by Chris Cowan
Bandied about in a game of word association, seconds later you’ll likely hear ‘Bitcoin’ eagerly shouted back. But how many people would reply with trust, transparency, or security? Outside the circles of blockchain enthusiasts, it’s probable that you wouldn’t hear these associations at all.
The automatic twinning of blockchain with Bitcoin, and cryptocurrencies at large, is understandable after all. A new digital cash system was the original intention of Satoshi Nakamoto – the unknown founder, or group of founders, who first devised the coin’s underpinning blockchain technology. Indeed, cryptocurrencies are an exciting prospect and well-deserved support exists for digital assets, investments, and trading.
Still, in the decade following Bitcoin’s creation, negative publicity has never trailed far behind. Countless hacking scandals, so-called ponzi coins and knee-jerk attempts at regulation have arguably cast a shadow over the whole of blockchain as a concept.
In its 2020 Global Blockchain Survey, Deloitte lists potential security threats and lack of skills and understanding as two of the key barriers standing in the way of blockchain adoption by companies across Europe.
Throwing in crypto community jargon like FUD, FOMO and HODL and you’re even more likely to be left thinking WTF.
So, let’s get our heads around some terminology first. What is a ‘blockchain’?
Simply put, it’s when ‘a block’ of digital information – typically an instruction for a transaction – is stored on a public database, aka ‘a chain’.
When a new block is created it is in effect timestamped and, using very strong cryptography, added to the end of the chain. At the same time, the new block is validated as taking place by other parties also keeping a record of the chain. By having distributed records of all transactions, once a block is added to the chain no retroactive alterations can be made without the consensus of a majority of the network. In practice, blockchain is secure by design. Any alteration would require changing all copies of the chain and go against the collective self-interest of users.
As an analogy, think of blockchain as a reply all email. Everyone included in the email ‘chain’ has their own copy of the collective messages sitting in their inbox. Changing an earlier message to make it appear something was said that wasn’t, or deleting a couple of sentences, can quickly be picked up by everyone else if they check their individual copies of the conversation.
Revolutionary in increasing transparency and trust – especially in industries prone to mismanagement and abuse of power – blockchain has unlimited potential in business transactions.
From source to shelf
Arguably, one of the most exciting applications of blockchain is the opportunity to encourage more ethical consumer behaviour.
Partnering with the UNDP, Dutch NGO, the FairChain Foundation, has developed ‘The Other Bar’ – a more equitable chocolate bar.
Inside each wrapper is a code that buyers can scan. By doing this, they not only donate a blockchain token to the farmers who produced the cocoa in their bar but are provided with the exact GPS coordinates of the harvested cacao tree where the bar came from. Usually receiving only a tiny sliver of the profits made from supplying other manufacturers, each token provides the farmers with a quarter of a new cacao tree to be planted for the next harvest.
Other projects, like the Trademark’s Trade Logistics Information Pipeline (TLIP) aim to overcome the ineffective tracking systems damping the appeal of many small holders’ produce from East Africa in the global market.
As an example, introducing blockchain technology enables all parties involved in the selling of coffee beans to the EU to access the same source information. By providing an easy solution to having the right documentation in place, the TLIP system offers a way for East African countries to resolve their efficiency issues, clear produce through customs quickly and become more competitive.
Blockchain is also just what the doctor ordered.
Earlier this month, the Afghan Ministry of Health unveiled details of its Smart Medicine pilot project. Working with blockchain startup, Fantom, the project aims to keep track of pharmaceuticals from manufacture to patient-use, stemming the rise of counterfeit products flooding the Afghan market. Shockingly, one in 10 medical products in developing countries is substandard or fake according to the World Health Organisation.
In blockchain we trust
A recent World Economic Forum report also highlights the ways in which blockchain can help tackle government corruption by supplementing existing processes with tamperproof record-keeping. Many applications apply, from public procurement and transparent electronic voting to the awarding of government grants and subsidies.
Fighting #fakenews in the run-up to this year’s US presidential elections, Jack Dorsey, CEO of Twitter, recently affirmed the need for more transparency from social media platforms saying fact-checking “should be open source and thus verifiable by everyone.” Given time to mature, Blockchain technology could prove crucial in making this a reality.
However, there are obstacles ahead.
Blockchain is still in its infancy. Mass adoption and education around its full potential is a long way off. And blockchain isn’t perfect. As with most technology, regulation struggles to keep pace with innovation. The annual energy required to compute and process some types of transaction are also comparable to the demands of a small country. In 2018, it was estimated that mining Bitcoin consumed as much electricity as Ireland. But, given time and enough willpower we can hopefully overcome these issues. In a word where brands are increasingly only as good as their word, and consumers demand authenticity, blockchain could prove to be a saving grace.