As the basis for the collaboratively maintained general ledger that supports the bitcoin alternative currency, blockchain technology has captured the imaginations of developers, entrepreneurs, and investors worldwide. (Personally, I’ve been exploring the topic for about a year.) This technology — either that which supports bitcoin or other services — also has great potential for how companies can support their stories, provide proof-of-performance, and inject some amount of certainty into a generally uncertain digital world.
Blockchains make digital records virtually permanent and immutable, since it would require a considerable amount of computing power and collusion to reverse a transaction and cover one’s tracks. That why The Economist refers to blockchain technology as “the great chain of being sure about things” and Reason Magazine goes so far as to coin the phrase “a supercomputer for reality.”
Watch this introductory video by the World Economic Forum, and then check out five potential blockchain applications below.
Since a small amount of data can be attached to a transaction record, using the bitcoin blockchain as a notary service is easy and inexpensive. For a little more than $2 worth of bitcoin, I notarized the date and time I published one of my essays about blockchain applications in PR using Proof-of-Existence.Com. With apps like Uproov, smartphone multimedia can be similarly notarized almost immediately after creation. This could be useful if you needed to prove to a group of stakeholders that 1) a business event occurred at a particular date and time, and 2) you have the unaltered version of that documentation.
Supply-Chain Communications & Proof-of-Provenance
Most of the things we buy aren’t made by a single entity, but by a chain of suppliers who sell their components (e.g., graphite for pencils) to a company that assembles and markets the final product. If any one of those components fail, however, the brand takes the brunt of the backlash — it holds the majority of the responsibility for its supply chain.
But what if a company could proactively provide digitally permanent, auditable records that show stakeholders the state of the product at each value-added step? Ideas like Provenance.Org and SkuChain aim to do just this, as the latter’s video briefly explains in one farm-to-shelf scenario:
This is no small task: The global supply chain is estimated to be worth $40 trillion and, from a business-process perspective, it’s a spectacularly inefficient mess. As a related issue, a blockchain can be used to track diamonds, art, real estate, and virtually any other asset.
Blockchains (either that of bitcoin or others) are capable storing not only transaction records but logic. This means that digital contracts can be written in order to make transactions seamless and more or less self-executable if the agreed-upon conditions are met.
Last year, I was fortunate enough to work with Sergey Nazarov from SmartContract.Com on an essay discussing how this might work in corporate social responsibility and, more specifically, socially responsible investing. His firm envisions multiple use-cases, including connecting a contract to GPS data that automatically releases payment to both the shipper and supplier when a package arrives.
At the very least, such contracts — publicly viewable and auditable — could put some real weight behind attempts by industry consortia to show credible self-regulation efforts.
“Fair Trade Music”
It’s worth exploring one type of contract in particular: music royalties. British singer Imogen Heap is looking to change how musicians license and get paid for their songs. Just as advances in electronics have driven down the cost of recording and producing music, so too might blockchain technology reduce the need for the coterie of lawyers and bookkeepers that manage the published product, taking their cut ahead of the artist along the way.
As Heap describes:
I don’t offer all the answers of course. I’m not a coder or a systems developer, but I’m dreaming more the flow of how I feel logically the system needs to work... leaving the creative sides of the business to operate freely and without their clunky counterparts.
There are ever-increasing platforms that need our music in order to survive, and I feel it should happen the other way around: The artist uploading one true version of their content, and all services point to that one. Nice and simple!
Gosh Darn Nearly Everything Else
Ethereum is a complete programming language that exists atop its own blockchain and cryptocurrency (Ether), which is used to pay for access to the network’s resources. Some interesting ideas based on Ethereum include:
What interesting blockchain applications can you think of?
Phil Gomes is a senior vice president in the Chicago office.