Blockchain for the Business World and Achievements

In this chapter, we will illustrate the potential of blockchain through several applications that have been implemented in various sectors of the economy. We will discover how blockchain disrupted businesses, bringing transparency and enabling traceability across supply chains, how cryptoassets are redesigning business models with tokenization, bringing liquidity and digital representation of any given physical asset, and, finally, how smart contracts can replace intermediaries and offer seamless transactions between companies and individuals.

Every case presented in this chapter starts with a business issue that enterprises meet and struggle to overcome while explaining how blockchain facilitates resolving the issue. This chapter will illustrate which existing projects and initiatives were created to respond to these business...

Authentication and trustworthiness

Many companies have already been confronted with forged releases on their behalf about their financial health and strategic choices, especially in the digital age where monitoring and preventing fake communications has become more and more difficult. This reality is very common for enterprises whose official and sensitive documents such as financial statements are attentively observed by shareholders, creditors, banks, investors, and public institutions.

Document fraud, in general, is a serious issue for public institutions and governments. In France, it represented an €8 billion loss in 2017, according to the National Delegation to Combat Fraud (DNLF) (https://www.lejdd.fr/Economie/la-caisse-des-depots-engie-edf-et-la-poste-sallient-dans-la-blockchain-3898162). This problem was taken over by KeeeX, a French startup that developed a product...

Interoperability

In some sectors such as banking or insurance, data is flowing between companies and regulators to be able to provide appropriate services to customers. Exchanging data between untrusted parties turns out to be a painful and complicated process, especially because strong regulations exercise caution regarding which kind of data is being transferred between entities.

In this context, it is hard to ensure that an individual's information can be shared properly, in accordance with laws and without friction. For instance, in the case of insurance, customers have to deliver attestations and certificates provided by third-parties institutions such as their unemployment agency, medical practitioners, school administration, or governmental bodies to prove the occurrence of a given event.

Blockchain can erase the friction, in this process, by allowing the exchange of...

Traceability

In April 2019, the world's tenth-largest commercial food retailer, Albertsons (https://stores.org/stores-top-retailers-2018/), announced its involvement in IBM's Food Trust Blockchain to launch a pilot for tracking romaine lettuce, hence joining 79 other brands to the consortium such as Walmart, Nestle, and Unilever. The IBM Food Trust Blockchain is a modular and collaborative network solution gathering economic actors and aiming to tackle major problems within the commercial food chain, such as being able to identify the origin of dodgy products, the primary source of diseases and sanitary scandals, and enabling removal of infected products from retailers' stores without clearing the whole supply chain.

In the food industry, focus on safety is a priority and the traceability of a product has become paramount. In this context, many food producers, suppliers...

Automation, disintermediation, and self-organization

So far, we have talked only about blockchain itself and how it solves authentication, interoperability, and traceability issues in different business areas. We've only addressed problems where decentralized and distributed databases combined with cryptographic algorithms and consensus protocols could advance value transfer and data sharing in a trustless environment to another level.

We showed that collaboration and coordination between competitors could be improved with a decentralized infrastructure empowered by a blockchain. We will now cover business issues that can be solved with smart contracts. As a reminder, smart contracts are computer programs that execute actions when certain conditions are met. They behave as a virtual person, performing actions under the respective code.

In Chapter 3, Ethereum and...

Digital identities

It is no secret that the world is evolving at a rapid pace. Never before have we witnessed so many changes happening in such a short period of time. Urbanization, as a matter of fact, has been accelerating these last fifteen years bringing important demographic and social changes.

Indeed, the population has continuously grown with an even more increasing proportion of the elderly. With 2030 just around the corner and 1960's baby-boomers, we'll reach a population of 8.5 billion people, among which 9% will be over 65 years old. Overpopulation combined with our modern over-consuming way of life has, unfortunately, a terrible impact on the environment. Climate change is a true concern and resource scarcity has been identified as a global trend by the World Economic Forum. But the most evident shift is the technological breakthroughs that impact every...

Smart cities and public issues

Economic, social, technological, and political shifts are reshaping the world very quickly and new challenges arise for nations and particularly for cities. As governments are seeking to incorporate innovations within their cities, blockchain can offer something more.

According to the World Bank, more than 54% of the global population now lives in cities and contributes to more than half of the world's GDP. Because of this, cities are deeply concerned by global shifts set out previously: urbanization, demographic change, aging workforce, and environmental issues.

As a primary environment for a nation's development and wealth, cities must be able to embrace these changes to become a better place to live by becoming smarter, more collaborative, more inclusive, more sustainable, and more connected to provide enhanced services and a high quality...

Financial securities and fundraising

Bitcoin is the first application that triggered the interest of blockchain, the first innovation allowing the transfer of digital value from peer-to-peer, the first cryptocurrency that disrupted the financial sector. By creating cryptographic money that's exchangeable between peers without trusted third parties, Bitcoin has gained the curiosity of those who see this new digital asset a threat to their core business model based on collecting fees upon money transfers as well as providing financial services to customers and enterprises.

Years have passed since Bitcoin came into existence, and today, cryptocurrencies are not the only blockchain-based applications out there that absolutely disrupt the financial sector.

After Bitcoin and cryptocurrencies, we witnessed the emergence of ICOs revolutionizing how funds were raised by entrepreneurs...

Digital uniqueness

The beginning of the 90s brought the internet as we know it today, a network in which computers can communicate using the TCP/IP protocol. Since the invention of the World Wide Web, the first internet-based application, computers have been able to exchange information endlessly across the network.

This mechanism, covered in Chapter 5, An Economic and Historical Approach of Blockchain, is called replication; the nodes (computers and servers) connected to the network (internet) can replicate the information to pass it on to the other nodes. Replication decreases the value of a digital item as it is transferred over the network. With Bitcoin, the world witnessed digital scarcity for the first time. This is how it works:

• First, an initial level of scarcity is induced by overcoming the double-spending problem, ensuring that a digital asset cannot be replicated when...

Blockchain in the banking and finance sector

In the banking and finance sector, blockchain was first perceived as a threat when Bitcoin started to gain fame, supported by an active tech community, before realizing that some serious challenges could be advanced through this technology. Consequently, more and more projects were undertaken that led to an evolution of behaviors and spirits, turning the threat into an opportunity. Today, big actors are trying to get involved, sometimes successfully, sometimes for the sole marketing outgrowth, and sometimes for cautiously experimenting positive or negative outcomes.

As I am writing this chapter, other Fortune 500 companies are about to launch their own blockchain project. Nike is launching its cryptocurrency called Cryptokicks although we do not have much information yet about the project, which might focus on collectibles. Facebook...

Summary

Throughout this chapter, we've demonstrated how traceability and transparency can be fulfilled collaboratively, securing and enhancing the supply chain and asset maintenance in industrial sectors. We also demonstrated how processes can be improved in healthcare and food, how interoperability enhanced security between connected devices, and how undisclosed information could be shared in a competitive environment seamlessly and protectively.

You've learned how blockchain brings a robust authentication on a network to decrease counterfeit and forgery, mainly in the luxury goods industry and in arts. Also, we showed how blockchain enables new business opportunities between competitors, just like in the automotive and commercial food industries.

We also demonstrated, through the different sections, that financial inclusion increased in emerging markets as financial...