Suitable Blockchain Use Case Examples

NTE 10 | Blockchain Use

 

There can be a lot of social impact that can come from blockchain. It can be used for financial management, local election, managing businesses, smart contracts, and so on. It pushes accountability and combat fraud. Tracy and Monica talk about the uses of blockchain and how this technology will truly revolutionize the way that we are going to interact and associate on a social and political level.

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Suitable Blockchain Use Case Examples

We’re going to talk about use cases in the blockchain. This came to me as a tweet, Monika. I wrote an article about Cherie Aimée, who I did an interview with and we put on the podcast. I did an Inc. article follow-up from it because I thought what she had to say was interesting about innovation and blockchain and how it can grow and other things like that. In the article and in a couple of articles we mentioned food chain as a use case, where you talk about spoiled foods and how we can get it out. It’s a common one. Most people have an acceptable understanding of it. I use it a lot. I’m sure you do, too. It’s an easy one to use because almost everybody consumes food. Not everybody buys real estate and not everybody does some of the other things, that’s why I use that one commonly. It’s a short article. It’s not like I could go into all the different uses, but somebody tweeted back to me and said, “What are other use cases besides food? What are other innovative use cases of blockchain?” I thought, “I can think of a few.” Some of the people I’ve either written about or been on. Three of them I mentioned.

I mentioned Borsetta, looking at luxury goods. That was interesting because those luxury goods have such high fraud factor to them. That one was a good use case study I thought. There are some of the cases of blockchain of which we need to pay employees all over the world in different currencies and other things. The one that brought that up to my attention and it was like an a-ha because it solves a complete problem in my business was Jessica Versteeg of ParagonCoin. She has people all over the world that she has to pay developers and all of these things. She essentially makes one transfer and everybody gets paid in the currency of their preference. I was like, “That’s such a business management issue. Those two were big ones that stood out in my mind.” What about some that you’ve come across?

I love the idea of the different types of social impact that can come from blockchain. Which country was it that had a local election enabled by blockchain? It was amazing and I was like, “This is exactly what we need; a digital identity, fraud-proof, on the blockchain. There’s no voter tampering done.”

That was the second question. After I pushed out to this Twitter follower a couple of use cases, they asked me about government uses of it. That’s good, organized government use of it.

I put in my book the massive amount of money that goes missing in the Department of Defense alone on an annual budget basis. It’s gone. I can see why there’s more than fear and the need for regulation that would make a government such as the United States and many others push back and say, “We don’t want this. This technology isn’t good because it pushes accountability and it gets rid of all this idea where we see that there’s somehow fat everywhere.” It’s going to be a lot harder when you can’t lose any money; when it’s not lost at all.

 

You’re pointing out some of the best use case studies are coming from fraud, fad, and labor intensiveness in the process of finding funds or multiple transactions. When you have to do many of those things, you want to have that automated but you also want to have it automated in a trustworthy way. That’s where we’re seeing some of them come through. One of the areas that I’m privy to is labor trafficking. It’s a combination of how things get paid, how contracts happen, and how money is dispersed. Labor trafficking for those of you who don’t know, I’m out here in California. In California, we have a large construction business and clothing businesses that have developed around. We have US denim. Los Angeles is a hotbed for US denim. We also have a high amount of construction industry because we construct here year round. In that case, we’re building the new Chargers Stadium and I forget what the other team that’s going to be using it.

We’re getting two LA teams. They’re going to be using the same stadium. They’re building a whole new facility, a whole new compound in a way of what it is and that very large construction also has a high labor trafficking and fraud. My dad has always worked in the oil and gas industry and built pipelines and other things in different places around the world. They’ve had to combat fraud on the ground for a very long time. It’s extremely hard in the construction industry because you have essentially day laborers or you have a contract you use, a subcontractor and you don’t know where they get their laborers from. What you can’t be sure of in the process and the way US law is written is if you do not pay those laborers and they don’t receive the full value of their services, then you have stolen goods at the end of the day. You have committed labor trafficking, yes, but the result of that pair of jeans is stolen goods because you stole somebody’s labor to make those. Even though many brands, and as my dad pointed out in the construction industry, you would pay someone whether or not those funds got down to the laborers was always a question in the back of your mind.

