Blockchain and new trust economy

In the next years, more businesses will turn to blockchain to establish trust among parties, which want to transfer everything from money and movable goods to property.

So, enterprises are expected to use blockchain technology as part of a new method of establishing trust in a digital economy.

Nowadays, a "trust economy" is developing around person-to-person (P2P) transactions, which are using blockchain technology that dependent on traditional methods like credit ratings or guaranteed cashier's checks.

So, this “trust economy” relies on each transacting party's reputation and digital identity, which may soon be stored and managed in a blockchain network.

For example, in the case of individuals, the "trust economy" elements could include financial or professional histories, tax information, medical information, or consumer preferences. Actually, companies could maintain reputational identities that establish their trustworthiness as a business partner or vendor.

How blockchain builds trust

The blockchain is a public electronic ledger, which is similar to a relational database. This ledger is public, which means that everyone can see it. So, it can be openly shared among disparate users to create an unchangeable record of their transactions. And, each of these transactions is time-stamped and linked to the previous one. Furthermore, each digital record or transaction in the thread is called a block. This block allows either an open or controlled set of users to participate in the electronic ledger (smart contract). Additionally, each block is linked to a specific participant. 

The blockchain is a very secure system because its smart contracts can only be updated by consensus among participants in the system. Furthermore, this is because when new data is entered, then it can never be erased. In the case someone wants a change, then a new smart contract should be done. Furthermore, the blockchain contains a true and verifiable record of each and every transaction ever made in the system.

Blockchain databases are like a peer-to-peer (P2P) network because these blockchain databases are combined with distributed time-stamping servers. Furthermore, blockchain databases can be managed autonomously to exchange information between disparate parties. There's no need for a middleman (or an administrator).

In the “trust economy”, an individual's or entity's "identity" confirms membership in a nation or community, ownership of assets, and entitlement to benefits or services Furthermore, this entity’s “identity” evidence that the person or entity exists.

Furthermore, blockchain solves data access, sharing issues, and a confidence problem.

In the peer-to-peer (P2P) “trust economy”, an individual user will determine what digital information is stored in a blockchain (ledger) and how that information will be used. Blockchain users will work toward creating a single digital representation of themselves that can be managed and shared across organizational boundaries.

With that kind of identity, users may store: 

·     Digitized renderings of traditional identity documents

·     Ownership documents and transactional records

·     Financial documents

·     Access management codes

·     A comprehensive medical history

So, blockchain can provide individual users with unprecedented control over their digital identities.

Supply chain blockchains

Supply chain management is an app that is used by companies that are interested in enterprise blockchains. 

Companies use this supply chain management (app) for the goods that move from one place to another in order to keep track of how goods are moving and where they are.

Furthermore, a company can also create private or “permissioned” blockchains. Furthermore, trusted partners and centrally administered can create private blockchains too, which offers control over who has access to information. 

The three levels of blockchain in a digital trust economy. 

So, “trust economy” has a freedom because you are able to share whatever you want, whenever you want it, which is immutable, trusted, and secure. 

For example, IBM and Maersk (Danish shipping giant) have deployed a blockchain ledger to manage and tracking shipping containers that are moving around the world. So, they are digitizing the supply chain process.

So, Maersk's blockchain is like a ledger that can be used for auditing purposes, and this ledger can be shared openly with partners and customers in real time. This blockchain-based system also allows parties to settle the terms of shipping costs faster than any traditional system.

Actually, Maersk rolled out a 20-week blockchain proof-of-concept for marine insurance. This blockchain-based system was used as a way to share shipping information between insurance providers.

IBM, blockchain, Maersk Maersk

Actually, the ocean shipping industry carries 90% of goods in global trade. The blockchain-based system (from IBM and Maersk) can manage and track the paper trail of tens of millions of shipping containers worldwide. Furthermore, this blockchain-based system is digitizing the supply chain process.

Other uses for blockchain

The blockchain networks can be used for "smart contracts", which are scripts that automatically execute when certain conditions are met. For example, a smart contract could be used between users of Ethereum's exchange. These users of Ethereum's exchange must meet pre-determined conditions that prove that they own the Ether (cryptocurrency) and have authority to send the money they claim to own. Furthermore, multiple blockchain users can create smart contracts that require more than one set of inputs to trigger a transaction.

The blockchain is a decentralized technology, and it is what makes it so effective for cross-border transactions. Furthermore, goods, money, or cryptocurrency scattered around the globe cannot be easily regulated because blockchain users are distributed worldwide. 

This blockchain technology is very secure because each asset (cryptocurrency or good) is verified via the immutable ledger tied to a specific hash and user. Furthermore, the cryptocurrency or goods can't be sold or transferred to more than one entity at the same time. For example, you can't transfer cryptocurrency (or any asset) at the same time to buy goods. 

Actually, this blockchain technology can be used for properties in order to avoid property disputes because it can only belong to one person.

Actually, public blockchains are self-regulating because if one blockchain user gains more than 50% control of a public network, then its value as a distributed ledger drops. In the case this blockchain is used for trading cryptocurrency, then the value of the cryptocurrency also drops.

The blockchain is distributed and immutable, which makes it more secure than even a centrally managed relational database because there are so many nodes that are hard to hack all of them at the same time. In a blockchain network, there are typically thousands of servers sharing the blockchain data and any change to the information requires agreement among all the users (or nodes). Furthermore, it is impossible to make a change, in order to make a change then a new smart contract should be done, which requires the agreement among all the users.

In “trust economy”, blockchain is like public ledgers that were used to record everything of importance such as the buying and selling of goods, the transfer of property deeds, births, marriages, deaths, loans, election results, and legal rulings. 

A blockchain uses advanced cryptography and distributed programming to have a secure, transparent, immutable repository of truth (ledgers), which is one designed to be highly resistant to outages, manipulation, and unnecessary complexity.

Furthermore, the blockchain technology and the “trust economy” trend represents a remarkable power shift from large, centralized trust agents to the individual.

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