Trust is a good business practice.
And trust has never been more important than in today’s hyper-connected, increasingly ethically-aware world.
In fact, trust is probably one of the biggest factors in the success or failure of a business.
It’s not unusual to see large-scale boycotts of brands and businesses that have morally-shady or opaque business practices. Businesses that neglect transparency, appear unsecure, or don’t inspire trust will lose customers or clients.
A good example is the UK meat scandal of 2018. Two big supermarkets were found to be selling products branded as vegetarian or vegan that contained traces of meat. Overnight, trust in these brands was destroyed and sales of those items plummeted.
The reason for this debacle was partly due to flaws in the supply chain and a lack of focus on trust and traceability. These factors simply weren’t on the supermarket’s radar at the time. But you can bet your bottom dollar they are now! They had to learn the importance of trust the hard way.
In the digital age, security, privacy, and honest business practices are more important than ever. When dealing with others online, rather than in-person, reassuring people that your processes are safe, secure and trustworthy is essential. This is true for both B2C and B2B businesses, as we’ll see later in this article.
The good news is, blockchain technology can make a big difference. It can help businesses achieve end-to-end transparency and is set to revolutionise the way business networks operate.
What is blockchain technology?
Blockchain is the technology behind cryptocurrency such as Bitcoin, but it isn’t just limited to finance.
There are literally dozens of uses for blockchain. In fact, although it is still an emerging technology, the global blockchain market is expected to be worth in excess of $20 billion by 2024.
But what exactly is blockchain and what does it do?
Well, the answer is pretty technical and you’d probably need a degree in computer science to understand it in detail. But, let’s break it down to basics...
Imagine Lego blocks and how they can be linked together in various ways. Blockchain is similar, but instead of little plastic blocks, it is made of little chunks of code that contain and store information. If new information needs to be added, a new block of data is created that slots in and becomes fixed in place within the blockchain structure (imagine gluing a lego block into a structure so that it cannot be removed). Each data block is encrypted and cannot be moved or altered in any way.
Often, blockchain structures are referred to as a “ledger”. Typically, a ledger is a book of financial transactions that a business keeps as a record of all its income and outgoings. A blockchain ledger can be used for any type of informational exchange or transaction though, not just financial.
Blockchain technology is very secure. That’s the main advantage of it and the reason why it is used in cryptocurrency transactions. Financial transactions can be quickly made and recorded through the blockchain, which stops data from being accessed or information being changed once the transaction is complete.
The other big advantage of blockchain technology is that it enables different parties to collaborate and share information across networks safely, in a decentralised way. Michael Yuan, chief scientist and co-founder of the CyberMiles Foundation (creators of a public e-commerce blockchain), describes using the blockchain to transfer confidential medical records and health insurance information between an insurance company and a hospital:
“It used to be that people couldn’t trust each other,” Michael says. “They would do all kinds of things to modify the record to get paid—[blockchain] provides a way to assure both parties that data is not being modified, and both parties can access the network securely and look at the records.”
In other words, blockchain technology can help businesses to build and maintain trust. Now, let’s take a look at some of the ways blockchain can be applied to business systems and networks.
Revolutionising business networks and systems with blockchain technology
Let’s make this clear – blockchain improves the security and efficiency of any business operation that requires communication between two or more parties.
Applying blockchain technology is a no-brainer if your business can benefit from any of the following applications:
- Smart Contracts
Automated blockchain-powered programs that manage the terms of a contract. For example, funds can be held in escrow using blockchain until the contract deliverables are met. Blockchain smart contracts are unbreakable once set up and help businesses to achieve greater security, cut costs of administering contracts, and in some cases bypass regulations. In other words, blockchain creates “self-executing contracts” that automatically define and regulate contractual obligations preemptively and on an ongoing basis, unlike the law which only enforces things after the contract is set up.
- Payroll and Payment Processing
Cryptocurrency payments are becoming more popular, especially with international workers. Blockchain payments are fast and secure.
- Electronic Polling
Blockchain can power decentralised voting systems that cannot be manipulated –in theory and only if it is implemented robustly. For instance, if your business wants to gain consensus from stakeholders in a certain project, electronic polling or smart voting can be applied to allow people to vote remotely, safe in the knowledge that their vote cannot be tampered with.
- Traceability and Supply Chain Communications
Also known as “proof of provenance” in business circles, traceability is the ability to trace back goods, or the components that make up a product, to their origin. It helps to engender trust in buyers by proving authenticity and ethical practices. Blockchain technology builds a ledger of transactions for each stage of the supply chain, which cannot be altered. Therefore, it’s like getting a guaranteed certificate of authenticity and auditable records. This is particularly important in the food and agri food industries, where supply chain authenticity is highly scrutinised by both the public and media.
- Safety Testing Records
Any industry that relies on safety or hygiene checks and tests can set up an immutable blockchain ledger to record test results and communicate them between different stakeholders. For instance, a pharmaceutical company could use blockchain to record any data communicated between manufacturers, wholesalers, hospitals, pharmacies, etc.
- International Trade
Blockchain technology provides a secure way to digitally manage quality documents. For instance, Maersk and IBM are trialling a blockchain method of handling shipping documents, which has so far reduced administration costs by an estimated 15 to 20% compared to traditional paper methods.
Build Greater Trust In Supply Chains With Blockchain Traceability
A decentralised, blockchain ledger acts as a single, unchangeable source of information and data.
For supply chain management, and in particular traceability, this is like gold dust. It creates a clear and consistent audit trail across all parties, stakeholders, and vendors. In the food industry this includes farmers, wholesalers, suppliers, logistic companies, and retailers.
The example given at the start of this article – meat traces finding their way into vegetarian food products – could be avoided with blockchain-powered supply chain records, as long as they are implemented well and monitored robustly. Quality tests can be carried out at each stage and recorded securely. Every step of the way, monitoring and accountability is built into the system.
The future of supply chain traceability in the agri food industry. Artos is spearheading online agri food trade and applying agritech such as blockchain ledgers to make premium, sustainable goods available to all. Click here to find out more about blockchain agritech and how our product can help your business.