With a smart contract, enforceability is democratized. Smart contracts are completely the answer we've been waiting for. Click To Tweet

Did that happen? Am I sure about it? Is this person trustworthy in the process? How do I ensure that those laborers are getting their funds? They used to go on the ground in places all around the world and Africa, which was where I lived with my father when they were building the Sasol pipeline in South Africa in the late ‘70s. There was zero trust, zero stuff going on. They would hand out the wages person to person at that time. What you don’t know in a labor trafficking world is then do they go around and hand it back to someone who brought them into that country and they’re essentially giving away back half their wages because they’re being held hostage. This is what’s going on. How can we ensure that they’re getting their money at the end of the day? There’s a lot of work being done on the blockchain of trafficking, watching heat mapping and watching the trafficking and the hotbeds of projects and places in which it’s occurring. Watching and mapping the people and subcontractors around it, both in the clothing industry and in the construction industry. You’re watching transfers of money because we’re putting them on the blockchain and they don’t even know it.

My mind jumps far away from this whole use case of blockchain to this. The fact that somebody’s going to get paid and you’re irresponsible for transacting directly to them. That’s where your responsibility ends but let’s think about the entire ecosystem here. The person is brought into a country and then now they owe half their wages to the person who brought them there. They make a choice to then go and basically buy their freedom back by spending half of their wages over again. This is off topic from trafficking, but it is about what responsibility are we trying to track and trying to influence when we talk about how people spend their money for the betterment of their lives? I read a thing about obesity rates, poverty, and parenting tactics. There was a person who did this research on upper-middle-class white parents and lower class or working class white parents. Everything is equal as possible, just discuss class, and how health decisions were made around food.

What they came up with was both sets of parents are dying to please their children and make them happy. There’s nothing like having to say no to your children because you can’t give them what they want. The poorer parents ran into that scenario more often. It wasn’t like a bike for Christmas or a car for the 16th birthday or any of that. They found that one of the reasons, in this study at least, why these parents were making the decision to give their children unhealthy food was that it was one reward that their children asked for that they could afford. All parents wanted to do that, but the parents who had more means would be like, “Carrots and celery only for you. We’re going to go and have a great educational experience. We’re going to go and ride horses. We’re going to go have afterschool programming.”

NTE 10 | Blockchain Use
Blockchain Use: There’s nothing like having to say no to your children and it’s because you can’t give them what they want.

 

I say that as my cushy daughter is getting a reward for working her butt off in school and making sure she didn’t have any missing assignments. I’m about to go take her to get a pedicure at nine years old. Rewarding experiences, we have the opportunity to do that but I can go, “No chocolate for you for dinner.”

We’re not going to stop at McDonald’s. That’s not even food. It’s the idea of making decisions around their value systems of reward and what makes their life better for their children and for themselves. When somebody comes and enters a country, there’s already such an inequality that they’re trying to battle by even making that move. They either have a head hunter. Think about manpower. Isn’t it still the largest service-based company in the world? They basically place people and take a cut of your wages over and over. They’ve aggregated and they have many contracts that they can put you in and take a piece of your wage right there.

The deal is different in this case because you’re paid the minimum wage or you’re paid the wage for whatever job you’re filling. It’s a categorized wage. Their percentage is on top of it and that corporation knows they’re paying that. That’s what happens in the labor trafficking, specifically in the denim industry and things like that because I have a background in product. What we see happen is that you’re paying top dollar wages and they’re being told that this is the labor rate for LA and this is what you’re paying. You hire a production manager who you’re paying a good amount of money to. It’s usually that production manager who’s corruptly hiring through other agents, through agencies that are not reputable and they’re throwing him a kickback.

