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The three T’s of Blockchain

5th October 2018

Morisons Solicitors Ross HoodBlockchain is a technology which has the ability to transform and disrupt. We have a long history of transforming our industries and society through the adoption of new technologies.

That is a challenge for many established businesses. As blockchain creeps out from behind the long shadow created by its extensive use with cryptocurrencies, its real benefits will start to be seen.

If businesses do not re-engineer their processes, using blockchain, then they may find that their competitors have already done so, and can deliver the same goods or services, but on better margins and with higher profits.

It is not an easy process, and no one should underestimate inertia and the vested interest in leaving things unchanged. But the prize is worth the effort.

The brave will look at all their costs in their business, and the prices they pay for their many processes. The ordering department, the invoice department, the procurement department, the checking department. Just how much of their business is fashioned around the need to check, to deal, to correspond, and to pay?

How much can be re-engineered in small or large ways, to cut costs, speed up trade and payment, and gain a huge advantage over their competitors?

Blockchain offers the prospect of a trusted public ledger, which cannot be gamed and cannot be altered. It is therefore trustworthy, and neither company nor supplier can change one word on it, once written.

Omar Khayyám would be proud. The blockchain finger writes and, having written, moves on.

Blockchain is transparent, in that all or part of that ledger is open to interrogation, at any time and through any medium.

The stored data is open to those who need to use it. So, we can look soon to a position where blockchain has established the provenance and position of assets, encouraging parties to buy and sell on a virtual basis; assisting them in confirming that they are despatched and then delivered, and finally concluding their contract, by automatically debiting and crediting the cryptocurrency accounts of buyer and seller.

Blockchain is already working well in much of that sequence but these end-to-end blockchain contracts are the future, and will usher in trade with less friction, and cost.

So, Trust and Transparency.

How many industries currently fail to convince their customers that they have a complete grip on their supply chain, and so can be wholly trusted? How many cloak their business processes, and do not encourage transparency with their suppliers and customers?

Counterfeiting is a major problem for many industries, and in many countries. Rather than work on shutting down the counterfeiters, instead identify and verify all your production of those goods, and showing the result in a checkable, immutable, public ledger?

Establish and provide good provenance for all that you sell. Be Transparent and create Trust in your Brand (not just for your immediate customer but also for all your eventual end users or any re-sellers of your goods).

Authentic goods need more than just fancy hologram labels (which can, in turn, be faked).  If products can be verified as they roll off your production line, then you leave little room for the counterfeiter.

Your products become Trusted by consumers, a prize much to be desired. Presently, many choose the most expensive product, or the biggest Brand, just because they hope that the larger supplier has a better handle on production and distribution, and a desire to stamp out counterfeiting of their products.

What is a Brand but an expression by its consumer of a confidence in the quality and provenance of its products?

So, blockchain offers Trust and Transparency and so creates the third leg of the stool-Truth.

How much of business friction is created and costs incurred in having to check the truth of what is being said or offered up for purchase?   How much of international trade depends upon evidencing that truth, through a myriad of middlemen and banks with their letters of credit?

So, there you have the trinity of T’s which blockchain can offer.

Blockchain is a distributed ledger, held in multiple places, and worked upon by third parties to keep a permanent record of each new block of data being added to the chain. It creates Trust, Transparency and Truth and that has to be a good thing for consumers, for businesses and for economies.

The challenge is to integrate it into business, as the next disruptive technology.

Perhaps that challenge is akin to the way in which the current online retail revolution was first viewed, when ushered in fully by the dot com boom. An innovation which wasn’t really trusted or understood at first by consumers and which at the time left many high street businesses cold, who dismissed what they viewed as wild claims being made for what it might achieve.

How times have changed! Online purchasing is now becoming the norm.  Join together such online purchasing with the three T’s and you can perhaps see how blockchain can accelerate the wholesale adoption of online purchasing.

The retail businesses which never truly adopted online sales have since died or withered.  They stuck to what they knew best and didn’t innovate, when they still had the opportunity to do so.

Blockchain will become ubiquitous and universal but, meantime, many doubters still question this new internal combustion engine for change.

We are at another turning point now in technology and the race will go to the swift.

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