The Future of Manufacturing: How Web3 is Changing the Game
Published on : Saturday 04-02-2023
The future of industrial automation will certainly involve Web3, and the time to start exploring it is now, says Vikas Dhawan.
Web3 and its associated technologies have the potential to transform the way we think about industrial automation. In fact, the application of Web3 in the manufacturing industry is ushering in what is being called the Second Wave of Digital Transformation (DT).
The waves of transformation
The First Wave of DT started with the sourcing of information, digitally connecting humans through social media, and the creation of digital business models. It went on to develop remote working and remote collaboration technologies and introduced the automation of small manual tasks.
For most of this century, the First Wave has caused intense discomfort about the misuse of personally identifiable data, privacy breaches, data tampering, the creation of the content bubble, the monopolistic practices of giant social media companies, unethical algorithmic marketing practices, the invasive surveillance of user activity online, as well as the manipulation of public opinion through disinformation (a la the Cambridge Analytica scandal).
The Second Wave – which is just starting to roll in – will be more related to B2B in the manufacturing industry. It does have B2C applications as well, but we will not cover those in this article. This Second Wave is expected to unlock huge business value, through: (i) Creation of new business, (ii) Implementation of Modernisation and Enterprise Transformation, and (iii) Creation and monetisation of Digital assets and artefacts.
If the first wave of digital transformation changed business models forever, the Second Wave is set to do it all over again. And in ways that we cannot even imagine yet. More so, since AI has suddenly evolved by an order of magnitude in terms of its ability to understand large amounts of unstructured data using Natural Language Processing. AI-based systems have also developed the ability to interact and provide human-like conversational output, as well as to perform complex tasks at speeds that are impossible for humans to match.
What is Web3?
Nine years back, after launching Ethereum, its co-founder Gavin Wood, coined the word ‘Web3’, describing it as the next step in the continuing evolution of the Internet, one that allows people to “Read, Write, and Own” their digital artifacts.
Digital artifacts can be websites, mobile apps, e-books, digital paintings, digital music, 3D models, Phygital NFTs, and so on. In the context of manufacturing, digital artifacts can be used to design, simulate, and control the production process, as well as to represent and track the physical objects being manufactured, through Digital Twinning or AR/MR-type technologies.
The proponents of Web3 want a decentralised Internet. One that is not controlled by the MATA giants (Meta, Alphabet, Twitter, Amazon): An internet where this control devolves to the users of the Internet.
The Web3 stack helps users to interact with decentralised applications that have been built on the backbone of blockchain or other distributed ledger technologies.
Web3 technologies include not just distributed ledgers, but also artificial intelligence, augmented/mixed reality, metaverse, crypto, NFTs and so on. Also included is the technology stack of Industry 4.0. Together, these technologies aim to create the next-generation internet, which is transparent, decentralised and accessible to everyone.
In a way, these Web3 technologies can be likened to the basic bricks or building blocks that will be combined as needed to ‘Create’ digital artefacts and ‘Transfer’ value on the internet.
The top three goals of Web3 are (i) Decentralisation, (ii) Data Immutability, and (iii) Interoperability.
Let’s explore each of these.
Decentralisation
Decentralisation primarily refers to the re-distribution of power and control: Its objective is to move control away from the giant corporations, into the hands of the billions of Internet users at the bottom of the pyramid.
Web3 utilises blockchain technology to create a more democratic, transparent, and secure system not just for storing and sharing information, but also to conduct transactions. It allows for peer-to-peer transactions and interactions, removing the need for intermediaries and middlemen. For example, it allows A to make a payment to B, without the intervention of an intermediary, such as a financial institution or a bank.
Decentralisation can also apply to the structure of an organisation. An offline example of a democratic decentralised organisation would be an organisation where all decisions are made jointly by all the employees, rather than by just the CEO.
There are several online instances of this new form of decentralised organisation structure, called DAOs (Decentralised Autonomous Organisations), where all stakeholders can have a voice in decision-making and can also be rewarded through Tokens, for participating in certain activities or for contributing to the DAO.
Moreover, unlike the traditional web which relies on centralised servers and intermediaries to store and transmit data, Web3 allows users to connect directly with each other and share not just Information but also Value (in terms of digital artefacts) without the need for a central authority as an intermediary.
Web3 technologies such as blockchain, smart contracts, and decentralised applications or Dapps can be combined with Industry 4.0 technologies to greatly enhance the manufacturing process.
By combining decentralised applications, virtual/mixed reality, sensors, IIoT and cloud computing with digital twinning, colleagues can work together on the design, use case simulations, product testing, or even conduct maintenance from remote physical locations.
Or, an automotive manufacturer could use blockchain to keep track of all the thousands of components that go into each model of a vehicle. In addition, smart contracts can be utilised to automatically generate a Purchase Order when the inventory runs below the Re-order level, or to automatically trigger payments on the completion of an event.
These platforms also enable new avenues for raising finance. For instance, with the help of decentralised finance (DeFi) platforms, manufacturers can access new forms of financing and investment, such as crowdfunding.
Data security & immutability
Web3 is based on the premise that your data belongs only to you.
Web3 aims to provide a tamper-proof system, where data is stored across multiple nodes or computers across the network, rather than in a single centralised location. Transactions too can be similarly stored and processed on a decentralised network, rather than on centralised servers in the data centres of large corporations.
In addition, in the case of data stored on a distributed ledger or blockchain, the protocol ensures that the network validates and authenticates each transaction before it is recorded. This ensures that making unauthorised or fraudulent changes in the data becomes virtually impossible.
Best of all, the distribution of data across thousands of nodes (or computers), when coupled with the inbuilt validation mechanism, makes it difficult for hackers to corrupt or tamper with the data.
Interoperability
Web3 enables seamless communication and transactions across different platforms, networks, and protocols, through the concept of interoperability. This allows different blockchain networks to interact and exchange value with one another, allowing for a more connected and inclusive ecosystem.
The goal of Web3, then, is to create a decentralised internet where data is controlled by the user and not by centralised corporations and governments; where data is stored in a secure and tamper-proof way; and where the different networks or platforms can interact with each other seamlessly. Most importantly, your data belongs only to you!
To conclude...
It is worth noting that while Web3 technologies can revolutionise industrial automation by enabling new levels of transparency, security, and efficiency in manufacturing, it's still a relatively new technology stack and the collection of data for case studies of productivity gains in the manufacturing industry may take some time.
Second, though Web3 has been trending in online and offline media around the globe, the adoption of Web3 in industrial automation will not happen overnight. This is because there are still many challenges and unknowns to be addressed in the areas of scalability, interoperability, and most important, country-specific regulations.
However, the potential rewards for those who are able to successfully implement it are enormous. The future of industrial automation will certainly involve Web3, and the time to start exploring it is now!
Vikas Dhawan is an entrepreneur, futurist, and essentially a technologist, who has developed deep expertise in most of the trending technologies of the last three decades. Currently he provides Digital Transformation solutions to the Manufacturing Industry, that are a mashup of agile path-breaking technologies under the Industry 4.0 umbrella, including IIoT, process automation, Data Analytics, ML & AI, and Digital Security. Vikas may be reached by mail at: [email protected]
