A Blockchain Idea
Hint: Paper receipts are not enough.
Last week, I tagged along with a friend to a party. It was fun, but I forgot my jacket at the place. Whoever found it, if he had a way to identify its owner, I might had my jacket with me still.
A few months ago, I bought a luxury pair of glasses at a discount. It was a pretty good deal. A few days later, the glasses turned out to be a scratch magnet. I realized I was sold fake glasses. Only if at the time of buying, I had a way to verify the authenticity of the glasses, I’d have saved myself.
By the way, I am curator of a weekly newsletter, Unmade, which delivers one idea from the future (just like this one) to your inboxes.
Who records ownership?
“The robbed that smiles, steals something from the thief.” — William Shakespeare
Imagine your car gets stolen; what would you do? You’d go to the police department to log your complaint. If your car gets noticed with someone else, the police will verify the ownership via Automobile Registry of your country and put the thief to the trial. That’s normal.
What if someone captures your drone? How would you prove that you own it? Did any authority record that you bought the drone? No. Your best bet would be the paper receipt that you received from the shopkeeper. Will they prove your ownership of the drone? No.
Paper receipts are not unique; the thief can forge one too claiming that he owned the drone. Right now, there’s no easy way to prove you own what you own. Even if there’s a way, it is a long, slow and tedious process.
You own something because others believes you own it. The thief doesn’t.
I wonder if there be anything better. Anything that records who owns what and is still easy, fast and reliable to work with.
Are you getting duped?
“My fake plants died because I did not pretend to water them.” — Mitch Hedberg
According to the Economist, “estimates for the total value of fakes sold worldwide each year go as high as $1.8 trillion.”
It not only leads to the loss in business for the brands but also makes the consumers lose trust in those brands.
I imagine a world in which when someone goes out to buy something that must be authentic to have value, the shoppers could simply pull out their phones, type in some number and verify if the shopkeeper is trying to dupe them.
I wonder if every valuable thing in this world could be assigned a number and ownership.
Universal Ownership Ledger
“All universal moral principles are idle fancies.” — Marquis de Sade
If you’d have discussed this idea with me of having a Universal Ownership Ledger a year ago, I’d have laughed in your face until I turned blue. The scale of the problem is just nuts!
Not anymore.
The nut-ness of the problem lies when we think one corporation has to maintain these records. There are thousands, if not millions, of different things that could be registered in such a ledger and each of them is unique in its own way.
We’ve got this new shiny tool with us now — Blockchain.
If you don’t understand how blockchain works, here’s the ultimate guide in plain English to understand it.
Blockchain makes it efficient to store such records in a manner that is easy, fast and reliable. Let’s see how it can work.
How the ledger might work?
If you still haven’t read the ultimate guide to the blockchains, think of it as a database that is maintained among thousands of peers, instead of a single corporation.
Public blockchains are built on two foundational properties —
- Once something is recorded, it cannot be modified ever by an unauthorized individual
- Anyone can read the information on the blockchain, thus, making it transparent
Think of a record in blockchain like a fly stuck in amber. You can see it from outside but it cannot be moved.
Every asset worth recording need to have a fingerprint. The fingerprint will be derived from its defining characteristics. For instance, a drone’s fingerprint will be derived from its identification number and its specifications. The fingerprint must be unique universally in the entire blockchain. Because counterfeiting ruins a brand’s value, they might want to record the fingerprints of their manufactured assets on the blockchain.
A fingerprint cannot be recorded without its owner. In the beginning, the ownership will belong to the brands themselves. Throughout the supply chain, as an asset changes hands, the current owner will be able to forward the ownership to the new owner.
This way, when the item reaches to the consumer, (s)he can verify quickly by querying the blockchain that it indeed is an authentic one. To the shopper, the complete trail of ownership will be visible. Once satisfied, the consumer buys the article, thus, getting the ownership transferred to him/her by the shopkeeper.
If ever, the item gets lost or stolen, the record on the blockchain still reflects the original buyer as its owner. This piece of information helps the law to tell who does the item belongs to.
When I bought the pair of glasses, I was duped of just $60. What if someone sells fake health supplements or a fake medicine?
While the drug might cost just $100, health is priceless.
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About the author
Mohit Mamoria is the curator of a weekly newsletter, Unmade, which delivers one idea from the future (just like this one) to your inboxes.
This is an Unmade edition, repurposed for a blog post.