The tokenization of assets; a bright future for blockchain
The vast majority of people who have ever sent cryptocurrencies from one end to another know that the transaction is confirmed by the blockchain network and that this transaction can be verified and confirmed in the blockchain explorer at any time because it is public information that anyone can access. Blockchain is a shared and immutable ledger that facilitates the process of recording transactions and tracking assets in a network.
The blockchain network has features such as decentralization, security, traceability, transparency, and immutability (it cannot be altered, modified or deleted); this has aroused the interest of many companies that daily face complex problems and challenges, so more and more are resorting and implementing solutions based on this technology: Developing private blockchain networks that allow the tracking of products and their distribution lines, the tokenization of assets for the verification of the authenticity or ownership of that asset, the certificate of origin of a product among many more applications. Companies such as Manpower (NYSE: MAN), a global leader in workforce recruitment, have seen a considerable increase in requests from their clients for blockchain specialists to meet the growing demand for blockchain professionals.
DocuSign (NASDAQ: DOCU) is a company that allows organizations to manage agreements and sign them electronically; DocuSign has announced an integration with the Ethereum blockchain, allowing proofs of agreements made in DocuSign to be automatically written to the Ethereum blockchain network. Anyone with a copy of the agreement can check it against the proofs stored on the blockchain to verify the integrity of the copy against the original DocuSign file.
Some leading pharmaceutical companies such as McKesson Corp (NYSE: MCK), which distributes drugs at the retail level and provides healthcare information technology, medical supplies, and healthcare management tools, as well as Pfizer Company (NYSE: PFE) and Bayer (BATS EU: BAYN), leading global pharmaceutical laboratories have jumped on the blockchain technology bandwagon to implement it into their processes and protocols in supply chain management to resolve issues between contracting and reimbursements in the pharmaceutical industry.
These companies, in conjunction with other pharmaceutical companies, are also funding research projects to create a public blockchain network where consumers can consult a purchased medicine and know its origin, date of issue, laboratory, etc. and be able to mark it in the blockchain network in order to avoid counterfeiting and smuggling.
Speaking of smuggling, counterfeiting, and piracy: we are all aware that this is a serious problem faced by large companies in the area of footwear, clothing and accessories manufacturing; it is estimated that the business of counterfeiting and piracy generated more than $600 billion in profits, equivalent to 2.5% of world trade, hitting directly into the pockets of investors of companies like NIKE (NYSE: NKE) which is the most counterfeited brand in the world and its fiercest competitor Adidas (BATS EU: ADS).
In some countries, it is surprisingly accessible to purchase counterfeit items that are close to impossible to distinguish from the real ones for the untrained eye, and this is another challenge that blockchain can help mitigate with the use of its unique properties.
After Nike (NYSE: NKE) stopped selling its products on Amazon (NASDAQ: AMZN), they decided to bet on blockchain technology to combat piracy, counterfeiting and smuggling. The technology, registered with the U.S. Patent and Trademark Office as “Cryptokicks,” allows Nike to digitally track the ownership of a group of shoes in circulation.
Companies wishing to implement this type of technology in their production, distribution or other processes can outsource this integration service to companies like Accenture Limited (NYSE: ACN), which is a multinational technology services company. One of its flagship services is helping companies harness the power of blockchain with real-world applications in strategic areas such as products, finance-related and transactions.
We do not know what will happen or what the fate of cryptocurrencies will be; what seems to be certain is that the technology behind them is just beginning to show its potential and what is possible. For now, it presents the solution to complex problems that companies have been facing for years. The evolution of this technology will depend merely on its adoption and the funding allocated to its research.
The benefits outweigh the challenges of adopting this technology. Soon it could be a widespread solution to many supply chain challenges; companies like Restaurants Brands International (NYSE: QSR) will be able to know with certainty the origin of coffee beans purchased, or consumers will be able to know the origin of the cocoa in their favourite chocolate like Hershey (NYSE: HSY) or Mondelez (NASDAQ: MDLZ). Some researchers speculate that in the future, we will be able to track them using molecular information embedded in the product’s own DNA, leaving a fingerprint that can be traced on the blockchain. The possibilities and applications of this technology are endless and are yet to be discovered.