UNDERSTANDING BLOCKCHAIN WITH USE CASES
You don’t need to understand blockchain to understand blockchain’s benefit.
Blockchain technology seems to be an elusive beast that has given rise to many questions about the internal plumbing that makes a technology like this work. Well, here is my answer:
Every day I get to work, pull out my laptop and start my work for the day. For the next 8ish hours I click and type away on this device that allows me to do my job. I probably use roughly 10 applications per day: Google, Microsoft word, Gmail, etc..., all of which I am very familiar with. Familiar in the sense that I know what buttons to click to get what I want. I know what I need to input in order to get a certain output. Do I have any idea how the inner network systems of my laptop operate? Well I know there’s a hard drive and a battery, maybe some RAM. Do I have a thorough understanding of what happens inside my laptop when I open an application to make it appear on my page? Absolutely not. Is it necessary for me to understand the internal processes that allow me to complete my tasks efficiently? No.
That is what I believe a lot of people are missing with blockchain technology. Too many people are fixated on understanding how blockchain actually works. Why all the hype? Well, it is actually a complex string of coding, akin to rocket science. So it is not surprising that most people get confused in the process and miss the possible solutions blockchain can provide.
Take email. I know that when I open my Gmail application, type in a message and hit send, that message will be delivered to the recipient. I do not know the process it takes to get to their inbox.
In the sports industry, I think of the relationship between the athlete, their agent and the team. This relationship relies on trust. The athlete needs to trust their agent when it comes to the offer a club might be making; the club needs to trust that the athlete is in good health and can meet their needs; the agent needs to trust the team can deliver on their offer while managing multiple athletes. Then you add in the rules and regulations that come from a league, a federation or a player’s association. All parties have to make sure they are in agreement with these rules when coming to an arrangement as well.
Some athletes admit to writing multiple offers down on a napkin while on the phone with their agent, trying to decide which might best suit them. Team owners and managers spend hours signing documents to manage the athletes they are bringing onto their team, sometimes up to 25 signatures per athlete. Therefore management is spending less time planning out their teams winning in-game strategy and more time on redundant administrative tasks. It can be messy, signing an athlete to a team. It is definitely not as simple as opening an email window and hitting send.
That is why I think blockchain can help.
The entire premise of the blockchain is based on the fact that every single interaction (whether that be alike, comment, transaction or edit) is recorded into a system that is unchanging and permanent. Those recordings go onto the blockchain and become immutably embedded.
The result: trust.
All parties involved in a transaction can trust that the other parties are being truthful. The team, agent, and athlete have the transparency to view all interactions during the negotiation and can only proceed once everyone agrees.
Negotiating a deal between an athlete, agent and team becomes easier when the record of changes, contract versions and agreements are recorded into a single version that cannot be altered.
Energy: Problem - 90% of energy trades were mismatched, now they are agreed on the blockchain and redundancies are obsolete.
Visa: Problem - cross-border payments previously took up to three days, now they can happen in real time with smart contract automation and blockchain
Diamonds: Problem - unbeknownst to the buyer, the mining of diamonds continues to cause a variety of human rights issues, now De Beers is able to track the importation and sale of diamonds
Supply chains: Problem - food poisoning outbreaks can take food retailers weeks to find the source, now IBM and Walmart have partnered to monitor their food supply chain and track food’s origin in an instant