Blockchain became a buzz word by 2017, made famous by the single-use case that for many people seemed almost synonymous with Blockchain –Bitcoin. The question on people’s minds was: “What is blockchain, and how can I make money with it?”
What really drew attention was the valuation of a single Bitcoin hitting an astonishing $20,000 in December 2017, a peak that it has not been able to climb again after rolling back down to $3,000 within a year.
But the blockchain rush was on. Investors were frantically pouring money into blockchain startups that promised to solve all imaginable problems across all fields and industries. In some cases, simply adding the word Blockchain to the company’s name could lure novice investors spurred by FOMO. Alas, many of these people were soon faced with dreary reality. Blockchain was not a panacea, nor a silver bullet, and many of the problems that the legion of budding startups promised to solve would have to be solved by other technological breakthroughs.
The ebbing wave of blockchain popularity left a lot of distaste among venture capitalists. New startups developing innovative solutions with Blockchain would now have to work against a stigma attached to this technology. So, are there realistic use cases for Blockchain outside of the flourishing variety of cryptocurrencies? Here is one example: Minespider. Based in Germany, this startup is creating blockchain solutions for the minerals mining industry. The company developed a protocol to track raw materials from the moment they are extracted from the ground to when they are delivered to the end-user in the form of a manufactured product. This is what is known as a source to product tracking.
The goal is for end-users to be able to trace the provenance of all materials used in the finished products they purchase. Ideally, the user would be able to scan a QR code on the product and see where all the raw materials came from. The tracking data would be structured as a tree with branches for all components of the finished product.
Most IT industry giants today use minerals and precious metals to build their electronic gadgets. The raw materials used to manufacture the gadgets we use can come from areas in conflict zones and places where human rights are easily violated. The US passed a ‘conflict minerals’ law in 2010. In 2017, EU passed a regulation for importers of tin, tantalum, tungsten, and gold. These are some of the raw materials used in electronics. The regulation is coming into effect in January 2021.
Blockchain solutions can help manufacturers and importers demonstrate that they are compliant with government regulations. What does the future hold for Blockchain? First, we believe that the term Blockchain will be replaced by Distributed Leger Technology. The future of it could be in use cases related to accountability, sustainability, preserving the environment, and protecting human rights around the world.
More and more people will care about where things they buy come from. Consumers will want to know that the products they buy do not harm the environment. New compliance requirements will force big companies to be more responsible in regard to the origin of raw materials and how they are mined. This is where startups that offer compliance solutions based on Blockchain could find new opportunities.