Meanwhile, most of the significant interest in blockchain is more mundane – and more important.
For example, it is being used to verify food supply chains. According to New Food Magazine, using the internet of things (IoT) and blockchain can cut massive costs in the industry while improving quality control and food security.
“Within the food supply chain there are different participants involved in each step, from farmers, to processors, manufacturers, certifying agencies, government agencies, logistics, distributors, retailers and so on,” the magazine said.
“Each of these participants shares critical information about the product that sits in their own local server. This information is not accessible to other participants and thus, there is an increased chance of food fraud in the system.
“If a consumer wants to buy organic tomato ketchup, they rely on the label claim. The manufacturer of ketchup relies on the supplier of tomato puree or concentrate processor. The tomato processor relies on the claim/organic certification furnished by the farmer or farmer association. If any of the participants provide a false claim, both the consumers and other participants are cheated.”
Complex financial systems
International trade was the catalyst for much modern banking, flourishing in late Medieval Italy as global supply chains became established over oceans and land routes like the Silk Road.
However, the mechanics of that trade, be it trade guarantees, bills of exchange, letters of credit, have changed little over centuries. Until blockchain.
One trade facilitator, Marco Polo, noted research by global shipping company Maersk which showed a shipment from Kenya to the Netherlands included over 100 actors, 30 people and 200 interactions. Of the 34 days of shipment, 10 days were lost due to waiting for documents.
“Trade finance is truly an optimal use case of blockchain and its transformation will impact and benefit the entire ecosystem,” Marco Polo concluded.
Meanwhile, blockchains are already supporting myriad complex financial systems. In September, ANZ, Commonwealth Bank of Australia, Westpac, IBM and Scentre Group expanded the roll out of a successfully trialled blockchain platform, Lygon, that shifted a cumbersome, paper-based bank guarantee to digital, slashing the time to issue a guarantee from one month to one day.
Financial guarantees are often required as part of a retail property lease and the platform has much wider application now being explored.
So dabble in Bitcoin, have a flutter on NFT art speculation. Meanwhile blockchain continues to expand as a fundamental enabler of security and efficiency in complex financial systems.
Andrew Cornell is Managing Editor of bluenotes