Still reeling from its recent data leak scandal, Facebook this week announced it is forming a new team to focus on blockchain technology—but it didn’t explain why.
IBM’s top blockchain expert, however, has a theory, and she thinks Facebook’s intentions are good.
“For Facebook, the fundamental issue that they’re grappling with is very suited to the technology of blockchain,” Bridget van Kralingen, IBM’s senior vice president of global Industries, platforms and blockchain, said on Coins2Day’s latest episode of Balancing the Ledger. “So what they are grappling with is securing data, and making sure that if people want privacy or trackability of their data they can actually secure that—whether it’s on the ad side or the personal side.”
In addition to securing data, blockchain technology could also help Facebook (FB) with its problem of fake news and Russian-funded political ads. In April, Facebook announced new policies requiring political advertisers to verify their identities and locations, pledging to comply with all U.S. Laws, which prohibit foreign powers from contributing to American political campaigns or election efforts. Blockchain technology could make this easier by tracking the provenance of the advertising dollars, added van Kralingen, who oversees more than 1,500 people at IBM (IBM) exploring business use cases for the technology that underpins Bitcoin.
“So I think it’s a technology that fits very well with some of the business model challenges that they’re actually facing, and I think they’re very right to take this very seriously,” she told Coins2Day’s Robert Hackett and Jen Wieczner.
Because blockchains are built upon a foundation of cryptography, the technology enables users to set permissions for who can access any data tracked by a blockchain—whether that be their social media activity, medical records, or sensitive personal information (say, their credit history or social security number). That also opens up new possibilities for how blockchain technology might be used to safely authenticate that a person is who they say they are, van Kralingen added. “We would then control our own identities, versus somebody controlling our data today, which I think is very powerful,” she said.
Van Kralingen also outlined a host of other ways IBM’s blockchain technology—which is being used by companies including Unilever, Nestle, Dole, and Kroger—is already changing the way companies do business, and even impacting consumers’ lives, from going grocery shopping to buying engagement rings.
IBM client Walmart (WMT), for example, is tracking the supply chain of the fruits and vegetables it sells on a blockchain, potentially allowing it to quickly get to the root of a problem and do an “instant recall” if necessary, she said. For example, when the recent romaine lettuce E. Coli outbreak was traced back to a region in Arizona, Walmart could have pinpointed which of its products came from from the contaminated area in just two seconds—and immediately pull them from shelves. (While hundreds of Walmart items have been loaded on to IBM’s “food trust” blockchain, that does not yet include every brand of romaine or salad mix, so the retailer was not able to fully rely on the blockchain for the recent recall.)
Without the use of blockchain technology, it would have take Walmart almost a full week to figure out if it needed to recall any of the foods it sold. And without knowing which exact products were compromised, the company might also be forced to dump its entire romaine lettuce inventory; after all, 30% of the world’s food supply currently goes to waste, van Kralingen added.
Now, Walmart is even emailing customers it believes purchased the bad lettuce prior to the recall to warn them of the potential for illness.
Hi Heather – It appears to be. There is currently a recall on some romaine lettuce. Please reach out to our Marketside team at 1-888-658-6325 to confirm and for further instructions. Thank you.
— Walmart Help (@walmarthelp) April 16, 2018
IBM also sees the potential for blockchain technology to encourage philanthropy by tracking charitable donations—both where the money came from, what it was spent on and who received the donated goods. Now, through a partnership with Global Citizen announced Friday, IBM is challenging blockchain developers to create networks on its platform to accomplish this. By participating in the two-month challenge starting May 15, developers will be eligible for perks including tickets to the Global Citizen music festival in New York in September.
For companies, the ability to prove the origin of a product can also make it more valuable, leading to increased sales, van Kralingen added. In late April, IBM unveiled a new first-of-its-kind blockchain for tracking diamond rings, a system it calls TrustChain. “You can buy a diamond ring that you know has been mined and produced in a sustainable, ethical way, and that’s really significant, because 73% of millennials will pay more for something that is actually sustainably and ethically sourced,” van Kralingen said. “So that’s one way it will change your life.”
And that’s just for starters.
This story has been updated to clarify that Walmart is not yet tracking all kinds of romaine lettuce on a blockchain.
