10/11/2021
𝐏𝐚𝐲𝐢𝐧𝐠 𝐰𝐢𝐭𝐡 𝐁𝐢𝐭𝐜𝐨𝐢𝐧
In 2018 Procurement is beginning to experiment with the use of virtual currencies (or cryptocurrencies) such as . is a which could benefit the procurement function because of its trans-border potential. At the current time this is a new concept and is being explored within the industry.
In some, but not all countries, Bitcoin is seen as legal tender but the value does fluctuate considerably more than standard currencies, often by significant amounts, as, in 2018, none of the cryprocurrencies are tied to a major currency or standard, and the value is therefore dictated by those trading in it. Until cryptocurrencies stabilise in value, it is unlikely that their use will become widespread.
is one of the by-products of the cryptocurrency Bitcoin. Blockchain was originally developed to ensure that each digital Bitcoin was unique, and could not be copied like most digital assets. It consists of a chain of blocks of data encrypted together to form a record of each Bitcoin. A new block
is created after each transaction and is attached to the previous blocks using encryption, creating a unique 'history'.
This technology is being adapted to other assets, with the ultimate ambition of building a detailed digital audit trail of every item in a supply chain. Smart contracts - computer programmes that enforce conditions built into them - can be used with this technology to fulfil a contract without human intervention. The technology is still in its infancy (Blockchain was first used as a term in 2016,
although the technology pre-dates the terminology). However, government legislation to safeguard, govern or protect these forms of digital transactions currently lags behind the technology, so the procurement function should consider all risks carefully before adopting these digital practices.
