Five Future Uses for Blockchain in the Future
The news is full of stories about businesses and governments joining the list of entities seeking to jump onto the blockchain bandwagon. Since the introduction of the concept of distributed ledgers with Satoshi Nakamoto’s whitepaper on bitcoin, the popular imagination has been full of ways to utilize this game changing technology.
This article will look at five future uses of blockchain technology and how these uses could simplify your life.
Supply Chain/Inventory Recording
You purchased fish from your favorite store and grew sick after eating it. You are not sure if this is because of improper treatment at the store or because of a bad batch – in which, other consumers would need to be warned. After notifying the store, a supply chain search is initiated by the buyer, but – after two weeks – the search is still in progress. Meanwhile, 22 other cases of food-borne illness from fish products have been reported statewide.
Tracking an order today can require negotiating many different database systems and dealing with a number of gatekeepers. The process can require juggling an endless stream of invoices, long hours on the phone or over email, and confusion about tracking a single purchase line across conflicting databases. It is for this reason that tracing food-borne illness to the source is a challenging proposition.
What if, however, there was a single ledger that traced an item’s progression through the various databases. This ledger will know exactly where to look for the chain of custody, making tracing a product at any point of its journey from the grower to the consumer a matter of entering the proper keystroke. A blockchain can serve as this type of locator ledger, making tracing inventory a trivial matter.
Walmart, as part of a consortium testing IBM’s blockchain protocol, has developed a blockchain-based supply chain to help monitor its fresh food operations. Fueled by the weeks it took to investigate its 2017 fatal Salmonella outbreak in its papaya shipment, the new system can potentially conduct a similar search in seconds. The blockchain system helps to keep Walmart from needing to develop its food inspection infrastructure in China, which could be expensive and could raise prices for the consumer.
The consortium includes Dole, Driscoll’s, Kroger, McCormick and Company, McLane, Nestle, Tyson Foods, and Unilever – some of the largest names in the American food supply industry. Strengthened oversight of the food supply chain can help to prevent the outbreak of food-borne illnesses, which kills approximately 420,000 people globally annually.
Imagine this: it is Election Day 2030. You just got off from work and are scrambling to get dinner on the table for your family when you remember that you forgot to vote. So, you slip away to the computer, log onto your local district’s election website, punch in the verification code they mailed you last week, make your electoral choices, hit “submit” and … that’s it. You just voted. There are no long voting place lines for you to stand in, no volunteers to check-in with, no forms to fill out or machines to manipulate. It is just you, a postcard, and your computer.
In Switzerland, this potential future has recently been tested. On July 2, 2018, Zug conducted its first successful blockchain-based municipal vote. Using the trial digital ID system introduced earlier this year, residents could use their mobile devices to vote on city ordinances. A blockchain tied the voter’s digital ID and the registered device that utilizes that ID to a secure vote, which could only be cast by the digital ID’s owner.
In theory, such a system would make every vote traceable, making vote tampering a thing of the past. By tokenizing each vote, only the private key holder – the voter – can cast or change the vote. The vote is publicly viewable on the blockchain, but as no personally-identifiable information is attached to the vote or the public key, the vote is anonymous. Any outside attempt to change the vote would require changing every version of the vote on every blockchain or taking over the blockchain with a 51 Percent Attack, which would be costly for a public blockchain and impossible with a privately-provisioned one.
Best of all, such a system makes voting convenient. Voting could be as easy as logging onto an app. Such a system could lead to no more lost work on Election Days, no more long lines or voting place frustrations, no more “lost” votes, and no more foreign interference in the voting process. It would also mean that more voters could vote, which could radically re-forge the “wheels of power.”
Currently, no nation has an online voting platform. Despite this, groups such as FollowMyVote.com are working to change this. “As democratic societies across the globe are beginning to adopt technology to improve the efficiency of the election process, many people are discovering that certain types of technology can be extremely vulnerable, which may have the potential to unfairly influence the outcome of elections,” FollowMyVote.com wrote on its webpage.
“Only those that are on the forefront of technological advancement realize today what the majority of people will become aware of tomorrow, which is that there was a technological solution that was recently introduced to mankind that has the ability to solve both of these critical issues: the lack of transparency in our elections and the lack of security of our election systems.”
Cross-Border Money Transfers
For most of the history of transnational payments, the process has been a craps shoot. As your payment moved from bank network to bank network, new fees would incur, while shuffling through the endless maze of gatekeepers would slow down delivery of your payments to days – if it makes it at all. For those who survive on international commerce, international remittance, payment, and settlement represented a multi-billion dollars bottleneck that threatens the global economy.
Blockchain could change all of this. By using a blockchain messaging services, payers can send a payment internationally as easily as sending an email. The money to be transmitted can be “tokenized” or exchange for cryptocurrency, transmitted by exchange of the coins’ private keys, received, and reconverted back into fiat currency in a fraction of the time it would take to send the same amount by traditional channels for a fraction of the cost.
