An interesting anecdote about Sir Isaac Newton, the physicist is the one that suggests that he was also the inventor of the cat door. The story takes us to a lab at the Cambridge University where he performed his experiments. Newton supposedly asked a local carpenter to drill two holes in the door, a larger one for the mother cat, and another smaller one for her offspring when constantly interrupted by their scratches at the door, though the smaller hole was never used because the little kittens preferred following their mother passing through the one with the larger diameter. Well, the cat door has arrived, the traffic has commenced. As a matter of fact, no one owns it so no one can be booked. But why book anyone?
Blockchain technology is not only about Bitcoin though everyone identifies it with it. One unit of the cryptocurrency, a couple of months ago, surpassed $11,500 for the first time. What is most interesting is that, since the time it existed a decade back, 2009 to be precise, it has appreciated so many times, that virtual paupers would have been virtual millionaires today. $1,000 in Bitcoin invested in 2010, would now be about £36.7 million. How wonderful would it be if we could also track balances stored in different currencies? We will then need a cryptocurrency wallet that uses a Bitcoin blockchain.
Often managing Bank guarantees is a huge problem giving rise to several frauds and scams. A collaborative venture between the Israeli bank and Microsoft is creating such a blockchain system that manages bank guarantees. Barclays, the corporate bankers are developing a number of blockchain applications involving tracking financial transactions, compliance and combating fraud. At home, even Reliance Industries has announced launching Jiocoin, a cryptocurrency of its own.
Blockchain is not a smokescreen, on the contrary it is completey clean. It is honest and through its distributed ledger is the most credible tool. It’s an awesome technology and as Tyler Winklevoss states, “It’s a mathematical framework that is free of politics and human error”. If Harshad Mehta, Nirav Modi and Viajy Mallya used the ‘fraudulently obtained’ depository receipts, loans, LOUs or LCs. A biger question that vexes a thinking mind is what was the fraid, if the DRs, the LCs and the loans were in the first place approved by the bankers and the regulators?
With no mechanism to check who was using which document to obtain what loan or LC or DR, the regulator cannot be allowed to merely scream foul and sit on the jury rather than be the co-accused! Blockchain is one cat door for the one parent transaction that can track all the kittens going in or out with date, time and even biometrics to authenticate movement to ensure that there is no alibi or alias entertained.
A vexed area is trading in derivatives and other financial instruments like bonds, commodities, currencies, interest rates, market indexes, and stocks in a centralized ecosystem. They are high risk for sure. Their high volatility exposes them to potentially huge losses. The speculative features only increase the risk. Centralised trading has never been easy. Can we make predictions about real events and create a decentralised ecosystem? Augur, an ERC20 token allows the creation of blockchain-based predictions of markets that can mitigate the risks involved.
Logistics, whether in financial or supply chain markets is important to remove fraud and build confidence. Of particular interest is marine insurance that covers cargo losses or damage caused to ships, cargo vessels, terminals, and other transport in which goods are transferred or acquired between different points of origin and their final destination. This is a vexed area with claims and counter claims based on jurisdiction. Maersk, the shipping and transport consortium is developing a blockchain solution for streamlining marine insurance. Similarly, can we create smart contracts that become active and operative when a network consensus agrees that conditions have been met? æternity blockchain, an Erlang-based scalable smart contract platform does exactly that. Not just that. It then allows automated payments to be made when parties agree that conditions have been met.
Covid has distressed all of us leaving no credible plan for mitigating the ill effects. Can we put the Covid disease outbreak data onto a blockchain so we can increase the efficacy of disaster relief and response? ICMR must surely be interested. Decentralized blockchain patient records if created can help track the progress of patients after they leave the hospital. Again, relief measures can be calibrated in these covid times. In fact, ‘MedRec’ is an MIT project involving blockchain electronic medical records designed to manage authentication, confidentiality and data sharing.
Even the entertainment Industry has not lagged behind. Kodak has a blockchain system for tracking intellectual property rights and payments to photographers. Recording and tracking royalties for musicians, and allowing them to create a record of ownership of their work is now a blockchain application. Have we ever realised that diamond Markets are prone to fakes, such as conflict diamonds? Cubic Zirconia is a case in point. Blockverify is a blockchain platform which addresses anti-counterfeit measures, as required in the case of diamonds.
As Vitalik Buterin, Co-Founder of Ethereum says, “Whereas most technologies tend to automate workers on the periphery doing menial tasks, blockchains automate away the centre. Instead of putting the taxi driver out of job, blockchain puts Uber out of job and lets the taxi drivers work with the customer directly”. With so much happening on Blockchain, can the government of India not investigate opportunities across health records, shipping, business registration governance, and many others? They must create new data centres to move public records onto the blockchain. Must collaborate with Electronics giants like Samsung to create blockchain solutions for public safety and transport applications. As people outreach programs, the government must enable Pensions using blockchain technology to record and administer benefit payments.
Let us not wish away this technology. It is here to stay. Let’s adopt and benefit. The industry is transforming and so are job skills. Old markets are saturated. New employment opportunities have to be created. Blockchain is the opportunity.
And to top it all, a cat has nine lives! And many morre kittens to give borth to. Prudency dictates that we must be ready when the next litter arrives and rest assured, it is on its way.