Trust in Blockchain to de­liver smart ways to boost cus­tomer ex­pe­ri­ence

Sunday Independent (Ireland) - Business & Appointments - - FRONT PAGE -

IN the early days of the in­ter­net, evan­ge­lists were try­ing to get peo­ple to be­lieve in its vast po­ten­tial, and there were many who said that they did not be­lieve in this new tech­nol­ogy. They did not be­lieve that in­for­ma­tion would be held on a server, but in­stead in­sisted that it would con­tinue to be held on a CDROM or a floppy disk. How wrong they were. We think that blockchain has a great deal of equiv­a­lence to the in­ter­net in the mid-1990s.

Blockchain is a tech­nol­ogy which ef­fec­tively con­nects peo­ple or com­pa­nies in a di­rect way or on a peer-to-peer ba­sis.

For the past 20 years peo­ple have shared in­for­ma­tion through the in­ter­net. At Con­sen­sys we be­lieve that blockchain, as a tech­nol­ogy, of­fers the in­ter­net of value so that peo­ple not only ex­change in­for­ma­tion, but value from per­son to per­son or on that peer-to-peer ba­sis. Us­ing blockchain, we can now trans­fer own­er­ship of a car, cast a vote in an elec­tion, or trans­fer a share cer­tifi­cate with­out hav­ing to go through a third party such as a bank, a gov­ern­ment or a stock­bro­ker. What we have to­day in so­ci­ety are en­ti­ties that con­trol that trans­ac­tion process, that own the process and insert them­selves in the mid­dle of the process.

It’s im­por­tant to note that there are two main blockchains out there. One is the Bit­coin blockchain that helps makes Bit­coin work. The other form is Ethereum, which was created by Con­sen­sys founder Joe Lu­bin along with Vi­ta­lik Bu­terin and Gavin Wood. Ef­fec­tively, Ethereum is a pro­gram­mable blockchain that al­lows us to build mul­ti­ple dif­fer­ent uses and ap­pli­ca­tions on Ethereum.

Blockchain as a tech­nol­ogy has the power to elim­i­nate that cen­tral­ity and de­cen­tralise the con­trol of this process.

Change is often feared but it is none­the­less in­evitable. The in­ter­net taught us that.

The key fea­ture in blockchain is that any­thing that is stored on the blockchain is there for­ever, the in­for­ma­tion is ‘im­mutable’ and it can­not be erased. This means that the in­for­ma­tion that is stored on the blockchain of­fers us a level of trans­parency that does not ex­ist to­day in the modern world.

It means that if I own some­thing at a cer­tain time, and when I trans­fer the own­er­ship or value of it to you, there will al­ways be a record that I owned it on the blockchain.

It also guar­an­tees that the record can­not be ma­nip­u­lated, ie that no­body else can come in and change the record. Within the in­dus­try we de­scribe it as the ‘trust ma­chine’. So that record then builds trust.

An­other key fea­ture is that it’s de­cen­tralised, so no one per­son or a thing or a gov­ern­ment or an en­tity owns the in­for­ma­tion.

This ef­fec­tively means that I have a copy of all of my in­for­ma­tion but so do you and so does the next per­son. Can you imag­ine a world where ev­ery­one has ac­cess to the same in­for­ma­tion? In­for­ma­tion as we know it is gen­er­ally stored in a cen­tral place, in one lo­ca­tion, where one per­son or com­pany owns the in­for­ma­tion. Blockchain threat­ens that model be­cause each per­son or par­tic­i­pant in the ‘node’ has a copy of that in­for­ma­tion.

This guar­an­tees a level of trust and trans­parency that doesn’t ex­ist to date. For ex­am­ple, if I say that I have €100, and if I then try to amend the blockchain to say that I have €200, then oth­ers will see that this in­for­ma­tion is not cor­rect. It will there­fore show the other users that what I am do­ing is in­cor­rect, fraud­u­lent and that the trans­ac­tion shouldn’t ex­ist on the shared data­base. Blockchain is also de­scribed as a dis­trib­uted ledger. In sim­ple terms, this means that in­stead of us keep­ing one master ledger track­ing all trans­ac­tions and then hav­ing to rec­on­cile dif­fer­ent copies of the ledgers, we can get to a place where there is a shared ledger in the mid­dle that records ev­ery­one who has ac­cess to the book.

A big fea­ture of Ethereum, or the pro­gram­mable blockchain, are ‘smart con­tracts’. They are self-ex­e­cut­ing con­tracts where cer­tain cri­te­ria are met, so a good way to think about that is us­ing an ex­am­ple of travel in­sur­ance. If you buy in­sur­ance — for ar­gu­ments sake, let’s say it’s €100 — and af­ter eight hours your flight is de­layed you are en­ti­tled to make a claim. Typ­i­cally you’ll have to go on­line and fill out a form and you get your money re­funded six weeks later.

So let’s walk through that again, you’ll have paid a fee, you’ve had a neg­a­tive ex­pe­ri­ence and then you have to do more pa­per­work and weeks later you get some money back. That sounds like a pretty ter­ri­ble cus­tomer ex­pe­ri­ence.

So how do we use blockchain tech­nol­ogy to make that a bet­ter cus­tomer ex­pe­ri­ence? For ex­am­ple, would you be will­ing to pay €110 for your travel in­sur­ance if you knew that af­ter eight hours, money owed goes di­rectly into your bank ac­count, and you don’t have to do any ‘life ad­min’. Us­ing a smart con­tract au­to­mates the trans­ac­tion and re­turns the cash to you al­most in­stan­ta­neously.

That is just one ex­am­ple of how blockchain can change the way we do things, and this tech­nol­ogy can be ap­plied to trade fi­nance, sup­ply chain man­age­ment and we are even in con­ver­sa­tions with the EU on how to de­ploy this tech­nol­ogy to re­form our pub­lic sec­tor. There are count­less ap­pli­ca­tions for blockchain tech­nol­ogy. Lory Ke­hoe is manag­ing di­rec­tor at Con­sen­sys

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