If you’ve been hearing about blockchain but don’t quite understand what exactly it is and how it could affect people’s lives, worry not 99 per cent of the public is in the same boat.
Most of us may think that blockchain is the same as bitcoin, the best known of the cryptocurrencies that have taken the financial markets by storm. Blockchain is the technology behind bitcoin and other cryptocurrencies, hoarded by tech whiz kids, but perhaps more interesting are its applications in areas that can help improve the lives of everyone, producers and consumers alike.
First things first: What is (a) blockchain? It is a continuously growing list of time-stamped records (“blocks”), linked and secured via encryption, where each block contains an encrypted record of the previous block, along with data on the transactions that created the new block. Imagine a document – a record of accounts – that is shared across thousands of computers in a network, where the record is constantly updated with every new transaction.
Once recorded, the data in any given block cannot be altered retroactively without altering all subsequent blocks. Thus, any alteration would require that all members of the network agree to the change, implying next-to-impossible collusion on a massive scale. All records are thus virtually permanent and incorruptible.
As such, blockchain is the ultimate in transparency. It also eliminates the need for an intermediary between transacting parties, like a bank to consummate a payment transaction, or a lawyer to seal a contract. With blockchain technology, a buyer can deal directly with a seller online without having to go through Amazon, Alibaba or Lazada, and a rider can deal directly with a driver without going through Uber or Grab.
As each player’s track record is accessible from the blockchain, one doesn’t need an Uber or Lazada to compile data on the reliability and past behavior of the transactors. If ride-sharing apps and e-commerce platforms had disrupted the taxi and retail industries, blockchain is about to disrupt the erstwhile disruptors! It’s the age of disruption indeed.
Out of so many possibilities, I’ll focus on applications in a sector critical to Southeast Asia’s economies, agriculture the sector where the region’s poorest work. It is where primary producers, the farmers, are known to reap the least share of the fruits of their labour. This is largely because they are far removed from their products’ final consumers, insulated by layers of supply chain actors. They also have the least access, if at all, to information on the market, and much of the inequity in the economy stems from such lopsided access to information.
Now imagine if farmers (and all players in the value chains) can access all information on transactions that happen to their products all the way from field to fork, so to speak, via blockchains. Exploitative market practices that leave farmers with the short end of the stick would be curbed.
Agriculture is also a sector where products on the market come from large numbers of producers, with consumers largely unaware of the quality and safety of the products they buy. Was the fruit or vegetable sprayed with toxic pesticides? Did the meat come from a diseased animal? Is a food product labelled “organic” or “Halal” strictly grown according to those standards? With blockchains in agriculture, all that could be readily answered.
We’ve barely scratched the surface on how blockchain can change our lives. I don’t believe it to be an exaggeration when people say that blockchain will be as earthshaking as the Internet itself. It’s not just about bitcoin.