Imagine having the ability to see the complete maintenance history of any aircraft and know with complete confidence that all of the entries are legitimate. Imagine having the same visibility of history into the actual, uniquely identified parts that you order. Imagine that all of this is in the cloud and all you have to do is use a computer to access and contribute to this information. No paperwork. No wondering if an A&P IA’s signature is legitimate. No wondering about where a part came from or the journey it took to get to you.
Let’s cover some basics first, then I’ll show you how this will become possible.
Disclaimer: What I am about to describe might make those who are experts on blockchain irritated in the broad brush explanation. But it gets the point across.
Blockchain – The New Enabler
I’m sure you’ve heard something about blockchain. Most of you are probably asking yourself if you heard about it from Bitcoin. Yes, you did hear it there first. Blockchain came about as a technology enabler for Bitcoin. Bitcoin is a virtual asset that is designed to be traded between two entities that might not know each other and might not trust each other. Bitcoin also needs a way to protect the holdings of an entity so that one entity can’t steal another entity’s Bitcoin. Blockchain is a necessary part of bringing Bitcoin to market, but it has now matured and become something much bigger than Bitcoin and cryptocurrencies.
Got that? Bitcoin is a virtual asset. Blockchain is the electronic record-keeping system that allows two parties to trade virtual assets in a secure, trusted manner.
Two independent technologies. Bitcoin has to have a blockchain to work. Blockchain technology does not have to have a cryptocurrency like Bitcoin to work.
Here is another way to think about it. Bear with me, I know accounting is pretty boring to most of you, but if you take the time to understand, you will have a better understanding. Blockchain is a ledger system, just like the ones accountants use. With current accounting systems, when a company sells products, the accountant makes an entry in the Accounts Receivable ledger. The accountant at the receiving company makes an entry in the Accounts Payable ledger. Once the cash has been paid for the items, both accountants make the necessary entries to record cash out (buyer) and cash in (seller). Both businesses trust their accountants to make the right entries into the separate ledger systems. Both businesses trust their employees to properly transfer the goods, services, and paperwork from one company to the other. There is a lot of trust here and separate ledgers. Currently, almost all businesses are built on trust at multiple levels.
Blockchain is a distributed, shared, electronic ledger. So, instead of multiple accountants recording the transactions to their individual ledgers, a single transaction on the blockchain will record the back and forth of the transaction for anyone to see or verify. One entry for both parties is made to transfer a virtual asset from one party to another. It is the entry of record.
The next concept to learn about blockchain is that a copy of the ledger resides in multiple places. It is essentially everywhere. All of the copies are kept up to date. When a transaction occurs on the blockchain, it is broadcast to all copies of the ledger along with some very complicated math that each ledger has to solve. Once the math has been solved, the answer should match the originator's answer, and the transaction is recorded in all copies of the ledger. If anyone tries to make a false entry in a ledger, the math will break, and all copies of the ledger will point this out and the transaction will fail. It is impossible for a rogue actor to take over every single ledger copy. Why? Because a copy of the ledger is owned by you, your competitors, third-parties who don’t have a vested interest, and others. All of the copies are kept up to date in real time. They all have to match, and if one copy doesn’t match, it points directly to a breach in the system.
But you don’t want all of your confidential information to be visible to your competitors or anyone else for that matter without your consent, right? Blockchain handles that. Everyone will be able to verify that a transaction has occurred, and they have the math results to prove it. However, the contents of that transaction do not have to be public. They can be encrypted and stored off of the blockchain. The contents have a unique cryptographic signature, which is embedded in the transaction math we talked about earlier. If you own the information contained in the transaction, there is a way to select who gets to see that information, and you can even select that some of the information is visible and some remains invisible. Today, there are numerous examples of competitors within various shared supply chains who are using a common blockchain to exchange goods and services.
Blockchain is becoming the most efficient and secure way to transfer any uniquely identifiable asset between two entities without involving intermediaries. The ability to track the specific information about an asset, as well as its journey through space and time, or provenance, has been the most valued benefit of blockchain to companies who have implemented it.
A Quick Explanation of “Assets”
I mentioned earlier the concept of Bitcoin as a virtual asset. This is true. You can’t get a physical copy of a Bitcoin. A Bitcoin is represented by a cryptographic hash (complex mathematical representation) and can only be tied to one owner, whose software signature is embedded in the hash address.
Physical assets can be represented as virtual assets on the blockchain when they have a way to represent the asset in a very unique way. Real estate, for example, is represented by a physical address. There can be only one physical address. This can be represented on the blockchain to facilitate real-estate transactions. You can look on the blockchain and see who owns the property and that person can pass title to you over the blockchain as long as the title is clean. If the title has liens, then all parties who own that asset would need to sign via software signature to allow the title (blockchain block) to transfer to the new owner. No more need for title searches and closing attorneys. This is already being done in some states.
