Transparency

We can use blockchain to keep track of product lineage, from raw materials through to finished products, as well as for tracking packages through legs of the journey.

At every point in the manufacturing process, we can record both characteristics and responsible party information in the ledger. Characteristics include organic, farm-raised, environment-friendly, Kosher, Halal, gluten free, recycled material, and made with renewable energy. Responsible parties are those that own one or more steps in the manufacturing process, or are responsible for a transportation segment.

Knowing every step along the way has its advantages. For example, if you order wild salmon in a restaurant, it should be possible to track it down to where it was caught and whether it was from a sustainable source. If organic carrots are purchased, we should be able to identify the farm.

The idea of confirming the “catch to plate” lineage might sound farfetched, but it is being done today. Viant and the World Wild Fund for Nature partnered to provide a blockchain application to do just this.21

A blockchain application focusing on lineage also includes shipping. The recipient of a shipment can check status, and port officials can access shipment information as well.

Containers, pallets, and trailers can all be associated with smart contracts that record arrivals, departures, or change of custody in the blockchain ledger.

Marine Transport International Ltd., a U.K.-based freight forwarder, is using blockchain for this purpose. The blockchain application replaces lots of spreadsheets and other types of documents that usually only exist on someone’s desktop.

Jody Cleworth, the company’s chief executive officer, calls blockchain a “natural fit” for shipping, which involves compiling and transmitting complex data sets between “so many participants, suppliers and regulatory organizations.”22

One such dataset relevant to shipping is the Bill of Lading document. This document contains proof of ownership as shipments pass along the chain from party to party, such as from exporter to shipper to importer. Storing this document in blockchain would have a lot of great benefits.

Generalizing the concept of shipping, there are a number of blockchain efforts to better track lineage in transportation. The Blockchain in Transport Alliance (BiTA) has many members in the field of transportation, and is working through standards and use cases for blockchain within the industry.23

One of the most significant challenges with creating a blockchain application to track lineage is the buy-in. An effective process would demand a large amount of cooperation from organizations involved in every part of the manufacturing or shipping process, as well as from government port authorities. Hopefully the BiTA can facilitate these arrangements and make cooperation easier.

Streamlining

Wouldn’t it be great to buy a used product that is still under warranty and have the warranty automatically be transferred to you? It could be anything from a toaster to a car. Blockchain can make this process seamless. By storing warranty information, a product sale can initiate a smart contract that will transfer the warranty quickly and painlessly to the purchaser.

There is currently a blockchain service called Warranteer where consumers can maintain warranty information for products purchased, and even transfer them when the product is sold.

Privacy

Today when we buy something online, our payment details (i.e. credit card numbers) are being stored somewhere, along with our names and addresses. Blockchain hides all this, so that only public keys and addresses are available. As such, the transaction process is much more secure.

We can purchase an item and not worry about our identity being stolen. In addition, instead of organizations paying very high fees for credit card or PayPal purchases, the equivalent of pennies can be paid using a digital currency such as Bitcoin.

Permanence

I bought diamond earrings for my wife’s birthday many years ago. I did a lot of research on diamonds and spent several days haggling with diamond dealers in Manhattan’s diamond district. My wife lost one of the earrings about two years later and I went through a similar process to replace it. Last summer she lost another earring, and about a month ago I again went through a similar process to replace it.

Apart from the adrenaline rush of haggling with diamond experts much more skilled at negotiating then me, another source of stress was the nagging thought that maybe the diamond I am buying is not what the dealer says it is. A piece of paper can say anything. It can claim that the diamond weighs 1.2 carats when the diamond actually weighs .99. It can lie about the color and clarity as well.

Blockchain is making inroads in the area of precious metals and diamonds, to increase transparency and make sure the purchaser is getting what the salesperson claims they are getting. Not only does this lead to more confidence during the buying process, it also can make us feel better ethically. Many diamonds are mined and traded in areas under conflict, and these diamonds fund war and corruption. The purchaser would be able to see if the diamonds in consideration are these so-called “blood diamonds.”

Bruce Cleaver is the CEO of De Beers Group, which has 35% control of the world’s diamond market.24 According to Cleaver, “Diamonds hold enduring value and represent some of life’s most meaningful moments, so it’s essential to provide assurance that a diamond is conflict-free and natural. By leveraging blockchain technology, we will provide an additional layer of assurance to consumers and industry participants, with every diamond registered on the platform having a record as everlasting as the diamond itself.”25

During the grading process, De Beers Group inscribes each diamond over .16 carats with a unique identifier. This identifier can be cross-referenced using blockchain.

Diamonds are forever, and so is the blockchain ledger.

The process of identifying an item and providing a complete and immutable lineage of that item’s history is not just limited to diamonds. It can be used for valuables including gold, watches, art, and antiques. These processes are currently antiquated and often paper-based, easily susceptible to forgery and foul play.

One challenge to using blockchain for precious stone and metal verification is that a trusted intermediary will still need to exist (as an enabler) to validate the item. For example, when De Beers Group inscribes the diamonds, they act as a trusted intermediary providing a service for this blockchain application.

Distribution

In addition to diamonds, we can also validate the authenticity and condition of collectibles. I used to be a big baseball card collector. In the early 1990s the entire baseball card industry tanked, and it still has not recovered. Part of the reason is that it is so easy to counterfeit cards.

Baseball cards are validated by several organizations, such as the Professional Sports Authenticator (PSA). Unfortunately, this process is costly and (some claim) subjective and prone to error.

What if each baseball card could exist in a plastic protector containing a small QR code, which represents its blockchain address? This code could be scanned to learn about its condition and other important information.