Secure at Sea: Use of blockchain on the rise in yachting

Dec 18, 2018 by Corey D. Ranslem

Secure@Sea: by Corey Ranslem

The mainstream popularity of crypto-currencies like Bitcoin has exploded in the past couple of years. News coverage on the currencies and their wild movements is covered daily via business news and now mainstream media. There are several trading organizations worldwide where you can trade Bitcoin and other crypto-currencies. There are companies within the large-yacht industry accepting Bitcoin payments for sizeable transactions.

The technology developed to track Bitcoin transactions, called Blockchain, could have far greater implications within the maritime industry.   Blockchain is an interesting technology that is used to organize Bitcoin transactions in a distributed ledger. Blockchain is now getting almost as much media coverage as Bitcoin. There are some very interesting potential uses for Blockchain in the maritime industry and, specifically, the large-yacht industry.

But first, some background on the technology. Blockchain technology was developed to manage Bitcoin transactions in a distributed format where the information within the individual “blocks” could not be altered by either party in the transaction.

The information within the Blockchain is open and viewable to each party involved within the specific transaction. If new information is needed for the transaction, a new “block” is created that depends completely on the previous block. It is a great way to build a potentially immutable transaction ledger.

IBM created one of the initial platforms, called Hyperledger, to build and expand Blockchain-related software programs. Hyperledger currently has five basic frameworks for building Blockchain-related software applications. Hyperledger now resides with the Linux Foundation and is completely open source. Developers from around the world work on various Blockchain-related projects and issues through Hyperledger so issues can be identified earlier with much better solutions than if one single company or organization held the technology.

Blockchain is extremely useful to help organize, track and eventually reconcile complex business transactions that involve multiple parties. The technology is already being used within the cargo portion of the maritime industry. A substantial joint venture partnership started in December 2017 between Danish shipping giant Maersk and IBM.

Both companies came together before the partnership to determine if there was viability to use Blockchain in the maritime industry by conducting an experiment. They tracked the movement of a container of flowers from Mombasa, Kenya, to Rotterdam using Blockchain. The experiment was successful in proving a use for Blockchain in the maritime industry.

Oracle has also started a Blockchain joint venture with several large cargo companies that represent a third of the world’s shipping capacity.

There are several potential uses of this technology within the large yacht segment of the industry. U.S. Customs and Border Protection is testing the use of Blockchain technology to track shipments, along with verifying the certificates of origins for companies that are part of different shipping regimes. As CBP presses forward with this test, it could also potentially use the technology to track various transactions, including the clearance of people coming into the U.S.

Another potential use within our industry would be to track onboard maintenance. A block would be created for that vessel, so anytime maintenance was performed on a specific system, it  would be recorded within that ledger. That way each company/organization/individual would always be able to see what was completed and the time frame. This would help yachts be more efficient in tracking their onboard maintenance.

As you think about your onboard operations and the various items that you track, or interactions with outside vendors, you could start to see several transactions for Blockchain technology.

There are several organizations and companies looking at Blockchain as a solution to complex and/or multi-company transactions. Many governments around the world are already using Blockchain in a variety of ways, which could include assisting with immigration and customs enforcement.

Corey Ranslem, CEO at International Maritime Security Associates (www.imsa.global), has more than 24 years of combined Coast Guard and maritime industry experience. Comments are welcome below.

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