How blockchain is changing our world
Most people without specialist knowledge would link the phrase “blockchain technology” with crypto-currencies such as Bitcoin. This article examines some other uses of the features of blockchain, but which do not directly involve the use of crypto-currencies.
Some of these uses are:
1. Supply chain monitoring
This term covers the sequence of the individual processes along the route from producer to the ultimate consumer of a product or service. For example, the sequence of steps required in the production of a jar of instant coffee from the raw material of the coffee beans to ultimately the jar of coffee for sale on the supermarket shelf. The introduction of blockchain to administer the supply chain is stated to lead to greater control overall for all participants by
- Providing consensus by enabling all parties on a permissioned blockchain to have the same version of data.
- Improving stock control and working capital needs.
- Improving connectability.
- Greater transparency.
- Reducing errors and fraud.
- Improving product traceability and quickly flagging up any issues over quality or contamination.
- Reducing delays from documentation being mislaid.
- Improving the ability to monitor the provenance, authenticity and trust in a product (e.g. the horse meat “scandal” reported in 2013 over the mis-labelling of some brands of ready-made meals and frozen beef burgers sold in some UK supermarkets due to supplier fraud).
- Helping to guard against illicit “counterfeiting” of ingredients of a product somewhere along the supply chain.
- Making it much easier to audit the supply chain and to give greater credence to claims that the product is “from sustainable sources” or is “Fairtrade”.
Examples of using blockchain technology in this area include the US supermarket chain Walmart which has worked with IBM to develop a complete traceability system (called IBM Food Trust) using blockchain technology. Walmart will initially apply this tracking system to the batches of fresh green vegetables they sell in their shops.
Per a memo to their suppliers entitled “Walmart Food Traceability Initiative” and dated 24 September 2018, it states that from 31 January 2019 it will now require all its “direct suppliers” of leafy greens (lettuce, cabbage, spinach, kale etc) to its US shops be traceable on this blockchain and later all “end- to- end” suppliers to be similarly traceable back to the farm by 30 September 2019. Another example is Adelphi Distillery Ltd, the Scotch whisky blender and bottler, which uses a blockchain (developed by Advanced Research Cryptology) to safeguard the authenticity of its whisky (Ardnamurchan) from the risk of possible counterfeiting.
In May 2018, the world’s leading diamond producer (De Beers Group) reported that it had developed in conjunction with five major diamond processors, a blockchain platform called Tracr to enable full tracking of diamonds from the mine, through the various processing stages of preparation ultimately to the retailer. The Company announced that it had successfully tracked 100 high-value diamonds during a pilot run of Tracr and this was the first time that precious stones had been tracked from diamond mine to the jeweller’s shop by using digital technology.
This platform, which is not associated with Bitcoin, uses blockchain technology to give assurance and added confidence to members of the diamond industry (such as diamond traders, merchants, brokers, polishers, cutters, financiers and retailers) on the authenticity and provenance of diamonds they wish to purchase.
3. Art auctions
In the autumn of 2018, the world-famous auction house Christie’s announced that it had achieved an industry “first” by using blockchain technology to register and then track the auction of a large collection of some 42 pieces of American Modernist art with a reported value of $318 million. Christie’s worked with Artory, a specialised software company, to create a permissioned (also known as a private) blockchain to hold publicly available (to those allowed to access the blockchain) encrypted data on each of the artworks such as title and description, auction dates and final price it reached.
However, it does not include information which would identify to users who the owners of the artwork are as this remains strictly private. On conclusion of the sale, the buyer will then be given a card by the auction house to enable them to see an encrypted record of information about their purchase on the Artory registry.
4. Music industry
Major commercial features in this industry are ownership of works (such as songs and instrumental pieces), arrangements, royalties earned and their subsequent payment to artistes and the multiplicity of parties and streams of information which can arise. The music industry has now largely moved from consumers traditionally buying music in a shop (lately in the form usually of a CD album) to having a digital download from a streaming service which is either free or only costs them a small amount. A feature of this major shift has been that the revenues due to artistes for their music has slumped. It is claimed that blockchain, using “smart contracts”[i], can:
- Streamline the process of calculating royalty payments due to the various parties and administering their subsequent disbursement.
- Create and maintain a complete and definitive database of music rights for artistes, songwriters and arrangers.
- Improve transparency.
Examples of the use of organisations using blockchain in the music industry are eMusic, Blokur, Choon, Musicoin and Mycelia.
5. Blockchain government – an example
The city of Dubai in the UAE is working towards the goal of becoming the first blockchain-based government by the year 2020. It intends to digitise completely its services (such as licence renewals, payment for municipal services and visa applications) and make existing paper-based systems redundant. Dubai has also recently introduced its official state e-currency called emCash. Its aim is stated as “efficiency, industry creation and international leadership”.
6. Land Registry
Another use of blockchain is for holding details of land ownership and legal title. For example, the UK government’s HM Land Registry (a long-established government department whose function is to register the ownership of land and property in England and Wales) is working on a project (called Digital Street) to investigate how the use of blockchain technology and smart contracts could improve the services it provides to the public for house buying and selling. The Registry is collaborating on this project with the software company Methods who will use a blockchain platform called Corda.
7. Digital archives
An archive will nowadays have not only paper records but now also digital ones. However, a feature of digital records is that technology is not static but is constantly evolving and that computer file formats originally used to store data will become obsolete. To get around this problem, it will be necessary at intervals to transfer (“migrate”) the contents of a file from the “old” format to a “new” file format so that its contents can still be read in the future.
Clearly, this exercise may be needed to be carried out on numerous successive occasions depending upon the pace and extent of technology change. A potential weakness is that undetected and unauthorised changes could be made to the digital record. How can users be confident that the record available to see or hear today is essentially the same as was originally deposited in the archive? How can they be assured of the integrity of the archive as a keeper of the digital public record?
To tackle this challenge, there is a research project called ARCHANGEL and using blockchain, to show if a digital record has been modified, if so by whom and why it was done so that it can still be regarded years later as the authentic record. This project involves The National Archives (of the UK), the University of Surrey, the UK Open Data Institute and the Engineering and Physical Sciences Research Council.
8. Marriage licences
This must be one of the more unusual uses of blockchain! The first blockchain marriage (a form of smart contract) took place in 2014 in Florida.
9. Marine insurance
A specialised section of the insurance industry has recently developed a private blockchain platform for administering marine insurance and called Insurwave. This will enable all the parties involved in the marine insurance process to be brought together on a single platform for the first time and to improve efficiency in administration. It has been developed together by EY and the software security company Guardtime and is used by their pilot client, A.P. Møller-Maersk (the largest container shipping company in the world) for its fleet of around 350 container vessels.
Blockchain technology is now being increasingly used within the healthcare sector in areas such as:
- Creating one set of decentralised shared registers of vaccines and medicines received by patients.
- Storing data from clinical trials and keeping it secure.
- Guarding against counterfeit drugs.
- Streamlining and modernising medical records to enable more efficient sharing of them in a secure way by health professionals.
[i] Smart contracts are defined as “a computer protocol intended to digitally facilitate, verify or enforce the negotiation or performance of a contract”. (Wikipedia)