Ripple has developed a means to facilitate this. While a decentralized blockchain solution is some time off, Ripple’s “centralized” chain is capable of transmitting large sums to any Ripple user globally in a matter of seconds. Visa has incorporated this technology to its payment service, improving its transaction processing rate significantly, and the world’s choice for real-time payment settlement, SWIFT, has incorporated blockchain into its messaging service.
More importantly, nearly every major nation is researching or conducting studies into how blockchain technology can be integrated into their central banks’ service portfolio. While some – such as the United States – are looking at how blockchains can improve real-time remittance, payments, and settlements, others are researching the benefits of a national cryptocurrency or the payments of government fees and taxes via a blockchain payment option. A blockchain solution could offer an economical solution to making infrastructure improvements without the need of costly replacements to existing equipment.
One of the largest challenges in buying a house should be the easiest. Finding the property’s title and searching it for abnormalities or problems can be tedious – so much so that there is a separate branch of insurance law and an entire industry devoted to it. A proper title search can add hundreds to the final cost of a new house and add months of uncertainty.
Real estate can become – over its history – subject to liens, easements, real covenants, equitable servitudes, and tax obligations. For example, it may be possible that the house you wish to buy is situated on land subject to a Native American land claim case. It is the responsibility of the buyer to know about these claims before purchasing and to “clear the title” accordingly. Not doing so can mean that the real estate purchase can be legally challenged, to the loss of the purchasing capital.
Blockchain technology could simplify the title claim process. Today, a buyer would hire a business or lawyer to search the registry offices for title documents for the property. A blockchain could automatically link all of the documents for a property in a convenient, transparent way, allowing for ready access by anyone.
A blockchain registry system can also help to fight title fraud. Title fraud or house stealing is a common con job where a thief would target a house – usually one that is current vacant – and proceed to sell it using fraudulent title documents which can usually be obtained from an office supply store. The thief would gather information on the owner’s identity, create fake IDs to effectively steal the owner’s identity, place the house “for sale” with fraudulent title documents and actually conduct the sale on false pretenses. Once he/she has received payments, he/she would leave the fake documents for you to file and abscond with your money.
As the house was not legally sold by the owner, you are now on the line for the losses. Worse, if you was to move into this house you unknowingly wrongfully gained, you can be charged with trespassing and squatting. The researcher can also easily spot fraudulent title documents in the custody chain with a blockchain system, eliminating the possibility of fraud.
In one example quoted by the FBI, a Los Angeles business owner would convince hundreds of homeowners that she would help them refinance their home mortgages. What she did instead was create straw purchases for these houses using faked titles. She would pocket the money, make no mortgage payments for the now defrauded property owners, and disappear. A blockchain system could make it easy for any property owner to do a search on their property to see if any claims have been made on his/her title.
Finally, in countries where land ownership is not easily traced – like Brazil – a blockchain can cut through the confusion, making home ownership a possibility for many for the first time.
A significant problem with many governments is that crucial information are stored in systems that are incompatible with each other. As most governments are bureaucracies, one department or agency may choose a database system that meet their needs, but is ignorant of any interconnect requirements for outside agencies. For applications that may need to access databases from multiple departments, specialized retrieval protocols must be programmed in, raising the cost and difficulty of development.
One recent example was the rollout of Healthcare.gov. Due to the need to access IRS, SSA, and HHS databases – as well as the databases of the individual insurance providers – rollout was delayed. This caused undue embarrassment to the government.
A blockchain solution could have mitigated this. A navigator program could find the information or record needed, tokenize it, transmit it through a blockchain messenger to the requesting application’s navigator, and input the data into the application. Any database service connected to the blockchain could theoretically be able to be accessed by any other application on the chain, simplifying cross-system record-keeping.
There are various ways toward achieving “blockchain interoperability.” These includes atomic swaps, side chains, cross chain messaging, and token validators. The difference in value between these, however, come to trust; a blockchain is a trustless system, as in no one gives someone permission to access or add to the blockchain. Permission is assumed by having a valid token and a valid private key. In a trustless world, how can one assure the integrity of your system and the information being added to it?
Due to this, creating a cross-system record-keeper is not as simple as placing a blockchain somewhere and creating links. It would need to be accessible, but secure. It would need to be portable, but comprehensive. It would need to be user-friendly, but easily applicable.
In other words, the ideal system needs to be both an apple and an orange at the same time. While this seems like an impossible challenge, some companies have successfully made it work. Walmart, for example, has developed a blockchain supply chain solution for its mango shipments. Walmart can now trace a single mango from the grower to the customer with just a few keystrokes on a computer.
Once “blockchain interoperability” is fully developed – once you have an apple that is simultaneously an orange – the way information exist will change. No longer will there need to be intermediaries or information brokers to make different systems work. Systems that could simultaneously query multiple databases would be feasible, making decision-making and forecasting a much simpler proposition.