Securing the supply chain of electronic components through blockchain has inched closer to reality.

UK consultancy Accenture and French electronics maker and security expert Thales have been working together to integrate security features with the blockchain technology that underpins the digital currency bitcoin to secure the supply chain and prove provenance.

Blockchain is essentially a digital database of time-stamped records or transactions. It is being heralded as a breakthrough in supply chain integrity but there have been questions surrounding the security of the blockchain as this depends upon the security of its cryptographic keys.

Accenture and Thales have looked to address this issue.

"Implementing stricter standards is an important step in improving quality in the supply chain, but so is enforcement," Mark Walton-Hayfield, digital business leader at Accenture, told EE News Europe. "We've developed this new technology to help companies do that quicker, easier and more accurately."

Accenture and Thales have developed a system that uses a near-field-communication-based crypto-tag on a bag of diodes as security features alongside a physically unclonable feature element in an integrated circuit that can be programmed post-manufacture (known as a field-programmable gate array). These two elements are then linked to a secure blockchain ledger to record all transactions.

The two companies are also working on a blockchain-based cryptographic key management and distribution technology – named the Thales Hardware Security Module – which was announced in February. Digital keys stored in the Thales HSM architecture cannot be extracted or used except under a highly controlled protocol. This technology could also form part of the electronic components security system, the companies said.

The blockchain system could have significant implications for the military where cases of counterfeit electronic components have made their way into the legitimate supply chain and even into military equipment.

"Counterfeit parts are a real threat in manufacturing," Walton-Hayfield said. "Earlier in 2017, the US armed services estimated that 15 per cent of the components in their machinery are counterfeit. We don't even have an estimate for what that is in the UK military, but we should anticipate that it is comparable."

Gareth Williams, vp secure communications and information systems at Thales UK, told EE News Europe that the integrated blockchain system provided additional integrity to the supply chain along with elevated levels of assurance and trust. "Ensuring that equipment reliably performs to specification, without compromise, is critical to the stability and safety of our armed forces and this means that the defence supply chain has to assure the Ministry of Defence that the right equipment is being used."

He added: "The impact of non-conforming components in mission- and safety-critical systems, be they hardware, firmware or software is huge, not only to the operational user, but also to suppliers and integrators who are impacted negatively by grey market and counterfeit goods through reputation and re-work."

Earlier this year, Simon Whitehouse, senior managing director and head of blockchain technologies at Accenture, said that in that the cyberworld was making supply chains increasingly vulnerable to attack and he believed that the Accenture/Thales blockchain technology would provide a solution. "Blockchain is quickly maturing across industries and is set to profoundly change how businesses operate," he said.

The technology is already applied in the banking sector and both companies are looking to expand into healthcare and government among other industries.

The technology could also be useful in tracing the US' electronic waste, where there are concerns that it is being used in the production of counterfeit electronics, particularly microchips, that could re-enter the US domestic and military market. In February, the US reintroduced a bill that aims to control the export of electronic waste in a bid to combat counterfeiters and protect US national security against fake electronics that make it into the US military supply chain.