You could be forgiven for thinking that blockchain technology is the mysterious and dark domain of ‘dodgy’ Crypto Bros and people selling pictures of apes on the internet with a promise of making a quick buck.
Being so closely associated with the rise of cryptocurrencies, and their subsequent massive falls, means the blockchain itself is experiencing a credibility crash.
But it shouldn’t be – blockchain is safe, it’s secure and, eventually, it’s going to become part of our day to day lives.
Remember the days before Spotify and Apple Music when we all had to download music and films using online sites like Napster? Remember when staying in hotels were the only way to travel and when you had to phone for a taxi and pay in cash?
Blockchain is a classic ‘disruptor’. Much like the Ubers, AirBnBs and Napsters of the world, it’s going to become ubiquitous once more people start to realise just how useful and convenient it will be.
It essentially stores data, allows it to be verified and it can’t be changed, removed or replaced without there being a record of who changed it and what to. Cryptocurrencies and Non-Fungible Tokens (NFTs) are simply how the new technology came to prominence.
Now many industries are beginning to realise the potential benefits of adopting blockchain technology.
It’s already being used by the fashion industry as part of a growing move towards supply chain transparency and sustainable fashion by allowing consumers to identify where all the different materials their clothes and accessories are made of come from.
Conservation organisations like the World Wildlife Fund are using it to help stamp out illegal fishing and human rights abuses in the industry, while tech giant IBM is working with global retailers including Nestle, Walmart and Unilever to improve food safety by using blockchain to track supply chains and easily identify the source of contaminated products.
But right now, blockchain still has trust issues. It’s so enmeshed in the flurry of bad publicity surrounding the crypto crash that many believe the technology itself is a scam. You might be surprised to learn that blockchain is one of the safest, most secure ways to store, verify and transmit information of all kinds.
No hacker has ever been able to break the Bitcoin blockchain as assembling the amount of electrical and computing power required is prohibitive. There’s also no benefit to breaking it, even if they could. Adding hacked blocks to the Bitcoin blockchain is the equivalent of printing more money – it reduces the value and makes the system itself worthless.
The blockchain is relatively new, it’s complicated to explain and understand, and most people’s introduction to it has come via news stories lamenting the losses of cryptocurrency investors and people on social media pushing NFTs.
So it’s not surprising there’s considerable reluctance to adopt the use of blockchain outside of these early industries, despite the level of security. We make almost every decision based on trust, and when it comes to blockchain we simply don’t know enough to feel confident it will keep our information secure.
This is true of any new technology or system – many people thought the internet was a ‘fad’ in its early days and so-called ‘early adopters’ of ride-sharing and file-sharing platforms faced legal action. Now Uber and Airbnb exist on the internet-connected computers we all keep in our pockets or on our wrists these days.
Consider this - 20 years ago, would you have jumped into a stranger's car? Or gone to live in a stranger's house for a holiday? Part of the reason we feel ‘safe’ doing that now is because of the tracking and transparency benefits these apps have built in.
We know some details about the driver or the host. We know when we booked, where we are. We can share our location with our friends and family. These security and transparency benefits that have been enabled by technology increase our trust and the likelihood we will try something new and potentially risky.
These new technologies have made the verification of trust much more efficient and transparent, creating huge new economic benefits and potential. And that's fundamentally what blockchain can do for a variety of business applications and processes - an efficient means for transparency and as a "trust-enabler".
Transparency and regulation have always been primarily to help buyers to believe and trust that the seller is genuine. Once that trust is established, blockchain will be something we can’t live without.
Dr Rand Low is an Associate Professor of Quantitative Finance at the Bond Business School