By Anas Al Tayyan | Staff Writer

When the word “blockchain” comes up, one immediately thinks of bitcoin and other cryptocurrencies. While cryptocurrencies do rely on blockchain technology, they are not synonymous. Blockchain is a distributed ledger that holds transactions and is connected by a peer-to-peer network. It is like an electronic notebook that stores information in the form of blocks (hence the word blockchain). What differentiates this network from others is that there is no central authority that solely controls the blockchain.

Each user, known as a node, maintains a copy of the ledger. One crucial feature of blockchain is the fact that recorded transactions are immutable, meaning that records of transactions cannot be changed or tampered with. Moreover, each recorded transaction needs to be validated by the majority of nodes; in other words, the transaction needs to be verified to ensure it is correct and does not violate any of the consensus rules that are set by the specific blockchain network. For a person to access a public blockchain, all they need is to create a digital wallet – a device or application that stores cryptocurrency and allows interaction with the blockchain network. However, some business blockchains are permissioned, meaning access is restricted to authorized users only (Investopedia Team, 2024). The process is virtually simple and does not require technical knowledge.

Another characteristic is that all transactions are available to be viewed by the public; it is important to note, however, that the user’s identity is not revealed; only their wallet’s public address, which is similar to a bank account number but for the digital wallet that can be shared with people to receive crypto. The blockchain also contains a feature known as the smart contract, which is an automatic program that executes when the set conditions of a contract are met. In the business world, this tool can be utilized to make business processes more efficient and effective. Furthermore, it can be used to ensure that only specific personnel are allowed to issue transactions (Berryhill, Bourgery, & Hanson, 2018).

Due to these characteristics, blockchain has the ability to integrate into and improve businesses in various ways. First, a business can record information about their individual products on the blockchain. At first glance, this might not sound special. However, taking into consideration the secure, immutable, and transparent nature of the blockchain, it becomes a valuable tool in the business. For example, let us look at the pharmaceutical industry where a small mistake can affect the livelihood of thousands. In this case, manufacturers of medicine can record information such as ingredients, production date, expiry date, and recommended dosage on the blockchain. This simple procedure would prevent retailers from tampering with the expiry date, ensuring that consumers are getting their rights by providing them with accurate information. The customer can then scan a QR code that links to blockchain-stored information about the product, such as its origin, expiry date, and shipping conditions. In some cases, this information may be embedded in an NFT, but a standard QR code is typically sufficient.

Another application of blockchain in the business world is in car dealerships. When people buy used cars, there are a lot of problems they might face. The car may not have the required documents, the seller may lie about whether they had any modifications performed on the car, or the car might not even be their property. The buyer, on the other hand, might not reregister the car and use it to perform illegal activities, which would then cause problems for the seller.

To solve such discrepancies between reality and the seller’s or buyer’s information, the Danish Tax Administration (SKAT), in collaboration with Nets, the company that provides payment services, decided to implement a blockchain based solution that would prevent the mentioned problem: Vehicle Wallet would allow all data pertaining to the car to be recorded on the blockchain network. Due to the nature of the network, the data cannot be tampered with, ensuring there are no discrepancies in the whole process.

Furthermore, smart contracts, alongside permissioned access controls, can ensure that only government regulators are authorized to enter vehicle registration information, preventing unauthorized changes by vehicle owners. The seller can transfer ownership by initiating a transaction on vehicle wallet. The buyer would then view the offer using their digital wallet. If the buyer accepts the offer, they can upload required information such as a bank guarantee and accept the offer. It is important to note that only members with permission can view the guarantee. The buyer can only accept after they have fulfilled the necessary requirements, such as uploading a bank guarantee, as stipulated by the smart contract (Berryhill, Bourgery, & Hanson, 2018). The implementation of this solution will be beneficial in many ways, as it will reduce the risk of fraud, decrease operational costs, and increase the trust between buyers and sellers.

Blockchain can also be integrated into the food supply chain. Suppose you want to buy a can of tuna. How can you be sure that its expiry date is correct, or if

it has been transported under proper conditions? While most governments impose strict regulations concerning food safety, there are always cases of food poisoning that occur because of problems in the supply chain. Examples include the contamination of Kinder products with Salmonella in 2022 (Ambrose, 2022) and the Tesco sale of expired food in 2017 (The Guardian, 2021). A measure to prevent this is digital tracking. The tuna can would be tracked from the moment it exits the warehouse until it reaches supermarket shelves. This can be done by installing IoT (Internet of Things) devices such as temperature sensors and GPS trackers inside the containers transporting the products and connecting them to the blockchain to record information. Hence, if the temperature increases beyond the safety threshold, the sensor picks it up and uploads it on the blockchain (via the smart contract), and since information recorded on the blockchain is immutable, the tuna can’s record will always show that it has been exposed to high temperatures. Each can would contain an NFT, in the form of a QR code, that the customer can access before purchasing the product. The NFT would show information such as expiry date and confirmation that the tuna can was shipped in compliance with health and safety regulations. Therefore, the customer can rest assured that they are consuming safe food. IBM provides many companies with blockchain solutions that allow them to integrate their supply chain on it by tracking raw materials from “farm to fork.” These companies include Walmart (Corkery & Popper, 2018), Nestlē, PepsiCo, and Tesla.

In conclusion, blockchain networks are technology that can heavily improve business processes by making them more secure, efficient, and productive. This is due to the immutable, transparent, and decentralized nature of the network. While this technology is relatively new, it is taking the world by storm and companies may have to adopt blockchain technology to survive in this competitive world.

Sources:

-Corkery, M., & Popper, N. (2018, September 24). From Farm to Blockchain: Walmart Tracks Its Lettuce. The New York Times. https://www.nytimes.com/2018/09/24/business/walmart-blockchain-lettuce.html

-https://www.ibm.com/topics/blockchain-for-business

– Berryhill, J., T. Bourgery and A. Hanson (2018), “Blockchains Unchained: Blockchain Technology and its Use in the Public Sector”, OECD Working Papers on Public Governance, No. 28, OECD Publishing, Paris, https://doi.org/10.1787/3c32c429-en.

-Investopedia Team. (2024, November 25). Cryptocurrency Wallet: What it is, how it works, types, and security. Investopedia. https://www.investopedia.com/terms/b/bitcoin-wallet.asp

– Ambrose, T. (2022, April 8). Ferrero extends recall of Kinder products due to salmonella cases. The Guardian. https://www.theguardian.com/food/2022/apr/08/ferrero-extends-recall-of-kinder-products-due-to-salmonella-cases

– The Guardian. (2021, April 19). Tesco fined £7.56m for selling out of date food in Birmingham stores. The Guardian. https://www.theguardian.com/business/2021/apr/19/tesco-fined-756m-for-selling-out-of-date-food-in-birmingham-stores

-IBM. (2023). What Is Blockchain for Business? – IBM Blockchain. Www.ibm.com.

-https://builtin.com/blockchain