Can brands use blockchain to provide their customers value?
The hype and valuation craziness around Bitcoin has died down a bit but there are still intriguing aspects around this cryptocurrency. For starters, what is it built on?
Bitcoin is a currency built with the blockchain, a technology that allows developers to make unique, provable, unalterable “blocks,” attach them together (thus the “chain”), and keep track of every transaction occurring on the said chain. Think about it as a gigantic, shared, digital ledger.
Proponents of the technology are working on dozens of different use cases for the chain. Usually around things that are digital but could be made unique (where normally digital files can be copied over and over again without loss) or around things that are physical but could be associated to a block and thus tracked digitally. The latter is most commonly presented as a solution to all sorts of uses around the tracking of products: containers being shipped around the world and car parts, or any other valuable “thing” that is inefficiently being handed from company to company in multiple steps across borders. This explanation of private blockchains and supply chains gives us a good overview of what the system is currently like:
“With little or no automation, no streamlined communications disaster systems, no real visibility to anything during transport, and built on legacy systems over a century old, it is a pressing public safety problem.”
A more precise and very trendy version of the supply chain case is the idea of tracking the provenance of more organic “things,” like a box of mangoes, a free-range ‘no antibiotics’ chicken, a roll of cashmere wool from a specific producer, or a bag of organic fair-trade beans for a speciality coffee shop. This would empower the consumer to know exactly where products came from, how they were produced, how they were shipped, etc.
Blockchain might be the right solution. But here’s a trick for the next supply chain blockchain idea (or almost any blockchain project) you are guaranteed to hear about: ask if the process is already digital. As we now know, many of these concepts are actually looking at a largely un-optimized and analog system. The benefits promised by a blockchain transition are dependent on first making everything digital (contracts, shipping bills, customs checks, etc.) and then attaching unique identifiers to each element and making everything trackable. This might in theory work well with a blockchain, but think of the hand-wavy/unrealistic/problematic assumption that a massive project would make it all digital in the first place. Now, think of the large scope of what that means. Still sounds simple?