By Ryan Worsley, CTO at iov42
From transforming methods of digital data handling, setting new sustainability standards and protecting against fraud; the potential impact of this technology on governments and businesses must not be underestimated.
Here, Ryan Worsley, CTO at iov42, reveals five of the most disruptive applications DLT has to offer and the rewards to be reaped by those ready to embrace it.
Handling data with care
From personal information to financial and asset management records, we know that more data than ever before is being shared and stored online. So it’s becoming increasingly desirable for individuals and organisations to control who has access to their data, why, and when.
By storing transaction records, asset ownership and product lifecycle data on a decentralised ledger, it becomes shared across multiple authorised parties. Any changes made are therefore instantly visible. This means that information stored using DLT becomes incorruptible (tamper evident), and all transfers and transactions inherently transparent and trustworthy.
Personal data sharing is also being transformed using Self Sovereign Identity (SSI). Details like date of birth, home residence or qualifications can be stored using decentralised identifiers (DIDs) on the blockchain and verifiable claims (VCs) held by the user. Third parties can then use these to prove that an individual meets certain criteria, without necessarily accessing the raw data itself. Proof that you are over 18 can be given without sharing your exact date of birth, for example.
Securing a more sustainable future
Sustainability is becoming a central part of an increasing number of government and business agendas. Post-COP26 ESG targets have set the path for a more sustainable future that protects against the developing climate crisis. It’s been reported this week that the Amazon rainforest is at a critical tipping point due, in part, to mass deforestation. Analysis of satellite observations show that the forest is losing stability with ‘profound’ global implications, but how do we make sure that paths to rectify these losses are followed?
A reliable infrastructure is needed to deliver the practical changes required to help governments and organisations truly meet their ESG targets. DLT provides the platform for eradicating the corruption, malpractice and inefficiencies which are currently halting progress.
Within supply chains, this looks like storing product lifecycle records on an immutable, decentralised ledger. Malpractice can be more easily identified and key players held to account. In the timber industry, leaders are already using DLT to do just that, with Timber Chain monitoring and tracking sustainability regulation across the entire supply chain.
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Waving goodbye to fraud
Another benefit of being able to track a product’s lifecycle is the potential for reducing fraud. Recent statistics suggest that counterfeit and pirated goods account for 2.5% of global trade. Removing these products from the market requires a system that enables organisations and their customers to more easily identify them in the first place.
And that’s where DLT steps in. Products can be given an immutable identity, signified by a cryptographic hash, signature or tag, and this information is stored on a distributed ledger. Then, when products pass through the market, they can be identified and checked by others against this decentralised record. Verifying products (such as wine, perfume and cosmetics) in this way will mean that counterfeit goods are easier to spot and can be intercepted and removed from the system.
Cutting out the middleman
Third parties are relied upon to facilitate a huge number of secure transactions. From payments to credential checks and certification, processes are inevitably slowed by this extra but necessary step. The conundrum for organisations is how to cut out the middleman and speed up their processes in a safe and compliant way.
DLT-powered automation can be used to streamline processes, without sacrificing security. Smart Contracts are one such example. Entered onto a distributed ledger as “if/when, then…” statements, they enable processes to be initiated automatically whenever their predetermined criteria is met. This removes the need for third-party checks or reviews. Processes can be triggered more quickly without manual delay, while remaining in line with regulation and security requirements.
Creating wider opportunities for collaboration
Collaboration is a key part of successful business and democracy, but it carries its own risks. Sharing sensitive data and information can leave organisations vulnerable to foul play and make them reluctant to collaborate with others.
But what if we could remove that risk and collaborate successfully by instilling trust through the use of DLT? Here, organisations can present, share and view data and information in a more controlled and secure manner.
All processes and transactions carried out can be viewed and thus monitored by every authorised participant on a distributed ledger. Meanwhile, more sensitive information from each individual organisation can be stored and shared in a way that enables co-operation, without giving unnecessary levels of access.
By transforming the way our data is handled and shared, DLT is making digital transactions safer, streamlined and more secure. The benefits of implementing such an infrastructure – for governments right through to SMEs and individual data holders – are manifold. Time will tell how quickly DLT is embraced. For now, one thing is certain: it presents possibilities that are truly invaluable.