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Tuesday 11 December 2018, 09.04
Many think of the blockchain as a technology exclusively linked to the digital currency, which was its original purpose in 2009.
Blockchain has evolved into something much more than the use of cryptocurrency. In a broad sense, blockchain allows to store and distribute digital information without requiring a central part, through a shared and continuously reconciled database, which database is public (not stored in a single location) and easily verifiable. Blockchain is able to record and track a multitude of transactions, from financial, to supply chains, real estate records and medical records.
The emerging technology that underpins the network is a powerful tool that should be sensibly understood by business leaders in order to evaluate the potential return on investment of a blockchain. Technology should be seen as a means of addressing a specific need with respect to a goal in itself or a single solution for all problems.
Before fully embracing the potential of the blockchain, one will probably wonder what the benefits are for implementing a blockchain network over a traditional network and what the costs and risks are.
To respond adequately to these questions, it will first be necessary to identify and understand the problems that a company is trying to solve and the added value that blockchain technology will provide to a particular use case.
One of the most relevant use cases of blockchain technology is its application in the logistics chain and in the logistics industry. The number of intermediaries involved in a supply chain, ranging from manufacturers to suppliers and distributors, creates a huge need to establish a level of trust between the various parties involved to ensure that the final product is authentic and delivered to the customer efficiently. and the highest quality standards.
The consumer who buys the product wants to ensure and verify the authenticity of the product and to ensure that the product is released from illegal practices and is not counterfeited. Because of the complexity and lack of transparency involved in current supply chains, there is an advantage in applying blockchain technology that will ensure that all levels of a supply chain are recorded, archived and verified on a blockchain.
Blockchain technology adds value by basically eliminating the need for trust between multiple parties involved through an immutable book of transactions that does not have a single point of failure.
Blockchain creates trust and transparency in the archived and disintermediate data relying on a party or a centralized authority. The information, once stored on a blockchain, is verified as true and can not be tampered with, so the parties will rely on the technology rather than the parties involved.
The information, once stored on a blockchain, is verified as true and can not be tampered with
Tracking and recording of blockchain data takes place through the storage of digital data on blocks, which once locked are then chained together in a continuous line to form a blockchain. Once the blocks have been confirmed, the data stored on each block can not be modified and therefore are considered immutable and is publicly available for anyone to view them.
Designed to be decentralized and distributed over a vast network of computers, whose decentralization of data storage reduces the ability to tamper and fraud to stored data.
Food safety and traceability are another industry that is seeing transformation on the blockchain.
It is imperative to have accurate records that track each food product back to its origin in order to comply with food safety regulations, but this requires a level of trust in the supply chain business partners.
Walmart is studying the supply chain transition to a blockchain to track food, such as pork from China and information and documents on the origin of each piece of meat, how it has been manipulated, processed, stocked and delivered to distributors.
In September, Walmart announced that it asked all its suppliers of particular vegetables to upload their data on the blockchain by September 2019, ensuring that the food safety process was more traceable and transparent to final consumers. Turning to a blockchain supply chain, Walmart found that, in terms of the time needed to track the course of certain foods, this could be reduced from around seven days to a few seconds.
To the extent that your business does not require the need for a shared shared database for information distribution and does not involve multiple parties that have conflicting interests and / or do not trust each other, the use of blockchain technology may not necessarily result in added value or return on investment. Evaluating the return on investment that blockchain technology can bring to a company can be a daunting task; however, exploring the cases of use and learning from the blockchain community that is already building networks can provide valuable information.
Malta has differentiated itself through the implementation of a legal framework governing virtual financial assets and also a separate regulation that will provide the possibility of certification or recognition of technology agreements. The regulation combined with the implementation of use cases for blockchain technology is essential to ensure a transparent and budding ecosystem.
Christina Scicluna is a senior associate in the corporate and fintech department, Mamo TCV Advocates. He started his legal career at one of the four large companies in the personal tax industry, specializing in personal tax consulting and personal tax consulting services, including the advice of people with high net worth on taxation and immigration. Dr. Scicluna advises several multinational clients on international corporate structures. He also served on the internal Blockchain Committee at the company that was established in September 2017 and is now known as the fintech department. He deals with all legal issues related to blockchain, fintech, cryptocurrency, Initial Coin Offerings (ICO), exchanges and distributed ledger technology projects.
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