What impact will the crisis have on the use of blockchain?
COVID-19, a gas pedal of digital change
The health crisis we're currently experiencing is causing upheaval in both our daily habits and the economic landscape as a whole. In fact, as the Covid-19 pandemic has progressed in Switzerland and elsewhere, digital technology has become as much a part of our daily activities as our attempts to respond to the issues raised by this crisis. Whether it's helping patients and healthcare staff, keeping track of courses online, implementing teleworking or staying in touch with loved ones, digital is everywhere to limit physical contact.
The digitization of society was inevitable, but often delayed by various mechanisms, notably regulatory. In this unprecedented situation, ordinances were passed to enable widespread electronic identification and signature. In particular, the number of downloads of videoconferencing platforms has exploded, reaching a record 62 million. However, this acceleration of digital technology also has its limits, as demonstrated by the scandal surrounding the exploitation of user data on the Zoom videoconferencing platform. What if certain technologies made it possible to benefit from technology without compromising data security? Blockchain technology could provide a key answer to this problem, and the current context could accelerate its implementation.
Blockchain allows you to retain your rights to data possession
Ethical questions and debates about the right to data ownership are all the more topical in this epidemic context, with plans to trace people. To be effective and get people out of confinement as quickly as possible, digital tracking must be compulsory, say some. Others refuse to concede their rights.
The challenge of the century is to preserve the possibility of anonymity against the fanatical utilitarians who would like to ensure the good of all by putting everyone in a cage," asserts Gaspard Koenig. Should we agree to provide personal data in the name of collective health, to the detriment of individual freedom?
The use of blockchain technology could provide a solution that preserves freedoms while retaining the advantages of digital technology. Indeed, a tracking application coupled with blockchain technology would enable data to be anonymized, leaving individuals free to decide with whom they wish to share it, while guaranteeing data reliability. Many other applications could benefit from data security and anonymization. Whether it's the sharing of health information with medical records, or banking regulations dealing with sensitive data, blockchain makes it possible to guarantee the encryption of information while maximizing process efficiency.
Blockchain players already have solutions in place. One example is Wecan Comply, a solution addressing banking regulations. The sector is now just waiting for the momentum to accelerate before deploying on a global scale.
Better supply chain management thanks to blockchain
Another case in which blockchain could alleviate data sharing issues is that of supply chains. The current pandemic has demonstrated that governments and companies with a robust digital infrastructure and enabling regulations manage supply chain disruptions far better than those without. With the current supply chain disruptions, the need for greater visibility has been reiterated. This is seen as essential for optimizing efficiency and agility. When critical disruptions occur, transparency becomes essential to understand the impact on the rest of the chain. Indeed, the mask shortage that occurred at the start of this pandemic could have been greatly reduced or even avoided with better visibility across the entire chain, and thus accelerated production by visualizing blocking points along the entire value chain much more quickly.
However, some suppliers do not reveal information to end customers, even though it is easy to do so. The fear of losing their commercial advantage by making their activities, prices and sources of supply visible to customers is to blame. Suppliers should be able to control exactly who receives this data from them, and verify these controls independently.
Only, when the data contained in these communications has to be distributed to more than two parties, traditional supply chain systems, which are centralized, cannot grant independent and verifiable access controls to each party. Blockchain's decentralized system is the best way to give suppliers the confidentiality they need, and buyers and value chain stakeholders the visibility they require. Suppliers can then directly verify their data-sharing authorizations, which can then be securely distributed to other members of the network. The World Economic Forum, in one of its latest reports on supply chains, argues that a decentralized system using blockchain perfectly meets this need.
The potential of blockchain demonstrated in times of crisis
The benefits of blockchain solutions, highlighted by the current crisis, will enable us to test their usefulness and demonstrate their impact in terms of efficiency, transparency and data security. Many will then understand that it saves a great deal of time, notably by not having to go through the "digitization" stage, but by moving directly to "transaction validation" without the transmission of any documents whatsoever.
In order to accompany the large-scale deployment of these solutions, support and a favorable legal framework from government policies are essential. With the current pandemic, the role of the state is increasing. Government intervention will therefore play a key role in these upheavals in the digital and economic landscape. Indeed, the most developed states and investment funds will be taking over the management of privatized companies. This applies to companies that were considered natural monopolies before globalization, as well as strategic companies with liquidity problems. As for the populations of less-developed countries, they could revolt in the face of a disastrous health and economic situation, triggering profound geopolitical changes. In terms of regulations, governments will adapt their rules to facilitate the digital services that will have been massively adopted during this period of confinement.
Although society will tend to return to normal, gradually resuming its course, the digital tools proving their benefits during this confinement will remain. The current health and economic crisis has revealed the strong potential of blockchain in many applications, providing tangible and unique solutions for individuals and businesses alike.
