On session three of the second day of the Bitcoin Masterclasses, which happened in May 2023 in London, Dr Craig S. Wright (Technical Advisor at nChain) continued on the previous topic of Electronic Data Interchange (EDI). The session had the title ‘EDI and How It Evolved and Can Be Structured to Deliver Superior Logistics and Supply-Chain Results’.
The session initially followed on from the previous session before moving on to the topic of improving logistics and supply-chain results. Dr Wright highlighted the challenges in international shipping documentation, proposed leveraging technologies like databases and UTXOs for streamlined processes, and emphasised the importance of preserving document integrity and human oversight in mitigating security breaches and fraud.
A brief overview of EDI in international shipping
Electronic Data Interchange (EDI) is a standardised protocol for data formatting that enhances communication efficiency between businesses, minimising the risk of human error in the process.
Before the advent of EDI, it was common practice to manually extract data from one system, transcribe it onto paper or spreadsheets, dispatch it to the appropriate recipient, and then manually input it into the recipient’s system. This approach not only consumed significant time but also faced challenges due to human errors.
The workshop commenced with an overview of international shipping documentation and the challenges associated with its accuracy and efficiency. Wright highlighted the variety of documents required for international shipping, such as bills of lading, with standard fields like product codes, weight, size, and declared value. These fields, though not fully automated, can be entered into databases.
Wright proposed leveraging technologies such as databases, Unspent Transaction Outputs (UTXOs), and Lightweight Directory Access Protocol (LDAP) servers to streamline processes and enhance traceability.
How EDI could be structured with BSV
Wright proposed using unique identifiers like UTXOs to ensure the uniqueness of document numbers, rather than relying on sequential numbering prone to duplication.
He emphasised the need for information like the shipper’s name and address, suggesting that the transaction ID itself can serve as a unique identifier. He advocated for the integration of Public Key Infrastructure (PKI) to facilitate automation while addressing potential privacy concerns through cryptographic techniques.
A key concept introduced by Wright was the implementation of a two-phase approach in Bitcoin transactions, enabling seamless collaboration and verification between parties. This concept, coupled with the integration of XML data and smart contracts, promises unprecedented levels of automation and accuracy in shipping documentation.
Furthermore, Wright emphasised the complementary role of Internet of Things (IoT) devices in monitoring and the necessity of arbitration clauses to mitigate contingencies and disputes. He cautioned against the overreliance on automated processes, advocating for human oversight in decision-making.
Enhanced security measures and fraud prevention strategies
During the workshop, Wright also discussed compromised company certificates and effective solutions for preventing or rectifying such incidents. He advocated for the adoption of digital signatures reminiscent of Non-Fungible Tokens (NFTs) to validate documents like bills of exchange, streamlining the update and re-signing procedures.
In addressing the urgency of responding to security breaches, Dr Wright drew attention to the case of Diginotar, illustrating the need for quick issuance of new certificates and acknowledging the ensuing inconvenience in reissuing documents like bills of exchange. Dr Wright contrasted the decentralised nature of these processes with the inefficiencies of past centralised systems that allowed breaches to remain unnoticed for long periods.
Furthermore, Wright articulated the pivotal role of preserving document integrity in supply chain management, including but not limited to bills of lading, purchase orders, and invoices. He stressed the necessity for creating unique and verifiable records to combat fraud effectively. Proposing the integration of these records into a transparent chain of transactions, Dr Wright advocated for streamlining the complexities inherent in handling goods.