With the advance of “bitcoin revolution”, blockchain has practically become a fashion word, but there are still lots of misconceptions about this technology. In recent years, many distributed ledger technologies and methods have emerged and many problems have been identified. Experience shows that blockchain technology is not applicable to all areas, and there are problems with capacity and speed as well as with various cryptocurrencies.

When we realised that the properties of blockchain technology have a lot in common with the expectations of our company, e-track, we immediately set out to analyse distributed ledger technologies. Moreover, we tried to find out which technology is best suited to ​​the requirements of the supply chain we face at e-track.

Right from the start, we realised that should we decide to use blockchain technology, we must think in terms of a private blockchain. The reason for this is threefold. Firstly, this system is typically used by a “private company” anyway; secondly, the mining costs would have greatly increased the cost of use; and thirdly, the slowness of a public blockchain is also a vital factor. In a private blockchain, each participant is also a miner, so the mining cost can be saved. Nonetheless mining is a burden for all participants because it requires extra investment and development. The analysis revealed a recurring problem when handling the data from a large number of haulers, and later from other IoT (Internet of Things) devices, which necessitate a fast verification and processing system. The blockchain is apparently not quite suitable for that.

IOTA vs. blockchain

Recent years have seen the birth of a number of new distributed ledger technologies. These developments largely aimed at eliminating and correcting the shortcomings and defects of traditional blockchain technologies.

One such development is IOTA, which has made a breakthrough in improving the speed of authentication and in eliminating mining resource problems. IOTA was primarily developed for the efficient management of a large number of nano transactions. It does not use blockchain technology to manage authentications, but a block-free distributed general ledger architecture called Tangle. A further advantage of Tangle is that it provides consensus in a decentralized peer-to-peer system with a scalable, low-resource requirement and free of charge. The essence of Tangle is that authentication is not done by a miner, but a transaction is authenticated only after 3 other transactions have been authenticated. It follows that the large number of transactions does not slow down authentication, but acts as a catalyst instead.

Seeing the benefits of IOTA and Tangle, it became obvious to us that we had to start with developments in this direction. It is important to note here that IOTA is not the one and only block-free shared ledger technology, but we have found it to be the most advanced and best suited for the services we provide. Our services typically handle signals from a great number of devices (>200k), and in some cases extremely frequent signal sequences (from 1 signal/sec/device to 1 signal/min/device). These transactions need to be verified almost in real time, a task that blockchain technology in its present stage can not cope with. Moreover, the huge transaction number in a traditional blockchain system would entail huge verification costs, or, in the case of a private chain, it would require a significant mining resource from the participating partners. All these are not required in Tangle, and each transaction is authenticated almost in real time. The IOTA architecture also offers the possibility of creating a “private Tangle” that may offer further speed increase.


Our first test results show that IOTA has proved to be a good choice as it is a quickly deployable and completely reliable technology. In the near future we are about to discuss our experiments with IOTA in more detail. We also mean to make available a test environment where anyone can try this system online.

In you want to read more about the potential of the supply chain, please check out our previous news or browse our services, which provide a number of solutions that help ensure the visibility of logistics processes.