Blockchain a win-win for industry and economy; not to be confused with crypto

By limiting blockchain with crypto, companies are overlooking its immense benefits and transformational role in various segments

“Half-baked knowledge is a dangerous thing.” This axiom reflects the current scenario where businesses are wary of blockchain since it is closely identified with cryptocurrencies. To resolve misconceptions, a holistic understanding is essential to know what blockchain is all about and its inherent benefits to the industry.

At the outset, it is important to understand that blockchain is a foundational technology that was first used by Bitcoin and later by a number of other entities. Unfortunately, due to the volatility and uncertainty surrounding cryptocurrencies, the connection has become an unwanted burden on the blockchain.

Global Buzz and the Origins

Consequently, one must know other global blockchain users, such as IBM, Google, Goldman Sachs, Deloitte and Spotify, to name a few. Most of these companies are modern or recent entities and market leaders in their fields, registering major milestones annually.

Conversely, it may be that countless traditional organizations that hesitate to use blockchain do not necessarily mark new milestones every year. Arguably, from banking to insurance and cybersecurity to healthcare, distributed ledger technology is shaping global business life today.

The origins of blockchain decode why it is so closely identified with Bitcoin. In 1991, Stuart Haber and W. Scott Stornetta envisioned what later emerged as blockchain in the new millennium. Their early work revolved around a chain of cryptographically secured blocks with tamper-proof timestamps for documents. In 2008, the blockchain’s current history began when Satoshi Nakamoto, a pseudonym for the creator(s) of Bitcoin who wishes to remain anonymous, worked on Bitcoin, the first application of this digital ledger technology.

As a decentralized database, blockchain is a list of records or an electronic distributed ledger accessible to many users. To log, process and verify each transaction, blockchain uses cryptography, thus making transactions transparent, secure and permanent.

Blockchain hosts two general categories. The first is permissionless and open to everyone. The second requires permission, with each participant authenticated by the person or group overseeing it. The second category is further segregated into networks of private and community blockchains.

It is the last category that has enormous potential for all businesses. A TechRepublic Research survey notes that while 70% of professional respondents said they had not used blockchain, 64% believed the digital ledger could impact their segment in some way, with most predicting a positive outcome. Likewise, analyst firm Gartner’s Trend Insight Report noted that business value via blockchain will grow to more than $360 billion by 2026 and surpass $3.1 trillion by 2030.

Thanks to its rich security elements, cybersecurity offers the best growth prospects for blockchain.

The technology is also increasingly used by financial services due to its tamper-proof features that ensure data security by allowing participants to verify the authenticity of files.

Ensuring food safety

Nonetheless, concerns or resistance from companies in other verticals in adopting blockchain may hinder the overall outlook of these industries and the economy at large. So it is time to clear the web of misinformation and low awareness that can affect the economy in various ways. To achieve this goal, one must consider a relatively offbeat example to drive home the point about the critical nature of blockchain for diverse businesses.

One of blockchain’s main features is immutability – especially valued in domains where data protection and product integrity are sacrosanct. The food industry is one such vertical where product safety is paramount due to the multiplicity of stakeholders – farmers, manufacturers, processors, logistics partners, distributors, retailers, certification and government agencies, etc. Through blockchain, food safety can be ensured by tracking goods right from the source to the destination . For example, when customers purchase seafood from any frozen food store, they can track the specific product from the area where the catch was taken across each supply chain section all the way to the point of purchase.

When consumers are made aware of how blockchain supports food safety, they will purchase products without unwanted concerns about food contamination or allied health hazards. Conversely, without blockchain, contaminated food would only be detected at a very late stage. When all stakeholders in the supply chain know that blockchain is in use, each person will be motivated to handle goods more carefully to ensure that the quality and standard of the food is uncompromising.

In addition to backtracking, blockchain helps keep counterfeit goods out of supply chains. As the source of fake or adulterated food can be traced and identified, unscrupulous manufacturers and suppliers of such goods will not resort to risky practices for fear of being caught.

Also, blockchain’s food tracking feature can actively help minimize waste. Delayed product shipments, poor inventory management and inadequate cold chain facilities are some of the causes of food waste. Regardless of the cause, blockchain can prevent it as companies follow all necessary logistics protocols, improving both delivery and inventory management. Since food products are tracked 24×7, it is easier and more convenient to improve efficiency and keep waste to a minimum. Apart from curbing food fraud, this boosts consumer confidence.

Future-proof alternative

Coming back to the benefits for businesses, the biggest one is that blockchain can dramatically reduce transaction costs. For now, records that are kept private remain distributed among various internal units. Consequently, reconciliation of transactions across different individual/private ledgers can be error-prone and time-consuming. In the blockchain system, however, ledger entries are replicated in chronological order across multiple identical databases hosted by members of each group. Essentially, changes in one copy are updated automatically and simultaneously in other copies.

Given its unique capabilities, if deployed across industries – finance, manufacturing, services and more – blockchain can reshape the Indian economy by reducing transaction costs. As new-age ecosystems such as the metaverse hover over the horizon, blockchain is the perfect medium for businesses and the economy to be future-ready.

In conclusion, another axiom puts the matter in perspective: ‘Love of money is the root of all evil.’ Just as there is nothing inherently wrong with money except excessive greed for it, the same is true of concerns about blockchain. Truly a universal foundation for cryptocurrencies, blockchain can be used for positive purposes to promote the safe and secure operation of all businesses as well as the economy as a whole.

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