How can Blockchain transform the oil industry?
The oil industry is a natural but non-renewable source of energy that plays an important role in the smooth operation of vehicles, factories, plants and many more things. Renewable energy can be produced from natural resources, but when the oil is finished, there will remain no source of mining oil. Demand for oil increases, and costs increase, which is very complicated to track. But blockchain is revolutionizing the oil industry. While symbolizes oil and gas , some oil companies in the United States are forming a consortium for the oil sector that will reveal potential benefits for these industries. The oil industry works by extracting the crude oil from the earth, refining, transporting, distributing and selling which is known as the supply chain process in this industry which will also help you understand the system.
Understand the oil industry blockchain in detail
People began to trust the blockchain when bitcoin came into being because they knew the potential for the government and other third parties to be unable to track users’ transactions or spending habits. Hackers could not hack users’ wallets. We can use our wallet like owning a bank, e.g. have complete ownership of our funds and transparency of transactions publicly.
So in simple words, blockchain is the platform to secure transitions or things that will be immutable and publicly visible without hacking, which can not only work for payment systems, but can revolutionize the various major industries such as oil and gas, etc.
The oil industry is now implementing a blockchain system that can be a private blockchain for internal tracking such as hiring, recruiting, employee performance within the organization and many more things that will only be visible to company members. And the other is the public blockchain, which will track companies’ records transparently without leaks and storage problems. They can also use the crypto payment system by removing the financial institutions like banks to reduce costs, which will also be a significant change in the oil industry.
How can blockchain transform the oil industry?
There are following aspects of blockchain that can transform the oil industry given below:-
-
More confidence:- Trust factor is important to determine the success of any company, because if the internal employees commit fraud, how can the company survive in the outside world? The private blockchain in the organization can be transparent with all operational data for employees from a to z, which will create more trust between the employees and company owners.
-
Crypto backed oil industry:- Most of the payments to the oil industry are processed in the fiat currency that we use daily for small and large transactions. The fees to the banking or other financial systems make it more costly, but the crypto-backed oil industry makes it more cost-effective by cutting these third parties out of the supply chain. In addition, the transaction we make in fiat currency will happen as a cryptocurrency for the purchase or distribution of the oil.
-
Visibility of oil field assets:- the need for oil is everywhere in the world. Many manufacturing companies produce many things and vehicle companies also produce vehicles to meet the needs of the general public. People buy vehicles for their needs, and by increasing the population, the demand for oil also increases, forcing the oil companies to do more and more work. So it becomes very complicated for them to maintain the oil field for smooth working. The challenge of tracking a single asset throughout the company also increases the organization’s costs. Blockchain will make the oilfield asset on the operational side visible to the management team so that they can make the right decision to control the costs and other things.
-
High transnational security:- It does not mean that the cryptocurrency transaction will only cut the high fees, but it is also more impossible to hack than any other centralized institution. For example, if you go through third-party payment gateway, you will lose all your deposited money when it gets hacked. Nevertheless, the blockchain system is on millions of computers worldwide, and the hacker cannot hack every single computer on the blockchain system, which makes it more powerful.
-
Minimization of costs:- Cost minimization is also the most important benefit of the blockchain system because it will reduce the intermediaries in the oil and industrial supply chain, reducing costs. It will also reduce the system companies paying for the cyber security staff and the storage management companies. In addition, it reduces a lot of software and hardware costs by installing the blockchain system in the oil industry.
