We’re living in a trust crisis. Blockchains offer hope. Technology has made it easier to commit forgery, make fakes, or impersonate others. And it’s become really hard for all of us to know what’s real in our digital world, but in our physical world, it’s easier. Let me illustrate. Could you grab my purse? So my daughter has been helping me with the camera all day. Thank you, sweetie. And, so I want to show you how you can see quite clearly that this $20 bill moves from me to my daughter. It’s very easy to see that I no longer have it. Yeah, you can keep it. I don’t longer have it and she does.
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But let’s say I want to make a digital version of that $20 bill. We haven’t had a way to authenticate that a digital form of an asset is the real thing without using middlemen like a bank. And so if I had a digital version of that $20 bill I could copy it. I could give it to you. I could go spend that same $20 again on weights for the home gym that I’ve been building in my basement. This is called the double spend problem. And this is what has limited our ability to safely transact or exchange digital things directly with each other.
Now, we could be talking about really anything digital with value, like a photograph or music and musicians and artists and others who create things of value in digital form, know how easily they’re copied. Blockchains give us a new tool to fix this. They start by making it possible for each person or organization or machine that’s writing to the shared ledger to have a unique identifier and then giving every piece or component or thing that goes on the ledger, a unique identifier.
Then blockchains track these unique identifiers so we know if someone’s trying to introduce a duplicate. And anyone in the community can use the ledger, the blockchain, to verify the authenticity of an asset that they obtained that’s been tracked on a blockchain. A few important notes. First, these identifiers can be a pseudonym or a proxy for identity to give some privacy protections. Also, a specific identity can accumulate additional evidence or testimony that it is what it says, like being validated by a government agency as a unique person. We can see the presence of that evidence without needing to see the underlying identity itself. This feature can be useful in so many different applications. We can also use this for things that aren’t natively digital.
So we can describe all kinds of physical world assets like this house or a car as code. So this means with a blockchain we can authenticate that a physical world asset is unique. That it’s the real thing. For example, it’s hard for healthcare organizations around the world to know if incoming shipments of medicine and vaccines are real. The World Health Organization estimates that in some regions one in 10 medical products are fake or substandard. And when medicines are in high demand, as they have been with the opioid crisis, we also see more theft and this introduces stolen or maybe even expired drugs into supply chain. The pharmaceutical industry is coming together in consortiums, or organized groups, to use blockchain technology to help ensure that everyone gets medicines that are real. So a hospital or pharmacy can with a web browser and a barcode scanner confirm that a medicine has not been duplicated or reported as stolen as it’s put on the shelf. It takes a fraction of a second.
So, where in your industry are fakes and forgery a problem? The answer to that question holds clues to one place where blockchains may help you.
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