As she builds her blockchain-based marketplace for her fellow Afghan entrepreneurs, Roya Mahboob is putting into practice what many are just beginning to realise: blockchain is going to reshape pretty much every business out there. If there are contracts and payments involved — and that’s true of most industries — then blockchains can play a key role.
“You can't go to a client meeting any more without blockchain coming up,” says Carmina Lees, an Accenture Managing Director whose interest in blockchain stems from her cyber security background. That’s because distributed ledger technology uniquely combines many attributes that are beneficial to businesses. One such attribute is smart contracts, which can automate logical workflows between businesses and execute a financial transaction when certain conditions are met, such as a copyrighted song being sampled, a shipment arriving, or the scribbling of an electronic signature.
On top of this, blockchains are tamper-proof, easily enforceable, and transparent: everyone who’s taking part in the transaction can see when and how it goes through, even if certain types of personal information are kept obscured to ensure privacy.
Manufacturing and supply chain industries are likely to see the most immediate benefits, with financial services taking more time because of the tight regulations and complexity of legacy environments, says Accenture Managing Director Sarah Hazzledine, who advises financial services companies on adopting blockchain and other technologies.
“It's such an interesting technology that solves a fundamental problem, which we've had since the start of the Internet age really, which is: How do you exchange digital assets?” Sarah says.
Blockchain technology can build an electronic ledger into any kind of digital asset from songs to currencies, keeping a record of when and how that asset is used, Sarah explains. If combined with automatic payments, the business opportunity is significant.
E-commerce, the industry that Roya is entering, is ripe for disruption in many ways. Firstly, it relies heavily on online advertising, which may be about to be transformed if the Basic Attention Token (BAT), which is built on the Ethereum blockchain, takes off. This token, paired with a special browser called Brave that tracks user behaviour, rewards people for the time they spend paying attention to ads. It’s already possible for Brave users to donate BATs to their favourite YouTube stars.
Blockchain technology can also help businesses, including online marketplaces, protect their data and assets. The decentralised nature of blockchain technology means that there is no single point of attack, and the high level of encryption is virtually impossible to hack. It’s also possible to design blockchain-based businesses that only permit certain people in the company to have access to certain data, which adds an extra layer of security and privacy protection.
“Effectively, each piece of data can be individually encrypted, so there's no keys to the castle that you can break,” Sarah says. Other services can then be layered on top of the simple code allowing people to buy and sell.
“We’re nearing a real inflection point when the whole space of blockchain is about to take off,” explains Peter Bidewell, a Blockchain technology advisor for Accenture.“Unlike most other things that you can just plug and play, this is a combination of technology, economics and sociology,” he adds. “That’s one of the hardest things because we’re requiring businesses to flip their model. Rather than centralising and locking data down, Blockchain is saying: ‘Let’s decentralise and open up.’”
While Roya isn’t yet able to share the full details of her own forthcoming marketplace, she will say that it will incorporate smart contracts and insurance, and allow entrepreneurs to lend to each other.
Other blockchain-based e-marketplaces emphasise different innovations. Soma (short for Social Market) is a Finnish blockchain start-up that began selling its Soma Community Tokens (SCTs) in late September 2017, and reportedly raised almost a quarter of a million US dollars in the first 48 hours. (Initial Coin Offerings, in which blockchain start-ups sell their tokens, as if they were company stocks, are analogous to the Initial Public Offerings that are held by traditional companies looking to become publicly traded.)
The idea behind Soma is the elimination of marketplace fraud, and it focuses on the provenance and authenticity of the goods sold, with users able to verify information about each item. Users can earn extra tokens by playing an active role within the platform by liking and sharing posts, and following other users. A guitar player might be able to earn extra tokens by sharing an ad for a guitar with her followers, for example. The platform’s designers intend for this system to increase trust, accuracy, and efficiency, although the results are yet to be seen.
Blockchain-based services enable a whole new level of automation in many industries, and when combined with the Internet of Things, artificial intelligence and machine learning, the implications are limitless.
It could soon be possible, for example, for a self-driving taxi programmed via a blockchain to start making financial and strategic decisions without human intervention. This car could hold on to a proportion of each payment in order to pay for its own maintenance, drive itself to get repaired, and even book itself into long-term storage or relocate to another city if needed.
Blockchain is complex and fast-moving, but Roya provides a model for how it can be best incorporated into a company’s plans: stay ahead of the competition by constantly researching the latest developments. Don’t be afraid to break new ground with an experimental idea that’s never been done in a certain region before. And when there are challenges, as there always will be, persevere. The rewards will be worth it.