics system between the three parties of material receipt and charity. This article discusses the evolution of the business model of the express delivery industry from the social credit mechanism changes brought about by technological progress, in order to provide some ideas for building a credible emergency logistics system based on blockchain. This article was first published in the first issue of "Express" magazine in 2020. The title: "People" is not as good as "chains".

A few days ago, the leaders of the central government emphasized on blockchain as an important breakthrough in independent innovation of core technology during group learning, and accelerated the development of blockchain technology and industrial innovation. Blockchain technology is regarded as one of the representative achievements of the fourth industrial revolution, and is "the core technology with the most potential to trigger the fifth round of disruptive revolutionary waves." Therefore, how to seize the commanding heights of blockchain technology innovation is becoming one of the primary problems faced by more and more enterprises and scientific research institutions, including express logistics, in promoting industrial transformation and upgrading.

1. Generation of blockchain and trust reconstruction

In 2008, the US subprime mortgage crisis broke out and eventually triggered the global financial crisis. The economic collapse revealed a trust scam on Wall Street that involved large-scale account manipulation. By manipulating the accounting methods and means of the company's ledger, bankers remove some debts from the ledger when the financial reporting season arrives, maintaining the company's high valuation. After the account book manipulation was exposed, people's long-established trust collapsed. This kind of trust crisis immediately shifted from the economy to the social and political level, which triggered a full-scale trust crisis.

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Out of distrust of the Western financial system, Satoshi Nakamoto published the article "Bitcoin White Paper: A Peer-to-Peer Electronic Cash System" in 2008 to design a prototype of the digital cash system, Bitcoin, in an attempt Re-establish a trust relationship based on technology. The system uses cryptography, time stamping, distributed ledgers, and consensus mechanism design to shape the security, distribution, and traceability of the blockchain. It attempts to solve the trust and large-scale collaboration between strangers from a technical perspective. problem.

In the era of "community trust", traditional society takes acquaintance communities as the basic unit. Its trust relationship is mainly based on the personality trust of interpersonal relationships within a small range, and the maintenance of its collective trust relies on the so-called psychological book, which is the common memory of people. Therefore, the scale of traditional society is generally small, and it is difficult to form a large-scale collaboration system.

In the era of "currency trust", with the development of society, the development of trade and the birth of cities, large-scale collaboration between strangers began to appear in human society. At this time, currency-based system trust has become necessary for human society. Currency trust relies on double-entry bookkeeping, and banks become socially centralized credit providers. However, the Lehman Brothers case of manipulating the ledger in 2008 made the public realize that the accounting work of the modern financial industry is so complicated and the cost of doing evil is very low.

In order to solve the drawbacks of easy tampering of the double-entry bookkeeping method, with the promotion of Satoshi Nakamoto and his successors, we will enter the era of "algorithmic trust". The distributed ledger and other technologies brought by the blockchain technology have become a mechanism for avoiding malicious tampering of the ledger and reconstructing the social trust mechanism between strangers, so that multi-party participants can conduct secure trust transactions without intermediaries. Especially in the field of logistics that requires multiple parties to participate in collaboration, blockchain is expected to reduce transaction costs and optimize business models, and has huge application potential.

2. The origin and innovation of Chinese private express trust

China's private express delivery originated from the customs declaration business. Since Deng Xiaoping's southern talk in 1992, the import and export trade in Jiangsu, Zhejiang and Shanghai has soared, which has greatly stimulated the demand of foreign trade companies for the rapid delivery of customs declarations and other small packages. The explorers of Tonglu discovered the business opportunities, established outlets in large cities such as Hangzhou, Shanghai, and Ningbo, and let family members be responsible for operations, forming the earliest private express trust network based on geography and kinship.

With the innovation of the "join system" model, this trusted network quickly spread from Jiangsu, Zhejiang and Shanghai to the whole country. Since the establishment of Taobao in 2003, China's e-commerce industry has grown rapidly. Chinese private express entrepreneurs seized this historical opportunity, and their main business immediately shifted from customs and other corporate items to "Taobao items" and other e-commerce express items. Due to the change in the scope of delivery, the express network needs to expand from Jiangsu, Zhejiang and Shanghai to the whole country, so the "joint system" model came into being. Tonglu-based entrepreneurs adopted the franchise model for rapid expansion by imitating the "rural land contract responsibility system". In order to meet the growing volume of express delivery business and attracted by the huge profits brought by the express delivery industry, many Tonglu people have joined the "joint system" network due to their kinship and geography, forming the "tongda" of China's express logistics industry. system".

In the process of the development of express delivery enterprises of the “Mastery Department”, the “community trust” network composed of geographical and kinship chains promoted the delivery of express networks throughout the country. Through help, financing, shared supply chain, etc., the headquarters and franchisees and franchisees have formed good cooperation, so that the "Tongda Department" continues to develop and grow. The courier company grants franchisees regional franchise rights and actively surrenders "trust", thereby narrowing the boundaries of the enterprise and turning internal management issues into market trading issues. This organizational model gives up the consistency of services and solves the three major problems of flexible production capacity, localized adaptation, and assessment and control. As the center of the trust network, the headquarters will grant its own trademarks, patents and proprietary technologies, etc. to franchisees as trust nodes in the form of franchise contracts, allowing franchisees to operate in specific areas under the unified business model according to the contract Engage in business activities and pay the corresponding expenses.

