Applying Blockchain to the World
Distributed Ledger Technologies have been receiving a fair amount of attention as of late — and not without good reason.
Whilst for many this hard-to-comprehend technology just seems like the next in a line of endless stream of technologies to work its way into the mainstream, for others DLT has the potential to radically shake things up in a disruptive manner hardly comparable to any other technology currently available.
The frequently cited form of Distributed Ledger is the Blockchain. Without going in to detail about the subtle differences between Blockchain and DLT, it may be worth providing a simple definition. A blockchain is a decentralised, distributed and public digital ledger that records transactions across a multitude of computers. This necessarily creates records that cannot be altered retroactively, unless of course you somehow edit every single record in the network. As the list of records (or blocks) grows, they are linked and secured using cryptography to guarantee traceability within each block.
Of course, the obvious and most widely implemented type of blockchain is in the new cryptocurrency world, where the iconic Bitcoin has made its name. That being said, the conceptual backing for this technology means that its application can be much more varied than simply for digitised monetary transactions. To some degree, all that is stopping novel innovations with the blockchain currently is the imagination of the people exploring it. Here I will highlight some of the current alternative uses of Blockchain that will likely play increasingly important roles in the future, both for business and the ‘greater good’.
Smart Contracts
Blockchain technologies for generating smart contracts are becoming ever more popular in the business environment. Take Ethereum for example. Whilst predominantly a cryptocurrency, Ethereum also allows within its make-up to be also used to control and manage modular business rules. This means that verification of contractual agreement protocols can be enforced with much more diligence than would be available otherwise. Importantly, these contracts can exist as both B2B and B2C which can provide customers with greater control of their contractual destinies and in turn help ensure compliance.
Let’s take an example.
As an active stakeholder in the Real Estate industry, you may have endured many setbacks and financial burdens. Firstly, your buyer keeps failing to meet the terms you set and causes unnecessary expenses and delays in the process — such as those caused by gazumping. Then, due to the costs associated with the transfer of deeds and contingent variabilities in the sale, third party fees skyrocket. Thanks to blockchain technologies like Ethereum, every contingency can be spelled out on the blockchain which is then validated on the public ledger. Say goodbye to unnecessary costs!
Real Estate is not the only example of an industry set to take advantage of verifiable contracts. The insurance industry could also massively benefit in terms of anti-counterfeiting and fraud protection by being able to track customer interactions through the chain. Moreover, claims processing itself could be streamlined like never before — policyholders could receive payments for uncontested claims immediately, instead of a month or more later, as frequently occurs under current procedures.
The Automotive industry is seeing some pretty exciting developments as well, with companies combining blockchain ID protocols with car renting. Unlike a traditional rental process, with blockchain it is possible to authenticate users for an allotted booking and automatically unlock the car to start the rental remotely. It is then possible to track the car’s usage (fuel, miles etc) digitally, thereby providing a near complete rental service that can be agreed on and processed without ever having to go into a rental office.
Identification
Identifying legal entities has become a modern phenomenon that is changing the way companies interact with regulators across the globe. But what about identities for the everyday citizen? It looks like the blockchain here too has a solution. Public blockchain ID profiles for citizens bring with it the potential to authenticate identities in a much more concrete way — check out Estonia who are already implementing digital Citizen IDs! Furthermore, identification through a secure ledger could be used to resolve land and property title disputes once and for all. Even third sector services such as AirBnb could benefit from blockchain identification as a way to install higher levels of trust between guests and hosts.
Not only has the standardisation of business identities come recently to the fore, but the capacity for blockchains to create business ID’s has potentially an even greater scope. Companies can verify and share their identities easily upon request — notably, they could choose who they share it with. For companies that cross-collaborate on larger projects, the capacity to create these so-call ‘sidechains’ could revolutionise the way private transactions are handled between and within businesses. Through the ability for blockchain technology to simulate Zero Knowledge Proofs, a sense of online privacy can be retrieved between business and customer, where only the information that is necessary would be shared (something even Facebook would seem to have a use for). This is a potentially huge move for B2B Know-Your-Customer interactions!
Outside of the business world, in Healthcare, blockchain provides a great way of securing patient information that is not only immutable but can also be securely shared with other entities. Clinical research trials would massively benefit from such a safe way of accessing patient information without the possibility of it getting out or tampered with. There have even been novel ideas surrounding the creation of ‘humanitarian blockchains’, whereby blockchain IDs could be used to verify volunteers. Considering the recent scandal with Oxfam volunteers, there is potentially scope for tighter security in assessing volunteers who engage in humanitarian work.
