The cryptocurrency boom has faded for now, but blockchain, the technology underpinning bitcoin, has many possible applications and could soon save millions of lives, pave the way for a new global business boom and help combat crime for years to come.
Indeed, while cryptos may have taken the limelight, the real story goes far beyond them.
Blockchain is a database technology that works on the principle of a distributed ledger – a record shared by multiple owners – so that when changes are made by one person, all other copies of the ledger adapt accordingly.
In theory, when designed correctly, these ledgers could help eradicate fraud and accounting errors, and make even the smallest entry into a database (such as which farm a piece of fruit came from) easy to track far down the line.
Why would that matter to humble consumers, you may ask? Consider the E. coli concerns surrounding romaine lettuce in the US last year; with a more robust supply chain to check, blockchain software could increase the quality and safety of the food we eat, even down to ensuring, for instance, that vegetables have not been warmed then rechilled on their way from farm to table.
American retail giant Walmart is already using the technology to keep track of green vegetables, with more than 100 of its supplier farms able to input detailed information about their produce into a blockchain database designed by IBM.
Similarly, blockchains could be the key to making medicines safer by making it easier to track where drugs are from. The technology could help save the lives of the million people who die every year from taking fake medicines, or even help combat human trafficking.
Once you start digging into possible blockchain applications, it soons becomes clear that the technology is bigger than bitcoin.
Free shipping from paperwork
Blockchain could also free shipping from the endless paperwork that currently strangles the global economy, leading to a rise of up to 5pc in global GDP, according to research from IBM.
The digital giant is planning a joint blockchain venture with the world’s largest container shipping company Maersk, with the expectation that simplifying the supply chain could unlock an additional 15pc in global trade volume.
In shipping, blockchain could be revolutionary: there are 17 million shipping containers on Earth, of which five to six million are in movement at any time. Up to 20pc of the cost of shipping a container is simply the paperwork needed to keep track of it.
Professional services firm Accenture tested blockchain software with a shipping consortium, including AB InBev, and believes paperwork can be eliminated altogether. The savings could amount to “hundreds of millions”, says Graham Richter, Accenture’s managing director for UK and Ireland.
“Blockchain allows partners to trust their transactions even if they cannot trust the other parties,” he says. “It has a huge role to play in supply chains.”
Kill bad medicine
In sectors such as pharmaceuticals, the reliability of blockchain could save lives. A PwC report estimates that every year up to a million deaths are attributed to counterfeit drugs globally, 450,000 of which are attributed to medicines for malaria alone*.
Mr Richter says that Accenture has worked with delivery giant DHL to create a prototype that tracked drugs through the supply chain, and adds that reliable tracking “cuts costs, saves time and improves accuracy, and could also save lives”.
Preserve the real deal
Fakes are a constant menace for businesses operating in the luxury sector, and blockchain’s ability to track a product from its origin to its destination will provide buyers with reassurance that they are getting what they have paid for, says James Robbins, chief information officer of delivery company Arrow XL.
“If a product’s journey is recorded in blockchain, from documenting the serial number at the factory to confirming the consumer’s credit agreement and receipt of goods as its own block, there is an irreversible sequence of information that provides absolute certainty,” he says. “This can be used to provide proof of ownership for high-value items, whether for someone looking to buy a classic car or a work of art.”
Protecting the vulnerable
Last June 2018, Reuters reported that blockchains are increasingly being tested for social causes, citing Coca-Cola’s creation of a workers’ registry to fight forced labour, tracking supply chains for minerals mined through exploitation, and even the Moldovan government’s trial to log citizens’ digital identities to combat child trafficking.
The last idea, which won a UN competition, is the brainchild of the US blockchain firm ConsenSys, and links the identities of Moldovan children to other family members to ensure that youngsters attempting to cross the border cannot do so without their guardians’ full consent.
Should you buy into blockchain?
While blockchain technology is still in its infancy, with analyst Capgemini estimating that 87pc of current projects are still at the proof-of-concept stage, and just 3pc being used at scale, its widespread applications are undoubtedly appealing to many sectors beyond the world of finance.
Business logistics expert Prof Edward Sweeney, of Aston University, says blockchain is “just one of myriad potentially disruptive technological developments. The key for all firms is to stay as well apprised as possible in relation to developments so that informed technology investment decisions can be made.”
He cites other technologies, such as internet-of-things sensors in shipping containers, as part of an evolving technology ecosystem that should inform how companies invest in ways to future-proof their businesses.
Even so, its capacity to provide clarity and accountability in an instant, and to minimise the influence and costs of middlemen in so many applications, must put it on the agenda of every board. How, and how much, could it affect your business in the years to come?
*PDF: Fighting counterfeit pharmaceuticals: New defences for an underestimated – and growing – menace, PwC, 2017