3. From "community trust" to "algorithm trust"

However, behind the glorious achievements created by China's private express logistics industry, we should also see that the "community trust" based on kinship and geography reveals many shortcomings in maintaining the good operation of the huge express network. When the "community trust" system is applied to a large-scale social collaboration, many systems are hindered from operating, and it is impossible to achieve "system personnel, system management", nor to ensure the safety, efficiency, and reliability of logistics information data.

For example, there are differences in the service quality of franchisees. Since each franchisee is relatively independently responsible for the operation and management of franchise stores, it is difficult to guarantee the service standards and quality of each express terminal. Inadequate supervision will hurt consumers' service experience. At present, a series of credit problems such as information falsification, leakage of user data, and lack of compensation mechanisms are also plagued the industry.

Based on the “algorithm trust” of the blockchain, with distributed ledger, encryption calculation, peer-to-peer transmission and other technologies, it will ensure that the data cannot be tampered with and traceable, and is expected to solve the trust problem in the environment of detrusting strangers.

Logistic participants such as franchisees, headquarters, and customers can use blockchain technology to conduct secure transactions without intermediaries, thereby promoting the integration of logistics, business flow, information flow, and capital flow. The characteristics of the blockchain will bring revolutionary breakthroughs to the problems of information leakage, information silos, information falsification, and complicated cross-border e-commerce settlement procedures that are widespread in the express logistics industry, thus making the business model and trust mechanism commonly used throughout the industry Get remodeled. China's express logistics industry needs to transition from "geographic trust" based on geography and kinship to "algorithmic trust" based on computer science and mathematics, in order to reduce the interference caused by human intervention on account books, data, and transactions, so that express logistics can truly enter into " The era of intelligent logistics.

4. Revolution from "head" to "foot"

Express logistics information fraud has always been a problem that plagues consumers. By building a product anti-counterfeiting and traceability management system, it is possible to effectively track the flow of goods and prevent false logistics records. Through the technology of timestamp, distributed storage and asymmetric encryption, the blockchain can form an immutable record of all aspects of the production and circulation of commodities, and technically ensure that the data is true, effective and unique. E-commerce operators and final consumers can effectively prevent illegal and false logistics records through the comparison of full-link logistics information, so as to achieve the function of tracing the source and anti-counterfeiting of goods.

The efficiency of warehousing is directly related to the safety and effectiveness of express logistics goods. The use of blockchain technology and the effective combination of RFID, GPS, sensors, barcodes and other technologies for intelligent management of express logistics warehousing can achieve effective real-time monitoring of warehouse outgoing and warehoused goods, thereby reducing the need to find, identify, and track goods Labor costs, time costs. Through the blockchain system, freight management personnel can track the information of the locker and the transportation status of the goods, and can intercept them when there is a problem batch of goods. Shippers can connect exclusive containers based on distributed ledger technology, and track and query the warehousing information of goods through mobile devices. In short, the full use of blockchain technology in the warehousing process can not only increase the transparency of the entire process, but also ensure that warehousing operators can store and transport goods in a safe and trusted environment.

In the field of cross-border e-commerce logistics, the blockchain system abandons cross-border transit financial institutions and attempts to use tokens as a medium to complete transactions during the flow of funds. In the cross-border settlement, blockchain technology has established a decentralized trust relationship for producers, logistics providers, consumers, e-commerce platforms and other subjects, and formed a real-time and effective settlement system. On the other hand, the non-tamperable characteristics of blockchain information ensure the authenticity and effectiveness of product information and logistics information, and also realize the traceability of information and shared by multiple parties. E-commerce customers can verify the authenticity of online shopping products through logistics tracing; customs can use logistics tracing to identify smuggled and fake cross-border goods; banks can use logistics tracing to confirm the authenticity of the identity of the credit main; enterprises can also use logistics tracing To improve the level of cross-border e-commerce logistics management.

5. Conclusion

Today, we are already at the cusp of a new revolution, because blockchain technology will fundamentally trigger and drive a new round of change-the credit revolution, so that the credit of the physical space is reflected in the information space.

The achievement of China's private express logistics represented by the "Mastery Department" lies in the innovation of the "joint system" model. Through the "community trust", the franchise system helps the express delivery industry to complete the rapid expansion of the logistics network with the asset-light model in the geographical and close acquaintance relationship, thus occupying the market share. The blockchain technology is expected to solve the existing bottleneck problem in the near future through the "algorithm trust" revolution and push the development of the industry to the next climax.

After years of development, blockchain applications have extended from the underlying technology applied to the Bitcoin system to many areas including logistics. This new technology is an opportunity and a challenge for all sectors of society, because to make good use of this new technology, it is necessary to innovate from the underlying technology and equipment, make breakthroughs in application scenarios, and also require the coordination of the government and all sectors of society stand by. The National Engineering Laboratory for Logistics Information Interoperability and Sharing Technology and the Nanjing University of Posts and Telecommunications have published the book "Blockchain Technology Reshapes the Future Logistics Business Model", which aims to popularize and promote blockchain knowledge for the society and call on government departments, Research institutions and benchmarking companies work together to further promote the application of blockchain in the field of logistics, and build an efficient, transparent, collaborative, professional, high-trust, and low-cost logistics system.

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