In an ever-changing digital world, it feels like almost everything we do, particularly as consumers, has some digital process that goes along with it. Be it smart-checkouts, paying using a card machine or buying products without even leaving your chair, we have a digital touch at our fingertips in almost all aspects of our lives.
But what happens beyond that digital face value is often overlooked. What processes exist in the background that ensures that what we are doing is efficient and safe, and how is our data being used?
That’s where blockchain comes in. The term is one that many consumers may not have heard before. In a real-world application, it is the unseen software making the life of an end-user easier, without you even knowing it was there.
What is Blockchain?
In its simplest terms, blockchain is a type of database that takes several records and puts them in a block (rather like collating them on to a single sheet of paper). Each block is then ‘chained’ to the next block, using an encrypted signature. This allows block chains to be used like a ledger, which can be shared and checked by anyone with the appropriate permission.
Blockchain first entered the mainstream in 2008 when a whitepaper was released by developers working under the pseudonym Satoshi Nakamoto established the model.
It expanded from there and, in 2009, blockchain was turned into a public ledger for the first time for transactions relating to bitcoin. Now, blockchain as a concept is being used in industries all over the world for a variety of purposes. From making transactions online easier and safer, making transportation of goods more streamlined, and even to make the food we eat safer for us, blockchain has many uses beyond cryptocurrency.
Concerns over food and drink safety, authenticity and carbon footprint mean that consumers, food manufacturers and sellers want more trusted and transparent evidence of the life-cycles of the food they eat.
The Food Standards Agency (FSA) tested blockchain in the food sector back in 2018. The technology was implemented at a cattle slaughterhouse and was the first time blockchain had been used as a regulatory tool for the food sector. It was a huge success and is now being applied to other areas in the UK’s food industry as a result.
Many British oat farmers are already recording various processes and actions at field level, from shed-cleaning to crop-spraying and harvesting, but often only on paper which is a time-consuming and outdated method.
Blockchain enables the multiple parties growing, verifying and assuring the oats to add digital data about the oats throughout their lifecycle. The parties add digital data to a shared but encrypted register, in a controlled and secure process. All the producers and processers involved in the process can add and access the data according to the permissions they have been granted.
Produce must be dealt with safely, through all stages of industry processes. Bugs, such as E. coli and salmonella, are easily transmitted through the food supply chain, causing one in six consumers in the US, for example, to fall ill and around 3,000 to die of food-borne diseases per year.
This is a huge problem, and the task of transporting food safely is monumental in scale. Blockchain technology is being utilised to make the processes of getting food from the producer to the consumer easier, safer and more transparent than it ever could be previously.
Companies, such as Optel, are using blockchain to implement a traceability system at the item, lot, batch and case level – managing product recalls faster; prevent major disease outbreaks; quickly identify sources of contamination; and gain insight into immediate corrective measures.
On its website, the company comments on the impact of the spread of deadly pathogens. It states: “For food and beverage growers, producers, manufacturers, processors and retailers, this can have devastating consequences on customer loyalty, revenues and reputation. Digital traceability is the missing link that can secure the food and beverage supply chain.”
Blockchain technology has huge applications in the healthcare sector, where a large amount of very important medical data must be stored and shared across the globe.
The use of blockchain in health records has a series of potential benefits and pitfalls. The idea of decentralised healthcare data seems an obvious and useful system that could save lives and improve patient care.
The way that this system could work would see a patient essentially own their health records. They can then grant or deny access to doctors or researchers, preventing unauthorised access, third party resale and tampering.
The problem comes when you consider the scalability of something like blockchain into an already complicated and messy system, and the privacy of the stored data.
Cosima Gretton, clinical product manager at Mindstrong Health, and teaching fellow at University College London, says in a report by Reform: “Data on the blockchain is accessible by anyone, and storing and computing data on the blockchain is slow and expensive.”
A potential solution to this could be the Enigma Project, an off-chain network serving as an extension to conventional blockchain platforms.
Gretton adds: “It allows code to be processed both publicly on the blockchain, maintaining a public ledger of a transaction, and on Enigma’s off-chain network where the data is encrypted. By processing data off-network, the Enigma network can process-intensive computations that remain publicly verifiable on the blockchain.”
Imogen Farham, a researcher Reform, sums up blockchain’s use in the healthcare industry, explaining: “What blockchain does well is present a way forward to transform the relationship patients have with their healthcare data.
“To achieve this, standardising how healthcare data is formatted to facilitate meaningful interoperability between systems would be a good place to start.”
The computer games industry relies entirely on data transference. With the advent of gaming systems such as loot boxes and in-game currencies, it is becoming a complicated minefield of new transactions and data transfers. Blockchain can be applied in a variety of ways to the industry, such as through payment methods for buying and selling games, as well as managing in-game currency accounts.
A game such as Fortnite will adorn winning players with a variety of rewards such as currency, gear, cosmetics and unlockable items.
Blockchain technology could be applied to this integral purchasing framework, potentially adding enhanced transparency and security for players, making cheating more difficult, and allowing inter-game trading and transfers.
Games giant Ubisoft and the Azarus game challenge network have been using blockchain to allow gamers and streamers to engage in challenges using the EOSIO blockchain protocol. It rewards the games with ‘AZA credits’ for watching their favourite streams that are redeemable for in-game items and game-related goods. The platform allows users to create their own rules and challenges using the blockchain platform, maximising transparency and fairness.
A likely avenue for blockchain in the industry, however, is in gambling games. Currently, the lack of transparency, regulatory controls, oversight and the overwhelming power of gambling game companies can allow them to easily take advantage of vulnerable players. Blockchain can add a level of safety and certainty as game results running on blockchain are determined as intended and without interference.
Companies such as Forte are already looking at the prospects of using blockchain. In a blog on its website, Forte comments: “We believe blockchain technology will unlock a new wave of economic and creative opportunities for players, developers, and entrepreneurs.
“The technology’s unique properties map perfectly to the digital nature of games and enable the secure ownership of in-game digital assets, thereby laying the foundation for ground-breaking blockchain- and crypto-native marketplaces and services for the games industry.”
Oil and Gas
Blockchain potentially offers the oil and gas industry a huge boost in the entire transaction, price, trading and payment ecosystem. Supply chain networks are the lifeblood of the industry, and blockchain offers a way to drive efficiency, prevent fraud and help with cost effectiveness.
It has massive applications for the shipping side of oil and gas production. Shipping vast quantities of supplies is a complex process that requires many different parties to participate, signing documents and ensuring the ships are following the correct routes.
Blockchain can streamline this process by creating a secure data exchange on the system and a tamper-proof repository for the documents and shipping events.
Using this system could significantly reduce delays in shipping and fraud, saving billions of dollars annually across the entire supply chain.
The World Trade Organisation has also said that streamlining the process in this way could increase worldwide GDP by up to 5%, and the total trade volume of oil and gas by 15%.
In a white paper published by IBM, the company states that blockchain technology used in oil and gas could “enable faster, permissioned, immutable, transparent and auditable business-to-business transactions among participants in the network and their suppliers, distributors and partners”.
It adds: “Chemicals and petroleum industry executives need to understand how best to extract value from blockchain technologies and develop an adoption strategy.
“Blockchain adoption across the chemicals and petroleum industry and strategic ecosystem suppliers have the potential to transform how companies work across operations on a global industry scale, delivering meaningful value for every participant in the supply chain network.”