Cryptocurrencies have officially made the transition from being an obscure technology few people understood, to becoming viable decentralized currencies that people are building their careers on. And the dawn of cryptocurrency has had a lot of interesting consequences for the business world.
Perhaps the most interesting of these is blockchain. While it’s not actually a new technology, its relation to cryptocurrencies has earned it a share of the spotlight.
Blockchain is a public, tamper-proof, electronic ledger. Each party controls a copy of the blockchain and when new data is added, everyone must consent to it.
But once data is added, it’s essentially impossible to remove.
The ultimate promise of blockchain is to create a more trustworthy and verifiable internet. It might not sound like the most interesting tech, but it has many possible real-world applications that are getting people excited in a number industries.
Related reading: Custom Blockchain Development
Supply Chains and Proof-of-Provenance
If you’re conscious about where your food comes from, or whether your clothes are manufactured ethically, blockchain being integrated into supply chains could be very exciting for you. You will be able to check a permanent record of exactly how your product made it to you.
While no system is perfect, and people might find a way to cheat it eventually—due to the decentralized nature of blockchain, fraud of any kind will be very difficult. Proper checks will have to be in place to verify the information is correct as it’s added, but once it’s in there, there is no way to remove it.
As a supplier you could include whatever information the consumers want at every step, e.g:
- Wages of workers
- Emissions produced
- Time between steps
There’s no limit to the amount of data you can record, and it’s not just about ensuring your eggs are free-range. Various high-end items justify their price tag with stories of their intricate manufacturing process and exotic materials. Blockchain could just as easily be applied to verify these claims.
Further up the supply chain, manufacturers might also want proof that the materials they are receiving are as promised. Retailers might want the same from manufactures so they know when something has changed about a product they stock.
Blockchain verified supply chains will impact all of the commerce world—as it already is. As reported by Shopify, both Alibaba in China and Amazon in the US are already experimenting with it:
“A handful of ecommerce giants have been quietly experimenting with Blockchain…Alibaba is currently using Blockchain to track the origin of food products and reduce the amount of counterfeit products being sold. And Amazon recently registered three cryptocurrency web domains.”
Internet of Things
An internet of things (IoT) is a network comprised of various electronic devices that share data. An IoT that everyone might be familiar with is one that exists in a smart home. You could write a book on all the different possible uses of IoT’s and their ramifications, so we’ll have to keep things brief here.
Why do we need blockchain for an IoT? Without blockchain it would be difficult to verify that each node of the network has the same information, and that it hasn’t been tampered with. For example if you wanted to push a software update using an IoT you would need to verify that the complete, correct, code is being transferred and that it’s from a legitimate source.
Networks of self-driving cars might be one of the coolest uses of IoT. All the information being gathered every second by every autonomous vehicle on the highway could be distributed to every other vehicle, massively increasing safety for everyone on the road. And blockchain could be the means of securing this data transfer.
There are a number of enterprise applications of IoT being discussed already. In agriculture, we could see large numbers of sensors reporting vital information about feed levels, temperature, humidity, ice or soil nutrient levels. With that information to hand, you could have a system that self-corrects some of the less complicated issues, such as giving plants more water in hot days. And for the difficult problems you might send the farmer an in app notification while he’s relaxing indoors.
Manufacturing can benefit in largely the same way as agriculture, and government infrastructure networks such as the power grid and traffic systems could also see vast improvements in efficiency using blockchain and IoT.
If any industry requires absolute accountability and trust, it’s the insurance industry. Blockchain could provide reliable information on the history of every customer to verify all sorts of information—from accidents to illnesses.
This sort of permanent individual record does raise many privacy concerns going forward, and we will have to wait and see how these are solved. With the GDPR setting a trend towards greater personal rights in Europe, it’s probable that limitations will be placed on the amount of data companies are allowed to store and share via blockchain.
Smart contracts are digital contracts that verify legitimacy. For insurers, blockchain verified smart contracts offer huge potential savings, since the workload of verifying contracts and ensuring they are being fulfilled appropriately would be taken on by a program. For example a smart insurance contract could:
- Automatically charge monthly payments
- Payout when criteria are met
- Adjust rates following an incident.
However, there are some potential issues with smart contracts. Due to their decentralized nature if a bug or security weakness is found, it isn’t a simple fix. This is because the contract is stored on many different devices and each one has to consent to the changes for it to become official. A fairly well known example of this is the cryptocurrency Ethereum’s inability to support decimals in its contracts. Workarounds exist, but a fix won’t be easy.
Although blockchain is being billed as a new, flashy technology, we will know it has arrived for real when the hype has died down and it’s an integrated part of our daily lives. Its impact might seem subtle at first, but soon the time will come where we can’t fathom how we used to do things without it. So get on board early and you’ll be a step ahead when it hits the mainstream.
Victoria Greene is a writer and branding expert. She runs a blog called Victoriaecommerce. Her site offers tips for new business owners looking for help with marketing automation and new digital technology.