An annual inspection could be considered a virtual asset in the case of aircraft. A block would consist of the aircraft’s virtual representation (N-number or serial number), the list of work and inspections done, and the IA’s software signature. It may also contain information on the parts that were installed, and each part would have its own history (see provenance below).
A message from an avionic or sensor could be a virtual asset. The reason to do this might be to ensure than the message gets transmitted only from the avionic or sensor to the intended recipient. For general aviation aircraft, this probably isn’t of concern. But for the latest fly-by-wire carrier aircraft, this could prevent a malicious actor injecting false messages into the system to trick a pilot into landing at a nearby airport due to perceived mechanical failure. If several aircraft from several carriers were on the same blockchain, they could all enforce the communication of these messages (virtual assets) so that a malicious actor couldn’t take control of all of the ledgers at the same time and spoof the system.
Provenance – The Whole Story from Birth to Death
One of the most valuable attributes of blockchain is the ability to store all of the necessary information about an asset in the cloud. When a subassembly is created, a blockchain representation can be created to uniquely identify that part, store all of the chemicals, formulas, processes, and parts that make up that subassembly, store the name of the technician who built it (using his/her software signature), along with pictures, drawings, or any other relevant information. As the subassembly is traded from manufacturer to shipper to installer, you would have this information as well. If it is deemed critical, you could embed a sensor that detects vibration, g-force, and temperature that is recorded periodically (e.g., 15 minutes). When you receive the part, you can check the blockchain and see if it has been exposed to excessive g-forces or temperatures during storage or shipping. If it is a used part, you would add that history to the blockchain and you would be able to see the history of the part from new to current day reflecting all of the owners, shipping, installations, rebuilds, and inspections.
Do I Have to Install Blockchain?
No, but you should stay abreast of news in your area that indicates a blockchain is coming to your area. I believe the major players such as Rolls-Royce, Honeywell, and others will kick-start the blockchain initiatives (See below). Since these blockchains are common property for the most part, they won’t be owned by one entity. There is certainly nothing to prevent you from starting a blockchain consortium if you think there is value to your world of customers, suppliers, aircraft, parts, and services.
Industry Examples
Rolls-Royce is a pioneer in exploring ways to harness the power of blockchains in its jet engine business. It is working on a way to track jet engine fan blades, among other things, from the point of manufacture to the use by a customer in a finished aircraft. The block for a particular fan blade might contain the origins and chemical composition of the metal used to fabricate the fan blade. It might contain the name of the technician who used a set of serial-numbered machines to convert the raw materials to a serial-numbered fan blade along with a date/time of manufacture. It might contain the route the blade took through the supply chain, including PO and tracking numbers, to the final destination. It might contain the name of the technician who installed the fan blade into the engine. Imagine all of that information, instantly accessible to someone with the right security credentials, right there on a blockchain. What if that blade failed? With the right security authentication, one could get on the blockchain and trace the fan blade all the way back to the point of origin, determine what other fan blades in adjacent batches need to be inspected, then find those blades in other engines, all in a matter of minutes. Right now, this process takes days if not weeks as someone has to traverse a combination of electronic and paper systems that do not persist the information from point to point.
Honeywell recently announced that it is transforming its aviation parts business to a blockchain-based system. The primary reason for this move is it allows customers to buy direct from Honeywell. It will ensure that buyers buying parts are buying the exact part they see online. No more wondering if the item is in stock. The system will have actual images of the actual part, along with whatever provenance the company decides to embed in the blockchain record. This is part of the new GoDirect family, and is specifically referred to as GoDirect Trade.
A welcome paperwork replacement for some
Not everyone will benefit with equal value from a blockchain world, but everyone will still get tremendous value. The carriers keep most of the maintenance records online, so the records part won’t be a big boost, but parts provenance will be a huge boon! Those who have the most to benefit are the smaller operators who currently have to record every maintenance item with a paper logbook. Yellow Tagged items? It’s on the blockchain. Annual and 100-hour inspections? Recorded on the blockchain and signed using the IA’s electronic signature. Aircraft buyers will be thrilled to have the ability to go on the blockchain and have confidence in the component times, inspections, and other attributes. Lost logbooks become an artifact of the past.
A Coming Disruption
Blockchain is becoming just as ubiquitous as the internet. It is a common platform to ensure authenticity of trading physical and virtual assets across the internet. It will dis-intermediate thousands of middle-tier players since customers can get direct access to manufacturers and suppliers. It will greatly simplify the record-keeping, auditing, and traceability of subassemblies and finished products. Stay tuned!
