Congratulations. You’ve just purchased a new pair of sunglasses online that are now being delivered directly to your doorstep. Two days later, the doorbell rings. You rush downstairs, grab your package, and unbox your glasses. Excitement quickly gives way to disappointment: You’ve purchased a knockoff. And, to make matters worse, you research the product only to discover the manufacturing company responsible has recently been implicated in a string of ethical violations and labor abuses. You think to yourself: “There must be a better way to do this.” There is.
The above scenario is one of many examples of the growing need for transparency in the world. With an estimated $460 billion USD worth of counterfeit items inadvertently purchased in 2017 alone, it’s increasingly apparent that consumers are largely unaware of the origin of their purchases. With blockchain technology, however, we have the power to change that. Below, we outline three different ways that transparency will play an important role in the blockchain ecosystem so that you can come away with a greater understanding for how this extraordinary technology will change the way we interact commercially.
A product may bear a familiar name, yet come from an unexpected source. The French have strict regulations about what vintages of wine can be called Bordeaux and what types of cheese can claim to be Gruyere. The United States is closer to the United Kingdom than it is to France in terms of such labeling. As a result, it can be difficult to determine if you’ve actually purchased what you believe. Roughly 95% of “San Marzano tomatoes” for example, are not what they claim to be.
A fully blockchain-integrated supply chain, however, would let consumers in a grocery store check that their tomato sauce came contained only genuine San Marzanos. Imagine the potential impact in mitigating health risks in food production. Following rampant E. coli outbreaks that all but halted the buying and selling of romaine lettuce in the United States, blockchain technology would have allowed consumers to track the viability of their produce from farm to table — potentially saving countless lives.
Payment giants Venmo and Paypal have undoubtedly transformed the way we send money. While convenient, however, centralized payments systems are far from perfect. At present, an average Venmo transaction can take anywhere from one to three business days to finalize. And should they need their money instantaneously, they would have to pay a premium to do so. With blockchain, however, transactions occur almost instantaneously between buyer and seller. When funds are transferred, that interaction is immediately recorded on a decentralized ledger.
Interestingly enough, the ability to record payments is only half of blockchain’s potential to increase transparency in financial transactions. In some cases, it’s more vital to record the payments that haven’t been made. Take, for example, the Panama Papers, which revealed financial wrongdoing on a shocking scale: billions in hidden funds and hundreds of thousands of shell corporations. It took hundreds of journalists to even begin investigating the 11.5 million documents leaked from a shady financial firm. Blockchain systems, by contrast, can seamlessly track payments that might make such tax dodges significantly more difficult.
Record-keeping sounds dry, but it’s foundational to civilization. Much of what we know about the vanished Minoan civilization we know because we can read their accounting script, Linear B. Unfortunately, moving records between groups, individuals, and nations hasn’t gotten easier. And although modern-day ledgers aren’t nearly as difficult to decipher, they can be equally complicated.
Take healthcare, for example. Interoperability is one of the largest challenges facing medical professionals today. Unfortunately, health records produced at one hospital may not transfer well to another — let alone insurance companies or specialist vendors. Blockchain’s transparency, however, has the potential to reduce complications, speed transfers of information, and ensure the accuracy of patient records. Just as some firms have already begun using distributed ledgers in their supply chains, so too are plans afoot to streamline medical records via blockchain.
Blockchain is a young technology, and one with far more potential uses than those outlined above. Beyond medical records, supply chains, and financial transactions, firms are already using distributed ledgers in art, music, intellectual property management, ticketing, and more. As a new year dawns, who knows what blockchain will accomplish next?