Human life is filled with needs, goals, and the drive to achieve them. Along the way, these plans are filled with problems, stemming from some sort of lack. Whether this lack is one of ability, confidence, time, money, or any other resource that we possess, it still represents a problem. Solving these problems is valuable, therefore there are specialists that have generated businesses that focus on and strive to provide solutions.
Middlemen appear in order to help people connect to the right solution sources and solve their problems faster and easier. Their role is integral to human society since we live in a world with imperfect information. We don’t know who to trust, we don’t know where to go, and what is the best solution to our problem. That’s why I am always feeling a little bit awkward when I hear or read “Blockchains are going to eliminate the need for middlemen.” This is simply not true, because every blockchain is a middleman by itself. Blockchain technology has the potential to become the ultimate middleman, a decentralized entity that connects the world in a way that human beings and organizations cannot.
We can’t even compete to provide the same level of value like a really well-designed blockchain solution can, and yes, it takes a lot of time to develop these solutions, but as we agreed before middlemen are a necessity and the problem they solve is quite valuable. Choosing a dentist or a doctor, all the way to going to buy clothing at the local store, there are thousands of middlemen involved in the economy that take risks and work to provide the rest of humanity with the availability, information, and options for various solutions.
What is interesting for many when thinking about a blockchain is the ability of this technology to communicate trust flawlessly. In fact, we often refer to this as “trustlessness”, but that term does not do the process any justice. It is not that we don’t need to trust, but that trust is available by default. The inability for any actor in the system to maliciously change data and cheat is what gives us this certainty.
Not all blockchains can be trusted as Bitcoin and Ethereum, mainly because there is a lack of systems for proving transactions and keeping the information immutable. This is why many of them are leveraging Ethereum’s system to host their own smart contracts (about 10,000 smart contracts are registered on the blockchain) since they are aware of the difficulties in creating the proof of trust.
I believe there is a real possibility for implementing blockchains in companies, but it is not for all industries. Supply chain companies that deal with distribution can create processes that will use oracle inputs to generate proofs (oracle input is a human being entering information) on the number of goods distributed along the way. Any inconsistencies will be picked up on consecutive checkpoints.
Other industries can benefit from consortium blockchains, where master nodes have the ability to deal with data and make changes, limiting the responsibility to the hands of a few selected individuals or departments that are able to record information in the ledgers. Additional information to be recorded is which node is the originator for the information, making any changes traceable. Products can benefit from blockchains in so many ways! There are a couple of things that need to get verified in order to sell the product in the first place. These details are connected with the country of origin, materials or ingredients, allergens, test results, legal status of the company, among the many necessary parts entrepreneurs need to take care of when starting the operations of their business.
This is already recorded in various databases by human beings, and most likely these systems will not change over night, as they are needed to ensure that people buy quality products and services. Blockchain can help communicate this information directly to the consumer that wants to know more. It is capable of connecting the various stakeholders that have a part to play in business, regulation, and quality control.
For anybody that’s been involved in blockchain technology for a while, at least two years before the whole hype wave, they know that blockchains have a lot more to offer than just financial solutions. Bitcoin was but the first step and we have moved light years away from that moment. We already decentralized the economy and made money change hands from old, into new economies. Old money to new money, and with a wave of the new rich entrepreneurs we can expect that they will get their hands and minds busy to solve the problems of the contemporary global citizen.
Some of them will not, but rather enjoy the wealth that they’ve generated by making smart decisions, but once they themselves face silly problems that would not exist if a blockchain was implemented properly, they will feel the urge to do something and risk their resources in the achievement of their ideals. The ICO culture is a culture of startups, entities that are waiting to get enough money from other people to spend in wild pursuits. Business is different, and it instantly strives to get the clients with the relevant problems, and help solve them in exchange for money, or in what is the usual case for blockchain, cryptocurrency.
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