3 Surprising Ways Blockchain Could Transform Commerce and Disrupt Uber

June 27, 2016     By : Sofia

Blockchain technology continues to make headlines. It seems nearly every global financial institution nowadays is involved in blockchain-related initiatives one way or another.

We have been reviewing the blockchain ecosystem for quite a while now and have seen interesting if not outright promising solutions for authentication, blockchain-as-a-service, open-source blockchain, application development, mobile wallets, compliance and trading and investment. But blockchain still has a reputation as bitcoin’s backbone; that would be selling it short. Here we’ll talk about three fascinating ways blockchain could transform the $10 trillion global commerce and retail ecosystem.

1. Anti-counterfeiting

Counterfeits are a big business affecting everything from pharmaceuticals to Nike shoes. STOPfakes.gov suggests that roughly 7-8% of world trade every year is in counterfeit goods. That is the equivalent of as much as $512 billion in global lost sales. And that’s one of the more conservative estimates out there. The International Anti-Counterfeiting Coalition estimates that in 2015, the projected value of global trade in counterfeit and pirated goods hit ~$1.77 trillion. Of that amount, US companies lose between $200 billion and $250 billion.

The scale of the problem means there is an enormous opportunity. UL, a global independent safety science company, broadly divided current anti-counterfeiting solutions into two categories: 1) Verification without any special equipment (e.g. unique label or a hologram), and 2) Verification with specialized tools/skills (e.g. watermarks or temperature-sensitive inks).

However, modern manufacturing techniques are now so sophisticated that it is now relatively easy to outwit both classes of anti-counterfeit solutions. UL believes that blockchain could power the next generation of anti-counterfeit solutions.

UL lays out a way blockchain can be used to fight counterfeit: “<…> Along with the physical transaction, shipping of the product, the manufacturer will also perform a blockchain transaction. To perform a blockchain transaction the sender will require two things: a private key to sign a message and the receiver’s digital address. The message to be signed contains information about the sender, the receiver’s digital address and any other relevant data such as product characteristics.

On a high level, the sender computes a hash of the message and signs it with its private key. The signed message, the unsigned message and the sender’s public key is sent to the blockchain network. The members of the blockchain network verify the hash and upon verification add the transaction to the latest block in the blockchain. <…>.”

Here’s a real-life example already in the works: Block Verify is a company that allows companies to verify if they’re in possession of counterfeit products, to identify if a product was diverted from its original destination, to trace and locate stolen merchandise and to track fraudulent transactions. Using Block Verify, businesses can create their own register of products, and monitor the supply chains.

As Pavlo Tanasyuk, Founder of Block Verify (and Co-founder of an outer space banking idea called SpaceBit), commented, “We are not hashing the full history of ownership into bitcoin blockchain, but using our own private blockchain. We use bitcoin as a trustless environment to confirm important events within our own chain. In that sense, we are creating a system that is transparent to the level that we want it to be. What is more important is that it generates trust and a certain level of transparency between manufacturer, supplier, government and consumer.”

Other examples of companies applying blockchain to anti-counterfeit solutions are Verisart (physical art), Monegraph (digital art) and Everledger (diamonds).

2. Review verification

In the age of hyper-connectivity, the digital word travels fast and online peer reviews and endorsements have become critical in shopping, travel and anything else reliant on Web searches. Blockchain technology can be applied to enable authenticity of reviews for products and services or even people.

As ratings and reviews vendor Bazaarvoice shared in its blog, “Consumer reviews are one of the most influential – and trusted – forms of word-of-mouth because reviews are written by people “like us.” In fact, 71% of people read consumer reviews before making a purchase.”

Yet fake reviews are ubiquitous. Back in 2009, consumer electronics manufacturer Belkin got caught in accusations of rewarding marking of negative reviews as ‘unhelpful.’ Even Yelp has been actively questioned for faking practices. Fake reviews are so problematic that Amazon aggressively fights them and even Bazaarvoice has a team dedicated to eradicating them.

Again, blockchain to the rescue. How? Applying distributed ledger technology to reviews can deliver trustworthy endorsements. The World Table, for example, launched an Open Reputation, a quantified reputation system to aggregate reputation data and report trust scores for individuals and organizations. As John Carosella, CMO at The World Table explained, “The Open Reputation architecture mandates that identities and reputes (reputation events – things like ratings) are indexed (and in some cases stored) using blockchain technologies so they’re not forgeable and not “owned” by any single player.”

3. Ride-sharing

In the ride-sharing industry, two dominant players lead the pack: Uber and Lyft. Both are brands that consumers and drivers trust to match supply and demand. But this could be disrupted by blockchain. If you can authenticate a driver or rider without Uber, which is what very early-stage players Arcade City and La ‘Zooz are hoping to offer, doesn’t Uber become unnecessary? Drivers can even make more money.

Arcade City’s Founder Christopher David bluntly elaborated on the problem in an extensive interview with Bitcoin.com, “A bunch of eggheads in San Francisco are right now centrally controlling rates for hundreds of thousands of drivers around the world. Yeah, we think we can improve on that system. Drivers and riders can agree to whatever method of payment they like. We won’t know about it, won’t get a cut of it, won’t care.”

More exciting examples of blockchain applications and companies can be found here.

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Sofia

Sofia is a contributing writer for LTP based in New York. She is a market research professional skilled in data analysis and visualization. Sofia has an extensive experience in consumer behavior studies and marketing analytics. She is passionate about disruptive startups with innovative business models that are having a powerful impact on the industries.

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