He’s making more money even on top of it and you’re already paying top dollar, which is hard enough to compete in the denim industry by making US goods. It’s all wrong in the whole process of it. It’s the fraud that’s making the whole thing cost more, which is why you can see blockchain coming into it. I want to make sure you’re not going to get paid on your smart contract unless you’ve demonstrated through the blockchain that every one of your workers got their wages. What do they do with that after? I don’t know that we’re going to be able to control that.

The more and more we see more of these decisions being logged and socially verifiable and public. The more we see transparency in all aspects of our global economy, the more we’re going to see these disparities issues that are very clear to us what is going on underneath that and what we can do about it. Rather than be like, “I don’t know. $5 in New York is different than $5 a day in India.” Those questions are going to go away when we start to see more unifying currencies and more transparent activities. I feel this is the type of technology that’s going to truly revolutionize the way that we are going to interact on a sociopolitical level. Once we see what is informing disparities issues, first of all, we won’t be able to throw up our hands and say, “It’s not my problem. I don’t know.” Secondly, it’s not going to be so complicated that we can’t see directly how we are a part of this problem and how we can be a part of the solution. This already is going to be so much easier to ascertain.

We've lost trust in unhackability because of how things work. Click To Tweet

There’s a lot of this use case that’s happening on the mundane document check level. One that I saw is that there’s a company that you can put your certifications through. They will contact and get the certifications from whatever agency. Whether it might be that you need a food safety certification for a restaurant or you need a nursing certification from wherever you went to school or whatever. Whoever you got your most current updated training or something as small as being able to make sure that you got your certification for being a lifeguard, something like that.

Maybe we can stop having taxi drivers be certified doctors in other countries and they come here and they can hardly even drive a car.

The documentation and certification so that then an agency who’s hiring all of them or manpower that’s going to use them all can have a quick verifiable check. It makes it easy, simple. It’s coming straight from the source. It’s back in through the blockchain and into them. The only thing you have to do is to say, “Here’s where I got it from and here’s where I’d like it to eventually be sent to.” From that point forward it’s automatically there. Anytime you need it, you can access it again as the user. You’re in control of your data and documentation, which is important, too. It helped that process. I thought, “That’s small but it’s important.”

You talked about people owning their data. There’s an interesting project and I hope to interview one of the founders. She’s a friend of mine, Toni Lane Casserly. She’s one of the Founders of CULTU.RE. It is bringing digital identity to the blockchain. One of the examples that she gave, we were on a panel together at this conference. The example she gave was in Uganda where they have the anti-gay law. Straight up they’ll come and imprison you and kill you. That’s it. If people in your village find out you’re gay, you’re dead. If they find out you’re in love or you’re a couple, you’re dead or imprisoned at least. You certainly do not want to have the local government know anything about your marital status if you have gay marriage. You may totally need to have a hospital in London when you go there and one of you is dying to know that you were married many years ago and you’ve been together that long.

What about the safe repository of your personal data up for a digital identity that’s a global trust-enabled and stateless identity? What about stateless government? Not just governmental applications but sans government applications; beyond government applications. Being able to say, “Here’s my repository of all my passport information, of my marital status, of who gets in the will, my last wishes, my power of attorney. All of that should only be ours. In some environments such as Uganda with gay marriage, you’re in peril if you let them know. There are many other use cases in times where you need to let someone know and it must be verifiably yours. There’s a beautiful case to be made for a post-governmental, global citizenry enabled by the blockchain and digital identity.

NTE 10 | Blockchain Use
Blockchain Use: Blockchain seems like a catchphrase, like the trendy thing to do, but it’s not right for everybody.

 

What are some other use cases that you think are up and coming and that demonstrate utilizing the blockchain well? The thing is blockchain seems like a catchphrase. It seems like the trendy thing to do is say, “We’re on the blockchain.” There are use cases that are demonstrating it’s a perfect blend of that need and ability to innovate in service.

