But that leaves many still wondering what blockchain is or how it works.
But before we get there, a little history. The first blockchain database was created for bitcoin. A peer-to-peer electronic cash system developed by Sakoshi Nakamoto (a moniker for an as yet anonymous individual or individuals), bitcoin, like other cryptocurrencies, is vulnerable to double-spending, in which users could spend bitcoins, delete records of the transaction, and then spend the same bitcoins over again. To solve this problem, Nakamoto proposed a public, distributed ledger that would be difficult to alter once transactions had been verified — the blockchain.
How does this work? Well, stick with me, because it can get a bit technical.
As envisioned by Nakamoto, a blockchain ledger is decentralized with transactions recorded across many computers using a peer-to-peer network. This helps on a couple of fronts.
First, using a peer-to-peer network means distributing computing power and data storage over a wide network, thus letting many computers share the load. In theory, anyone with a computer and an Internet connection can participate. Second, the record stored in the blockchain cannot be changed without altering the entire blockchain and doing so requires at least 51 percent of the network to agree to the change. The peer-to-peer network autonomously manages the blockchain database and timestamps transactions.
As the name indicates, a blockchain comprises a series of data blocks, each linked to the previous data block by a series of numbers and letters that represent all the text that comes before it, known as cryptographic hash. Any alteration of the information of the data block will not match the cryptographic hash. That makes unauthorized alteration of a single block of data difficult. The benefit is that because all computers that registered the transaction have a record of the nearly unique hash sequence the database of transactions is resistant to fraud or manipulation.
For railroads, and freight carriers in general, blockchain technology offers some enticing advantages. First and foremost, fast and accurate record keeping where everyone involved in the transaction has the same information generated from a single source. According to its website, BiTA officials say the technology can free up capital, reduce transaction costs, expedite processing, and increase security with fewer chances for error.
Hard as it is may be to believe, certain international intermodal shipments are still governed by paper documents that need to be mailed between shipping companies and presented by truckers to intermodal ramp managers before making final deliveries. To make matters worse, mistakes in those types of documents often have to be corrected at origin and re-sent says Trains Technology Editor Steve Sweeney.
The current system is also open to corruption and abuse, for instance, anywhere bribes can be made to distribute cargo without complete paperwork or fulfilled contract terms, such as a letter of credit from a local bank.
Blockchain shipping documents would permit shippers, railroads, truckers, airlines, banks, and customs officials to read and understand the extent and context of a transaction quickly and make preparations or corrections before the cargo ever arrives at its destination.
Shipping documents are only a beginning for blockchain’s potential in railroading. With radio frequency tracking devices — or future variations — every move a shipment takes on a railroad, from loading to local switching, yard switching, long-distance hauling, and delivery could be recorded as separate transactions or steps in a transaction, Sweeney says. He says this permanent record could inform the railroad and shippers about crew handling, weather disturbances, equipment performance, and locomotive reliability. The same goes for maintenance-of-way record keeping and locomotive and freight car inspections — with every ballast tamping and turn-of-a-wrench digitized and recorded for posterity.
Blockchain remains an emerging technology and implementing the technology even at just the railroad level would require industry-wide reformation replete with standardization reaching deep into company operations.
“People in the blockchain space don’t know a … thing about supply chain, and people in the supply chain don’t know a … thing about blockchain,” said Redwood Logistics CIO Eric Rempel at Distributed 2018 this past July. “There is so much intellectual property on both sides that has yet to mesh. We’re still embryonic here.”
BNSF Railway and the blockchain alliance did not respond to requests for comment. A CN representative declined to comment.
Thoughts on Blockchain by a Nobel economist … https://www.nytimes.com/2018/07/31/opinion/transaction-costs-and-tethers-why-im-a-crypto-skeptic.html
Very good piece. So when does the unabridged story with before and after examples appear in Trains?
There has to be a better fine line than this between enjoying railroading and this type of information. Trains Magazine has such a text book feel to it nowadays that I let my 30 years of subscriptions lapse. And with that, to my surprise, my access to most Newswire articles and commenting!
Some of the comments here remind me of the stories told about people who were scared silly at the sight of that smoke belching monster known as the iron horse.
The basic concept is simple. Implementation is the difficult part – kind of like merging railroads of different guages so the product, in this case information, can flow freely over the system.
One of the areas I’m interested in is using the blockchain for smart contracts around transfer of responsibility of assets such as containers or chassis and freight ownership either en route or at transload facilities.
Anywhere there’s a potential for dispute or for improved asset utilization through near instantaneous contractual agreement which might mean not having to funnel an asset through a central location or waypoint can be a win for reduced cost and improved service.
