Everything You Need to Know About Blockchain Right Now
In my latest blog, I shared five jaw-dropping stats about counterfeit retail and how these fakers are creating some real trust issues between retailers and their consumers, and, retailers and manufacturers. I also shared some good news, an innovation called blockchain that’s about to start a revolution. This technology will reinforce consumer trust so dramatically its gravity is already compared to the impact the invention of the internet had on worldwide communications.
The way we think about blockchain will undeniably evolve moving into the future, but for now, here are the basics that every supply chain and retail professional should know:
1. So, what exactly is blockchain?
Blockchain is an emerging technology that is poised to close the trust gap between buyer and seller forever—essentially guaranteeing the authenticity of a transaction and all the data involved—replacing intermediaries like banks, the DMV, title companies and ultimately connecting retail buyers and sellers.
Ready to talk about another trust gap? With intermediaries even in the most reputable industries, fraud and incorrect information still plagues about 30% of all records. (Yes, you read that right, 30%.)
So, it really isn’t surprising that consumers have trust issues in what is now supposed to be the information age, right? Exactly.
2. What makes blockchain better?
Because with blockchain, every record written has a unique key associated with it that is protected, ‘chained’ and virtually un-hackable. Every record is written and stamped by the trusted party who wrote the record. And when the next record is written, everything from the first record is automatically pulled into the second record – creating a dependency and adherence to the first. This continues in a chain along with the third and fourth and fifth, putting the chain in blockchain.
This technology will provide visibility into exactly who created each record and the dependencies chaining them together.
You’re probably thinking, doesn’t this leave room for foul play? Glad you asked, but you can relax, well, ‘future you’ can.
That’s because if anyone along the chain of trust changes or attempts to fudge any of the records, an algorithm can automatically recognize that it was tampered with and creates an alert. So back to that stat from last week: almost 70% of extra virgin olive oil in the United States isn’t actually pure but cut with cheaper oils than can wreak havoc on those with peanut allergies.
With blockchain, a blended oil from North Africa (a common originator of these imposter virgin oils) would find it nearly impossible to masquerade as an authentic Italian Extra Virgin Olive Oil.
Just for a second, think of all the possibilities for ‘future you’ and ‘future us’. Blockchain is going to start a technical revolution – completely transforming the way we engage in commerce and how we decide which retailers, brands and products to put our trust in to make that purchase.
The consumer experience will change as we know it as much as it’s changed with the development of other breakthrough inventions throughout human history have, like the printing press, the combustible engine, the internet and that (sometimes necessary) app that lets you get coffee delivered.
3. Where is blockchain going?
When we think about how retail is changing exponentially—whether through supply chain transformation, actionable insights from big data via machine learning, or connected IoT devices—blockchain will one day give companies what every business wants from customers. Trust.
And it’s already happening. Fishcoin is a data ecosystem providing blockchain based seafood traceability through fishers and farmers. Fishcoin makes sustainable farming practices, country of origin, and species visible to consumers – ensuring an accurate country of origin and accurate species so customers know exactly what they’re purchasing.
IBM Food Trust similarly makes food traceability possible by tracking products to their source for enhanced food authenticity and safety.
Blockchain will literally save lives.
Think about the retail buyer sourcing products from all over the world—millions of transactions a year—all through blockchain technology. In the future, they will be able to guarantee not only country of origin, but also give the company and shoppers the ability to follow a product’s lifecycle from field to table, or component to finished goods.
Imagine the power of pinpointing growing fields in the event of disasters like bacterial outbreaks to prevent them from creating any health issues or even deaths. In the most recent E. coli outbreak in the USA, it took FDA investigators months to identify just one farm of many that hospitalized nearly 100 people. By that time, the damage was done, but with blockchain in the future, identification can be instantaneous.
The chain of trust will change business forever.
There is no doubt – blockchain will fundamentally change the way we do business. When the technology is widely adopted, shoppers will scan a QR code in-store to see the product’s journey from infancy to their hand.
As Richie Etwaru, blockchain pioneer, titles his book: Blockchain: Trust Companies: Every Company is at Risk of Being Disrupted by a Trusted Version of Itself. Being at the forefront of this technology will be a clear competitive advantage in the continued quest to acquire and keep customers and foster more brand loyalists.
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