When my cousins ask me, “What is blockchain?” I say, “It’s Instagram without the delete feature for PDFs, money, and transactions.” They’re like, “What do you mean?” I’m like, “It means that there’s no one place and you can’t hack everyone’s phone at the same time and take that picture down. You can’t take that PDF down. You can’t take that information down.” What that means is all of us together are stronger than any single database alone because we’re unhackable and because we’re linked together. First of all, the fact that we’re making technology that requires us being linked together philosophically says so much about where we are as a global consciousness.

Aren’t we a little bit of Snapchat in there and that we can let somebody come in and then take them right out? We don’t have to let them have access all the time. We’re Instagram like you have followers and they always know what you’re posting and what you’re doing. You can let people in or take them out, like Snapchat.

Tell me more about your analogy with Snapchat?

I’m saying I don’t want everyone to have my information about my marital status. I don’t want everyone to see my passport.

The fact that we're making technology that requires us being linked together says so much about where we are as a global consciousness. Click To Tweet

It’s not that everything is seen by everyone. It’s sitting in that repository.

That’s where Instagram is visual. That’s why I wanted to make that shift in the thought process is that saying it’s not that it’s visually out there, it’s available and it’s there but you’re going to snap someone in and take them out and you’re going to make that choice.

It’s like time capsules. Did you ever do that as a kid? You buried the thing for in 2030 they’re going to dig it up and it’s going to be a VHS tape or something.

We probably contributed this, but I don’t remember ever digging one up.

We never dug one up because people 50 years before us didn’t do it. People now are doing it so I’m sure it’s a fad and people are going to be over it. They’ll never get dug up. It’s putting something in that place where you know it’s safe. The metaphor here is not about the location of being it buried in one place. It’s the metaphor for it. It’s in this entire system, but it is obscured so that it takes you unlocking it. You can’t put something there that’s totally and completely encrypted in a way that nobody can hack it. No one can get in there and change the amount of money in your bank account.

NTE 10 | Blockchain Use
Blockchain Use: When there’s a problem that needed solving, whether or not blockchain is the answer to it, it’s emerging as the easier way to execute it.

 

That’s where the blockchain starts falling apart for a lot of people. A lot of people who are maybe not in the industry and not in the know about how it works and what it does because we don’t believe in unhackable anymore. We’ve lost trust in unhackability because of how things work. I hear it all the time, it’s the condescending thing that happens in the security part as we build our companies and our businesses and they’re like, “That’s our users’ entire fault because they can’t make good passwords.” I’m like, “It’s not. It’s your fault. It’s our fault for building a system that couldn’t be secured in a way that was capable of being done by human nature.”

This is so much further and more advanced than that but it’s fantastic. If you put too many layers of the interface over something that’s raw data that will hold something, you could end up like the passphrases. You could potentially memorize someone’s passphrases and potentially begin to hack into their wallet. There’s still a way that it can be done, it’s much harder. If it was to happen, you would see it exactly what happened. It’s not like you had your Chase account hacked into and then it went to some Swiss bank account and it disappeared. Every single wallet that it transfers to is seen on the blockchain.

It makes it a deterrent to hacking because there’s no way to cover your tracks from the moment that you hack into something.

If it’s on the blockchain, that’s true. That leads to a new trust economy. That’s where people can go, “I can trust that this is bigger than me. It’s in a situation that’s larger than one database. If someone makes friends with the CEO and hacks in it or someone gets his personal login to the system and the database of Chase Bank, they can take your money.” The Federal Government might ensure it to a certain point, but not all the way. Not if you have so much money. The Federal Government will only interrupt to $250,000. You don’t have all of the immunity in the world. There are all these different processes. The blockchain is changing starting with banking. FinTech is huge. Insurance is big because there’s so much fraud in insurance that can get rid of many opportunities for fraud, be a huge deterrent, and make things so much more efficient.

