Bitcoin is a mere drop in the ocean of blockchain opportunities: We're already thinking outside the box

 
Graham Richter
Follow Graham
Source: Getty

London Blockchain Week kicks off tomorrow, bringing together experts from around the world to share their new and exciting applications for blockchain technology.

It marks an important moment for blockchain’s move to the mainstream, with several indicators suggesting that 2018 will be a tipping point for the innovative technology. Big businesses are already starting to move from experimentation to piloting real world use cases – most of which is in industries outside financial services.

Although made famous by bitcoin, blockchain is, in fact not a payments technology. In its simplest form, it’s a ledger that multiple parties can see at the same time.

Read more: Brussels promises "soft touch" blockchain regulation

The transactions are shared equally between all participants and no one owns the master copy. New information can only be added if the other parties agree, and no one can ever go back and change it. There is a full audit trail that everyone can see. Unlike traditional ledgers that prevent tampering by adding layers of security on top of a database, blockchain weaves the security into the data itself.

Blockchain’s combination of immutability, consensus and security means you can trust the data coming from other parties, regardless of whether you trust those parties themselves.

This certainty and trust can help create new levels of transparency within supply chains, manage customer loyalty schemes, verify the identity or qualifications of workers, and create new business models that were not possible before.

This certainty and trust can help create new levels of transparency within supply chains

Imagine, for example, using blockchain in the diamond industry to identify the origin of a stone down the specific pit in a mine – and then trace it all the way to the end customer. An incorruptible record of where a diamond was sourced, its supply chain and its certification, could eradicate counterfeiting and the proliferation of blood diamonds.

It doesn’t stop there though. One of the highest profile stories about food supply chains in recent memory is the horsemeat scandal of 2013. That kind of failure is rare, but think of the average supermarket shelf for a moment: organic, free range, line-caught, free trade – there are many labels stating the provenance of food but no way to verify the claims. However, blockchain could track these products from field to shelf with absolute accuracy and help restore consumer trust.

Blockchain can also help people in a more direct way.

Imagine specialists who work in extreme conditions – oil rigs, for example. Verification that these people are who they say and have the right qualifications is important, but often impractical because of their extreme surroundings. However, storing their profiles securely on a blockchain that is unlocked by facial recognition could solve this problem. The same technology could be applied at airports, banks, and even off-licenses to paperlessly prove who you say you are.

This isn’t just theory. At Accenture, we have helped to create a solution for the United Nations that combines blockchain and biometric data, providing an identity for millions of refugees without legal documentation.

UN soldiers in Haiti distribute food and
Accenture have provided an identity for millions of refugees without legal documentation using blockchain (Source: Getty)

The challenge of proving who you are when every piece of paper identity has been abandoned, stolen or destroyed is almost impossible and prevents refugees from taking jobs and participating in society. Millions of people go through that ordeal every day. However, trials of the blockchain solution will begin this year and could transform their lives by integrating them into society.

We have also developed a platform that uses blockchain to find and track counterfeit radio parts, prompted by revelations that up to 15 per cent of components in some military equipment supply chains are counterfeit. The problem can be far greater in other industries.

Our solution verifies components at source, gives them a unique identifying mechanism – in this case a “cryptoseal” – and then confirms receipt and integrity at every stage of the supply chain. The end customer can see instantly if their product is genuine, and if there is any doubt, they can immediately see where verification was first missed.

With so many other possibilities, financial services probably won’t lead the way with blockchain, despite taking the lion’s share of attention so far.

We predict that consumer goods and natural resources companies may be the first to take blockchain mainstream, because it brings significant value to their heavy reliance on supply chains and skilled people.

That is not to say we’ll see a wholesale move onto the blockchain any time soon though. Like telephones, email and other technologies before them, blockchain will need critical mass to be practical. Everyone in the supply chain, for instance, needs to use it, otherwise there will be blind spots that undermine the data’s validity.

Privacy, performance and maturity of the blockchain platforms will still concern some, as will the ability to regulate and govern it. But progress is rapidly being made.

Read more: This massive private equity investor reckons the bitcoin bubble will burst

It’s an exciting time for blockchain, and any challenges will be overcome. As organisations wake up to this potential, they will discover innovative applications outside the financial services box. No doubt we will hear more of these examples in the months to come.

London Blockchain Week will help to focus attention and advise businesses to embrace fresh ideas that can help them to unlock the value of blockchain.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

Related articles