Lory Kehoe: 'Trust in Blockchain to deliver smart ways to boost customer experience'
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 CD-ROM 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
Sunday Indo Business