That’s why real estate’s a no brainer. Think of how much money it cost you to buy and sell a home. It costs you a ton. Think of how many times you’ve lost your deposit when you didn’t cause any damage. There are many opportunities for this big power imbalance to occur where basically your contracts are only as good as your ability to lawyer up and afford a lawyer to enforce them. With a smart contract, enforceability is democratized. What does that mean? Finally, with a smart contract it’s not fundamentally more expensive to be poor than rich. It’s the opposite. It’s finally the same and that’s all the working person’s asking for on a global scale. It’s like, “Can we just not always have the starting line somewhere else for those of us who didn’t start out with any amount of privilege, whether it’s a geographic privilege, racial privilege, class privilege? Can we have the starting line be more equal and then see what happens with all this amazing human resource and potential when people get the chance to compete on fair playing ground?” Blockchain has the potential. If it doesn’t get centralized and put into the hands of too few. It has the ability to take us to a new place that way.

Blockchain is Instagram without the delete feature for PDFs, money, and transactions. Click To Tweet

There are many use cases that are coming up and they’re popping up left and right and you go, “Problem that needed solving.” Whether or not blockchain was the answer to it, it’s emerging as going to be easier to execute it that way. That’s why people are adapting to it because we have had these problems in these areas for a very long time. A good friend Juliet Clark is in Super Brand Publishing. She is in this publishing world and this whole thing where there is complete distrust and discussed with the book publishing market. That’s how you get on the New York Times bestseller list and how you get on the USA Today and the whole thing’s all hackable. It’s all corrupt in the process.

She’s been researching and looking in and excited that we started this podcast because it meant that she would have a vehicle for exploring more along with us. How can that be changed? Is there an innovation here that I can participate and be a part of because I care about this being? This has been happening for 100 years or decades or whatever it might be. I want to affect the difference. I want to affect the change. This is partially why when I first saw blockchain and what’s going on here, I was like, “I get it immediately because I see the problems. I see the problems of regular contracts, of escrowing, of letters of credit and all of those things when you process goods across countries.” Smart contracts are completely the answer we’ve been waiting for.

I want to make sure that we touch on this because depending on who’s reading, smart contracts redefine that on your terms because I know it better than you do, but you define it.

I’m going to place a purchase order to buy a whole bunch of pens. It could be any goods that I’m going to buy over in Asia. I’m going to buy it in China. I’m going to place a purchase order with this factory and I have a contract that’s completely unenforceable now. I am only allowed for that contract to be enforceable if I find it in Chinese. How can I be totally sure that the translation of it and the understanding of it are matched to my understanding? I can put it in two languages, but at the end of the day, only the Chinese version is enforceable with the factory. I’m signing something to make sure we’re clear on it, but I know it’s unenforceable and I can’t afford it anyway even if I tried to. They could cheat me. It can happen. That’s why there’s this adversarial relationship with our factories, which I don’t believe in. I go there in person because now that they see me and know me, they’re more likely to trust me and I’m more likely to trust them. That’s how I’ve changed it in the way that I work because this paper is worth nothing.

I placed this purchase order against it. I’m buying these goods. I pay 30% to 50% down depending on your arrangement with them. The remainder of it is waiting in a letter of credit from the bank. The bank has to get that the goods are completed. Here’s the problem. What does the bank know about whether or not it’s a good pen? Did they make what I asked them to? Did they follow the contract? The bank knows you ordered 10,000 and 10,000 are finished. There aren’t any smart people in that process who get a say in the process. There is no verifiability. I might hire an inspection agency in the process, but the bank may even ignore that and release the funds. I’ve had many people who’ve not done it in a verifiable and smart way. Their goods came to the shore and they go, “This is not what I wanted. This is not what I bought. I’ll never get my money back.” That’s where we want us. We want checkpoints along the smart contract way. I want my inspection agency to sign off on it. Maybe the bank has their own and that’s fine too. You want to go through that process of having all of those people and no funds are released until all of that happens. I say, “Go.”

NTE 10 | Blockchain Use
Blockchain Use: There’s a lot of need for education. People needed to understand what the internet was, and now there’s a new one, a new internet that’s coming.

 

You still have the opportunity to say yes, no, and then the transaction completes.