Supply Chain
Provenance is an issue that has been looming over supply chains across the world increasingly over time. We only have to think of the Organic certifications, Fairtrade, the Kimberly Process or counterfeiting more generally to begin to see how important tracking the whole supply chain is. Now, blockchain is set to be the next big thing in supply chain tracking and it is quite easy to see why. At its most fundamental level, blockchains offer a way to track the entire life cycle of a product. In forestry, this means that wood used to build the roof of your house can be tracked all the way back to the tree that was originally felled, including any modifications made to the tree in the process. Of even more significance, however, is the potential for the Blockchain to authenticate certifications and standards in ways previously unavailable. By being able to track products from start to finish, certification schemes can provide greater assurance as to the credibility of the sources wielding their accreditation. PEFC, for example, are already looking into potentially integrating blockchain right into their certification scheme criteria.
Blockchain & IoT
To have heard of the Blockchain and not the Internet of Things is becoming less commonplace every day. Entrepreneurs across the world are constantly coming up with even more inventive uses of IoT technology — whether through integrations with autonomous vehicles to improve congestion in city centres or making sure your fridge remembers to buy you milk before you run out. Combining Blockchain with IoT tech, however, creates the possibility to augment the potentialities available. Records of assets and supplies can be digitally stored on a ledger, tracked and then used to the benefit of life-cycle assessments for both businesses and consumers (and the contents of your fridge). The fundamental principle here is integration and it seems that the more ways to integrate, the better. Take, for example, the additional application of RFID technology to the blockchain and IoT. Before you know it, you have made redundant a whole variety of tedious tasks in asset tracking systems like warehouse management.
Loyalty Programmes
Sometimes, technology is applied to an idea that in theory could be completely fine without it. Does this make the technology unfit for purpose? I don’t think so. Take loyalty programmes as a case in point. Companies, both large and small, frequently use loyalty programmes as a way of retaining and capturing customers. Sometimes groups of companies band together under one loyalty scheme to increase the attractiveness of the offer and in turn create greater benefits for everyone involved — the Nectar Card is a fantastic example of this. Where the blockchain comes in is the ability for technologically smart loyalty programmes to become part of companies of all shapes and sizes. Indeed, a major barrier to inter-company loyalty schemes are the costs involved in setting up, tracking and maintaining the system. But with blockchain, such loyalty schemes could be used by everyone. Even your local farmers’ market could use the technology to increase its offering! While it may not need blockchain to work, it sounds like a great idea nonetheless.
Environment
Climate change has been a hot issue for some time now. For young voters especially, research has revealed that this is the subject they care more about than anything else. Regardless of whether the environment is your top or number 5 priority, it is now commonplace to find actors trying to find new ways to curb our harmful footprint on this planet. It seems once again that the Blockchain may have a neat spot in fighting for the cause.
Carbon trading has a distinct history of both approval and disapproval. Widely adopted in the EU whilst being simultaneously demonised by environmental groups for skirting the real issue at hand, carbon trading has now taken root in many industries as the best short-term strategy for mitigating carbon emission problems. One of the most distinct difficulties faced in this initiative has been the lack of accountability within the system when it comes to reporting real carbon emissions and honestly trading credits. While tracking gross emissions is a technological hurdle that requires more than a software fix, the blockchain is poised for re-authenticating this process and ensuring companies truly pay for what they -at least- record.
Alongside carbon trading, the decentralisation of electricity networks has been huge, especially within certain countries like the Energiewende in Germany. Micro-grid P2P electricity trading, particularly with renewables, seems to only ever be increasing and blockchain solutions will likely play a huge role in facilitating these localised trading networks.
In the UK, Friends of the Earth recently conducted a nationwide Air Quality assessment and revealed some pretty shocking facts. Besides their factual findings, one of the concerns that arose from this mission was the mutability of the recorded data, which made political decision-making around the topic stagnate and subject to greater lobbying flexibility. If, however, data from such surveys could be created and stored in a way which ensured its authenticity, it could revolutionise accountability for environmental matters across the world!
Some final thoughts
Alongside the cases above there is also scope for Blockchain’s wider application in a whole host of other fascinating fields such as:
- Security — where sensitive information (i.e. military documents) could be more securely handled;
- Academia — for reducing degree fraud and authenticating peer review processes and reproducibility in scientific documents;
- even in the Hospitality sector — to validate that the reviews of the hotel you plan to book with are real.
The uses cases described above highlight only a few examples of what is made possible through the blockchain. In the near future we will undoubtedly witness novel applications that were not anticipated at the time of this being written. I have given examples of what I think are some really interesting use cases for the technology. As can be seen, there is a mixed bag of both B2B applications as well as some more social solutions that could benefit from blockchain technology. Where this technology will take us only the future will tell.
MakoLab are a global agency focussing on digital solutions. Recently, MakoLab released it’s ideas around a semantic Blockchain — Graphchain. Get in touch with us today to find out how our Blockchain solutions can help your business.