I have been curious about how railroads operate for as long as I can remember. I want to do more than just watch trains and take pictures, I want to understand the how and why behind the train that is in front of me. Articles like this help me do that. I say, keep it coming.
This article I’ll file under “no need to know any more about this”.
Pardon my abysmal ignorance, but what language is this article written in? Guess it’s time to get my wooden club and go hunting in the woods for dinner.
Mr. Narita has it correct, with respect to tablets. Gotten a traffic ticket lately? That written on a tablet and produced as a printed document, makes it a whole lot easier to see when you’re supposed to be in court than when some officer scribbles it in an unknown script! I believe the AMTRAK conductor on the train I was riding yesterday may have been using something similar. He for sure, was scanning those funny-looking square symbols on the tickets with a hand-held device.
I’m almost 71 and found this interesting. I’ve often thought the railroad was the first web and all those locomotives and cars were just like the packets traveling on the Internet. They don’t call the hardware routers and switches for nothing. What this seems to be about is a new way to view and use all those packets and the data in them. Was it about my beloved NYC in steam? No. But, it seems to be about the future and who knows what some Trains readers will object to in 50 years.
It’s actually pretty simple really, as blockchain becomes more prevalent and railroads become part of that blockchain information that railfans currently are able to obtain relatively easily will no longer be obtainable, unless you’re part of the blockchain, that is why it is relevant to Trains readers(as well as the fact as they advertise themselves as a magazine of the railroad industry).
Charles Landey – This all would have been fine in “FIFO, THE Magazine Of Accounts Payable,” or somesuch, but it numbs me here. So I said my piece, and everyone else said their piece, and God Bless America.
Well, I know more a whole lot more than I did 10 minutes ago, having read this article and then looked up Blockchain Technology on Wikipedia. A blockchain seems to be a system of widely distributing documents or data that cannot be altered or forged by the various people in receipt or custody thereof. I recall reading that lawyers like to FAX stuff around the country (1970’s technology) because something sent in Microsoft Word or equivalent (1990’s technology) can be altered by anybody or everybody who has Microsoft Word or equivalent on his/ her computer, which is everybody. Blockchain gets around that. While I have no idea how this works, it surely meets a need.
I’m an older dude (b1955). But I’ve always been interested in where the business and operational side converge (“service design”). Also freight railroads were one of the first big users of digital computing going back the the era in which I was born.
I’d also point out that Trains has always had articles on these topics, going back to the controversial John Kneiling, (PE) whose work I didn’t understand most of as a younger man when published, but now see the value of (if perhaps his vision is still a Bridge Too Far in its radical departure from even current practice,
Even now I very much appreciate (for example) Roy Blanchard’s articles on short line business and operational evolution even though those may take a few rereads to fully comprehend.
Conductors will be using tablets instead of paper. And they will have on their tablets a lot more info about their trains and cargo(or passengers). It means when a train is assembled or broken apart at yards the details will stay with the cargo electronically instead of on paper. Think about how much easier it will be on the clerks trying to figure out where a boxcar is supposed to go. Use an RFID scanner to us the container then look up the car to see where it is supposed to go.
Misrouted car? Send it from Selkirk yard to Gentily yard via North Platte?,
(or worse)
I have a foot in each camp–on one hand, I miss Form 19 train orders, cabooses, and manual interlocking towers, but on the other hand I recognize that the railroad industry’s renewed vitality is due in large measure to having caught up at long last with 20th-century business and industry practices. If it hadn’t been for that, Trains would have no modern railroad industry to report on and would be strictly a nostalgic, historical magazine just as if it were about river steamboats. I am grateful that the magazine and the website look forward, helping those of us who are interested to keep somewhat up to date, as well as backward to revisit Lucius Beebe’s “fragrant memories” of the storied past.
Mr. Cohen. – Be advised that we have indoor plumbing and are not luddites. Mr. Norton – I think a great many people who are older subscribers feel as you do. The industry is not what it was before mergers into six class-ones, Amtrak, endless intermodals, and fine distinctions between diesel types that I, for one, find to be an excellent sleep-inducer. Ditto this Newswire article. Probably the “base” of the magazine’s subscribers is changing as those with memories die off, and the magazine struggles to be relevant and retain a base with an industry that has gone from vibrantly individual to corporate grayness. This ability to adapt to changing forces bodes well for the future of the industry, but not for the magazine. I used to read it cover-to-cover in one sitting, the day it arrived. I still read it, but it occupies the nightstand for a week or so before I am finished.