Under the guidance of the FedEx Institute of Technology at the University of Memphis, a collaborative group of private, public and nonprofit innovators are working to make the Bluff City into a hub for blockchain technology.
Blockchain is an emerging trend that has wide applications in the flow of goods and data. For Memphis, with its endless stream of goods flowing through the airport, railyards and interstates, blockchain seems a natural fit.
“The nature of blockchain allows you to, at a larger scale, share more data, more resiliently and reliantly, and transparently for any sort of network. Obviously, for Memphis, that’s a big deal because we are the largest logistics hub in North America,” said Cody Behles, associate director for innovation and research support at the FedEx Institute of Technology (FIT).
Four years ago, FIT identified the power in leveraging the technology in Memphis and started putting a plan into action to foster blockchain that included educating potential early adopters with workshops, building research capacity at the university and creating a collaborative business space in the UMRF Research Park, which opened this year at 460 S. Highland Street.
Memphis is unique among major metropolitan areas. The city really only has one comprehensive research institution, and that’s the University of Memphis.
“We have UT [University of Tennessee] for medical sciences, but for everything else there is only one large research institution,” added Behles.
This fact puts Memphis at a competitive disadvantage with San Francisco, Boston or Atlanta, for example, which are home to several major universities. Talent is attracted to the opportunities for research. So are many businesses, both large and small, eager to capitalize on emerging technology and a trained workforce to support it.
To begin to level — or even get on — the playing field, FIT changed its focus from entrepreneurship to innovation around four years ago. New efforts this year build on FIT's role as a leader in early stage technology research and innovation.
“There is a lot available for entrepreneurs, but not for what comes before you want to start a company, which is figuring out what the technology you want to build is. That has been a key focus for us,” said Behles.
Blockchain technology has the potential for use throughout the broader economy, particularly in the logistics and automotive industries, which makes Memphis a natural launching pad for this burgeoning technology. This is why the University of Memphis-affiliated institute began cultivating the research and application sides of the crypto technology three years ago by gathering interested stakeholders for a two-day workshop, “Blockchain for Professionals.”
“In that class was a lot of the people that are helping to form the blockchain community today,” said Behles.
The university hired a computer science professor, Dr. Kan Yang, in 2017 to spearhead research in blockchain applications.
Blockchains are growing lists of records, or blocks. Each block is linked using cryptography. Each contains an algorithm with information from the previous block, along with a timestamp and transaction data. They are resistant to change and are managed on a peer-to-peer network, or ledger.
Practical applications of blockchain technology began in 2014 with the advent of the digital currency Bitcoin. However, the ledger technology is being transformed for use in a range of industries.
As companies have come into the University of Memphis’ UMRF Research Park, one of the things that has naturally developed is a concentration of companies interested blockchain.
“What we have is this really natural confluence of innovators working in this technology who recognize that Memphis is a resource for them. They are setting up shop in the city because of that,” said Behles.
Several companies in the Memphis research collaborative are in the process of working on applications using blockchain. One of them, San Diego-based XYO, is partnering with FIT to build the world's first people-powered location network built on blockchain technology.
“We are working pretty closely with ReMax to build out a blockchain-based title registry, a deed registry,” said Bryce Paul, XYO head of business development.
Blockchain eliminates the need for trust because it makes all transactions transparent, decentralized and secure. People can transact without knowing one another in what are called trustless transactions, so no need for a trusted third-party interaction.
For example, an e-commerce company could offer customers payment-upon-delivery services using a blockchain network like XYO. The XYO network tracks the location of a package along every step of fulfillment, from the warehouse through the shipping process, all the way to the consumer's house. This application allows retailers and websites to verify, in a trustless way, that the package arrived safely all the way inside to the home.
Once the package arrives, the shipment is marked complete and the payment is automatically processed. The integration of the e-commerce and the XYO blockchain network protects the merchant and customer from fraud. Stores like Amazon could use the XYO network to allow customers to only pay for a product once it arrives at their home.
Another application is being developed by hospitality company Booklocal, a partner in the UMRF Research Park, which sees a use for the technology in hotel reservations. Their service lets travelers search a network of hotels and connect directly to their hotel of choice using the existing public blockchain platform Ethereum.
Applications are not only in logistics, but in transportation, agriculture and commodities trading, music, film, publishing and the medical industry, too. Good Shepherd Pharmacy, a Memphis-based nonprofit pharmacy, utilizes blockchain to make unused prescription drugs available for low-income consumers.
Good Shepherd partnered with FIT and Lipscomb University in Nashville last year to develop software for a national blockchain network that connects it with other nonprofit pharmacies to facilitate the sharing of unused medication.
“Blockchain infrastructure has the potential to fundamentally change the pharmacy industry across the board,” said Dr. Phil Baker, pharmacist and founder of Good Shepherd Pharmacy.
“Beyond that, it has significant implications for those most in need right here in Memphis. It will enable us to save lives by providing medication to those who are otherwise unable to afford it.”
Tracking medications through blockchain also gives quality assurances for consumers, who generally regard the idea of recycled medications negatively.
In addition to small businesses and organizations working in the UMRF Research Park, the technology has also attracted the attention of historic institutions like FedEx Corp. and the cotton industry.
“At the FedEx Institute [of Technology], we are going to be developing solutions together to help make the FedEx supply chain more efficient, more automated, so companies like FedEx, or the DHLs of the world, are all prime targets for us,” said Paul.
The Memphis-based global delivery giant started to explore blockchain in 2017 and cemented its commitment to the technology by joining the Blockchain in Transport Alliance (BiTA) as one of its founding members in 2018. It serves on the BiTA standards board alongside tech and transportation executives to develop blockchain standards and education for the freight industry.
FedEx is focusing its Initial blockchain efforts on its freight and customers sector, evaluating the technicalities of how blockchain platforms function on the public and private side of its business.
The Seam, an online commodity exchange for cotton, headquartered in Memphis, has developed blockchain solutions for the worldwide cotton industry to improve trading. Its technology provides data transparency and traceability and enables efficiency in the global supply chain.
A corporate training platform for blockchain is under development by FIT with the hope the technology can be brought to scale and applied across all these different industries, locally and elsewhere.
“There are certain technologies that are very, very popular that are going to impact tremendously industry in Memphis. It might be blockchain. The problem is that companies want to scale so fast that the workforce isn’t there. Research institutions have a role to play in getting ahead of that curve,” said Behles.