Becoming an enterprise solution
For the general public, blockchain might be synonymous with Bitcoin. But for businesses and government, blockchain development has quietly marched to open up an expanding range of applications. One developer network for Ethereum, a public blockchain that allows for instantly executable smart contracts, has over 10,000 nodes in more than 40 countries. It’s this sort of network effect that Brody believes will push the trough of disillusionment through to the “slope of productivity”. That happens when novel technologies have become commonplace enough that people start seeing their benefit in solving real problems, not just ideas traditionally relegated to the realm of science fiction.
“We are very close to being there today, where blockchain solutions can handle private transactions and business enterprise procurement.” This effectively opens up blockchain to a wide number of use cases, where multiple parties will be able to transact across multiple platforms. The big difference now is that it can be done in private, essentially meaning only the proof of the transaction is public, not the details. As an example, smart contracts on the blockchain could upend traditional notions of car ownership. Imagine you buy an EV that is in turn linked to the grid. A power company might retain the rights to your battery so they can connect it to a series of other EV batteries, operating it as a generation or storage asset as needed. The car owner, in turn, gets paid for the use of that battery. The car could also be contracted by a ride-sharing company, allowing the owner to lease it when the car sits idle. It’s a relatively simple example of automated fractionalised ownership enabled by blockchain, with real-time analytics and full financial transparency.
For governments, which are highly decentralised and often without efficient means of knowing how they are spending their money, blockchain can help quickly and transparently answer questions of what funding is being spent on, how and when is it being spent, and what outcomes are being achieved. EY teams have helped The City of Toronto develop a blockchain proof-of-concept for its Fleet Services, aiming to streamline some of the 850,000 transactions related to the city’s vehicles.
Solving network problems
For private enterprises, Brody believes that the most affected industries will be those that have large sets of business relationships with networks of suppliers. “For Australia, those will be export industries such as agriculture and mining, and manufacturing industries. These are business that are driven by complex relationship across many layers of suppliers. We'll also eventually see an enormous impact in financial services.”
In the agribusiness sector, for example, producers of Australia’s extensive $14.6 billion meat product exports are able to control what happens during the food production process on their farms or as part of on-shore processing. However, as those goods leave Australian shores and are processed by importers, distributed to wholesale markets and finally ending up in retail environments, the control of quality and brand are lost by Australian producers.
Blockchain allows the producer to effectively certify their products as they pass through the entire supply chain. “It is on brands and industries to take a proactive stance to ‘prove’ and ‘protect’ the attributes of their products,” says Waller. “Technology exists that allows tamper-proof unique identifiers to be placed on packaging or into the DNA of produce, that can be tied back to a record on a blockchain that vouches for a product’s authenticity and confirms its supply chain. The burden of proof is going to be placed on the producer to protect their products and to provide consumers increased confidence in their purchase.”