Once you set it up and put it into the system, it’s like an escrow. It’s moving through it if they say it’s done because that’s the process that’s set up. It’s not set up to be verified by me or anyone else in that process. It’s not set up that way. That’s where smart contracts are going to come on as a layer of multistep verification throughout the process and enforceability, but also that it can do disparate payments. Maybe I have a smart contract. On my podcast platform, I might take a big advertiser who wants to spend $100,000, but the advertiser doesn’t want to shell out $10,000 to this podcaster and $1,000 to this one. They want to get as many views, listens, whatever it is that they’re contracting for across the demographic, across the topics, or across whatever they want.

They want to write out one check and we want to be able to disperse it in a smart way to all of the different people whose verifiable information are able to come back and say, “I did get 1,000 listens and here’s the proof of it because my data is automatically transferred within the blockchain. Now I know, and I’m going to get my $1,000 out of that $100,000 pool and somebody else is going to get their $10,000. Everyone’s happy.” Podcasters are getting paid and the brand’s happy because they wrote one check and they got the campaign that they wanted. They got the listens. They got the views. It verified at the end of the day that it happened instead of, “Maybe people watched it. I have an impression load.” That’s also a way that I see that.

I read somewhere, I heard from a lawyer at some point that over 80% of law practiced is contract law. It’s not court law. Contract law is a profession but also an industry. To be able to productize the services it’s like, “I can’t wait until we have an app to take care of my doctors so I don’t have to go to a doctor anymore. I have an app for that.” I wish I had a smart contract or a little cornucopia of smart contracts for my lawyer. Things that were like, “Here’s the NDA. If it’s important, I want you to put $10,000 into this multisig wallet that if we verify that you’ve gone against this NDA, automatically that $10,000 is going to our lawyer because he will sue you.” You got to put some money on the line or if I’m left alone in a room with someone who I know has a history of grabbing women, they have to put a certain amount of money into an escrow account because I could leave that room with severe damages and I’m not going to be bothered with having to sue them for it.

Think about all the times we have these contracts and they’re unenforceable. That’s where I see that the highest level of blockchain usability is going to happen is because these things are already problems now. It’s not about I can avail myself of lawyers. Many people do. You’re disrupting my business and I’m not moving forward by having to deal with this all the time or deal with this risk level. That’s where at the fundamental end of the day why it’s going to take hold and move fast. It’s because it makes more sense to make business smoother so I can get on with the stuff I need to do, not the stuff that is encumbering me and distracting my business at the end.

In blockchain, there's no way to cover your tracks from the moment that you hack into something. Click To Tweet

The use case is they do expand further and further and I’d rather not even talk about where there’s not one because eventually, it will grow to that. People used to say they’re not an internet business. People worked an internet business because there was even a chance to be not an internet business.

I finally had to say, “Technically, I’m a digital marketing business. That’s what I am.” We’re all dragging and screaming into whatever it is.

At the same time, we’re in the front end of a curve that’s going to get more and more groundswell. It’s an exciting time but also there’s a lot of need for education. People needed to understand what the internet was and now it’s like, “There’s a new one. There’s a new internet. It’s coming.”

We would love to hear your use cases. We’d also love for you to share it. If you’re building a business and it’s got a great application, we want to hear about it. If you’re doing smart contracts, if you’re doing things on the blockchain, if you’re doing things with cryptocurrency, we want to hear it, especially if you’re filling this big need. We want to hear your story. We want to hear about your company. Apply to be on our show. Let us know.

It’d be great. I would love to hear more use cases for the blockchain.

That is the part that I personally want to grow in our show. The more people that suggest companies doing some great things. We can’t be everywhere, we try to be. We want to hear what’s out there because we’re relying on you to bring that to us. When you’re out there and you hear something, ping us. Message us on Facebook, on Twitter and on LinkedIn.

Send us a Twitter message. That’s the best way to get through to us.

You can find us anywhere on social media at New Trust Economy. You can find us at NewTrustEconomy.com and you can send us a message right through there. If you want to send us a comment, that works too. Ping us anywhere you can. Thank you so much for reading. We enjoy doing this show. 

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