“Blockchain will do for transactions what the internet did for information” and thereby change many aspects of our vertical lives.
The claims for blockchain are impressive.
It is widely espoused, for instance, that blockchain will fundamentally disrupt many existing industries, in particular those which “check and balance” our transactions – think accountants and bankers.
Some claim even greater impact with forecasts of profound change for our currency, all types of supply chains and even democracy.
And giving heed to these claims are a swag of both new and established firms.
Among the new in Australia, are start-ups like Shping which apply blockchain to supply chains. Their goal is to allow consumers to view additional product information prior to purchase. There is also Horizon State, a Melbourne start-up which uses blockchain to provide greater voting transparency in emerging democracies.
On the list of more established players giving attention to blockchain are IBM (whose efforts include a tracking tool for retail chains), Eastman Kodak (repositories for stock images) and Spotify (managing copyrights) as well as a host of blockchain investors such as Google, Goldman Sachs, Visa and Deloitte.
Also sharing this belief that blockchain has the potential to cause significant economic and social change are researchers at RMIT. They contend that blockchain could change how we interact online, who controls our information and shift the incentives that guide businesses and co-operative systems. And they have acted upon this belief by establishing a Blockchain Innovation Hub, claimed as the world’s first research centre on the social science of blockchain.
But what is blockchain and why is it believed so great?
First point, blockchain refers to an underlying technology. It is the digital foundation which supports the offerings of companies such as Shping and Horizon State.
Second point, it is useful to think of blockchain as a sort of distributed digital ledger, designed to be incorruptible and self-executing. IBM describes blockchain as a shared and immutable ledger which records transactions – all transactions – permanently. The name comes from the way this transaction data is stored — in blocks that are linked together to form a chain. The chain grows as the number of transactions grows, with each block having its own timestamp. In essence, this chain is a digital trail and, with the help of a series of algorithms, it is resistant to tampering. This is the key offering and benefit of blockchain – an immutable chain of historical record.
As regards the benefits of uptake, consider the food industry. For reasons of safety, it needs to reliably and quickly establish the provenance of food offerings which, unfortunately, has been all too front of mind with the recent strawberry fiasco. Being able to quickly and accurately identify the source, route and current location of potentially affected food allows a more rapid response as well as a reduction in associated costs.
Also benefitting from blockchain, albeit in a very different vein, are advocates of digital democracy who view blockchain as playing a key role in preventing voter fraud. In offering an immutable, highly accurate digital voter enrolment and counting system, blockchain holds the promise of equitable, democratic elections.
So, how might blockchain impact us vertical villagers?
Taking inspiration from the two previously mentioned examples, our vertical living sector could greatly benefit from reliable supply chains and a dose of digital democracy.
In terms of transparent supply chains, the biggest impact might actually occur before we move in, that is, during building construction. Being able to reliably source materials – and having proof that what was ordered was that delivered – would be a big step forward (think cladding substitution!). Indeed, having verifiable evidence of a product’s provenance has insurance implications also. And the benefits of accurate supply chain tracking continue once the building is occupied, including cost reductions from the harmonisation of different processing systems (there is the potential to reduce costs by one fifth!).
As regards blockchain-based democracy, having a reliable and immutable way of voting (which is internationally accessible) could greatly help our vexed and ongoing issue of proxies (and proxy farming). In fact, already companies like Horizon State are considering different contexts for voting, such as corporate shareholders, and are devising systems to support remote participation while also reducing the costs involved. Similar applications for owners’ corporations could also both greatly increase owners’ participation, improve transparency of committee decision making (via permanent voting records) as well as decrease costs associated with (the currently expensive) special resolution process.
And these are just a few examples of how our vertical living domain might be impacted (benefit?) from blockchain. Already many more applications are emerging in the property industry where an immutable record of sale and rental data could really change the vertical real estate game!