NFTs: ERC-721

NFT's & Supply Chains

What are NFTs?

Tokens that can be identified by unique characteristics, often a representation of a specified asset, are an example of non-fungible tokens (NFTs). NFTs are often implemented to represent real-world assets - such as real estate shares, gold, or art - which can be transferred over the network and between owners, with payment if required, making the transaction’s occurrence immutable, and mitigating lengthy transfer processes.

Generally, multiple entities are participants in the complete manufacturing supply chain of a product. That said, the same mechanism of changing ownership of NFTs between counterparties and attaching data to the NFT in question as it moves through the supply chain can be utilised in more complex supply chain operations. While blockchain facilitates the technology required to track products progressing through the supply chain, manufacturers may require internal tracking for the NFT representation of procured materials within their facilities. This empowers them to accurately document where, and in what products, the materials in question are being used.

A completed product composed of multiple different materials can be affiliated with several NFTs, each comprising a transparent and thorough history of each individual material’s passage from its first introduction into the supply chain. A token can be used to virtually represent a physical object, such as a shipment of hydrogen gas (H2). As it moves through each stage in the supply chain, valuable data points such as temperature, geolocation, and ownership can be captured and published on the blockchain. These data can be classified using the following fields:

Smart contract functions and mechanisms can be developed for business-specific purposes. In this case, the recording of environmental and transactional data will be used to improve the information efficiency of market participants, ultimately improving economic efficiency.

By taking advantage of blockchain technology to track NFTs, retrieval of these data becomes decentralised, permitting any of the supply chain’s contributing parties to own and refer to these data. If the network members decide to make specific data publicly accessible, environmentally concerned consumers can examine the blockchain and follow the product’s chain of custody, tracing its path through the supply chain.