In recent years, Blockchain has benefited from an increase in well-informed users and ever more technologically aware governments, organizations, and institutions. As we all learn about the nascent capacities of the tech, we see that, on the one hand, it can help users privatize their personal data, and on the other, just how transparent it also is. Both are inevitable elements of blockchain technology, though the latter is our concern today.
By their very nature, most blockchains are fully transparent; you can search them like Google. Every transaction, all related wallet addresses, and any associated meta-data in any transaction are on full display. Furthermore, clicking on any wallet address in your search opens up its entire history and current content, including coins, tokens, and NFTs. In fact, these systems are so see-through that in situations of theft, crooks sometimes simply send back their ill-gotten gains––as was speculated about after last year’s widely publicized hit involving over $600 million in Ethereum that the bandits called a “joke.”
The potential for companies to leverage blockchain transparency as a differentiator is the next frontier in customer relations and marketing. Think trustless voting systems, fully reliable car history data, or detailed ingredient sourcing that finally makes you the decision-maker when looking through your favorite menu. So should we expect every company to be jumping onto this technology in short order? In this article, we will consider both the exciting possibilities and the potential risks for companies considering this future. We will finish by exploring ways we can all help broaden the base of informed individuals who might choose to take part in this powerful aspect of a web3 world.
Assessing the Risks of Transparency:
To begin this purposely-short list, only here to open the conversation (comment other ideas below), is the potential liability of making public mistakes in front of a worldwide audience. Everything from sharing details of board minutes that come back to bite you in the ass to the public embarrassment of a financial error on a spreadsheet permanently linked to the Blockchain––something that would have been handled behind the scenes if kept private. Cardano Developer, Adam Dean, stated in a recent Lido article: "…whatever we put on the blockchain can't simply be rewritten or erased…that information will be there as long as the blockchain is around." Thus, when considering what we want to share, we must do it knowing there is no taking it back. Linking a private blockchain to a public one may be one way around this concern. However, we may find that an ever increasingly-informed public may want greater transparency, which takes us to the following risk.
The reality of opening Pandora's box is one that any company should consider. Adding one aspect of your business to the Blockchain may conjure up customer demand for ever-greater forms of transparency. What if a candy company that began experimenting with the new tech ends up in a situation where their patrons eventually request ingredient origin data on the public-facing Blockchain they've grown used to? If you've watched any of the numerous documentaries on the production of ingredients such a company buys, you know where this is going. As there have been many highly unethical practices linked to such companies, if the business hasn't researched its suppliers, there's a considerable possibility they could receive a lot of backlash from a more informed clientele.
Finally, differentiating yourself from your competition is standard business practice for creating loyal customers. However, certain advancements could be looked down on by industry neighbors. This came to mind when I recently spoke to Ben Grimes, a kind-hearted poultry producer from the east coast whose farming practices are so open that they are all but live-streamed to his customers. That thought-provoking conversation with the owner of Dawnbreaker Farms inspired this entire article. (Thanks, Ben!) Though his business data isn't on any open-ledger system––at his size, transparency literally looks like driving up the gravel road to his 20-acre farm and ringing the doorbell––I found the example of his transparent practices inspiring for this segment.
The largest producers in his industry are on-record for spending millions of dollars (combined) per year on lobbyists to keep their lawful (but unethical to many) treatment of animals under wraps with gag orders and the like. Are small farms like Ben's at risk of being looked down on by other much larger producers in the industry that pay for privacy and silence? Likely not––they have two different customer bases. Though we can imagine if a much larger producer opened their doors and displayed their ethical treatment of animals, it's clear that there would likely be financial incentives for others in the industry to see them as disruptors at best. Does that mean we should abandon differentiation ideas in sensitive areas of our businesses? Not at all. What is important is that companies consider the risks of going against the grain so they can have a plan for what may come from implementing such ideas.
All that to say, Blockchain is a completely disruptive technology. Its growing implementations take us farther and farther away from legacy systems of all kinds. Many will see the use of the technology as a threat. Being mindful of that can help us be ready to build more bridges that help people understand the benefits of this kind of advancement.
Building for a more transparent future
With as few blockchain users as there are in the world today, it's clear that many people who will someday create untold stories of success and advancement using the Blockchain have yet to use it. Broadening that base is paramount to future success. So to finish up, we'll think about ways to expand the pool of knowledgeable potential users to ensure we are doing our part. As you read through these ideas, please add any others that come to mind in the comments!
The necessity of educating:
Teaching the young about cryptocurrency, the value of transparency, and how it can transfer into prosperity for many is indispensable in a list of ways to grow the industry over time. This could look like writing a grant proposal (Project Catalyst, perhaps? More on this below.) to start a youth/college club about cryptocurrency and help educate a new generation about Cardano and the entire Blockchain space. If you are an educator, perhaps you might take some inspiration from the Cardano Research Lab at the University of Wyoming or look at joining forces or developing something similar in your Institution. No matter what, helping the young learn about blockchain technology now is a big win for the longevity of the tech.
Where we spend matters:
Where we put our money is what ultimately matters to businesses. If there is greater demand for transparency in a particular market, it becomes profitable for companies to steer their production in that direction. Perhaps it won't happen overnight, but specific industries are ripe for change now. Today, it's become commonplace to see companies being asked for greater and greater amounts of transparency all over social media. As those users become aware of the potential of applying Blockchain to some of these industries, they'll become more adept at asking for this kind of advancement.
If you own a business and putting some of your information on the Blockchain would be valuable to your customers, consider doing it! You will help the space in general and inadvertently educate more of the public as you show them how to access such information.
Finding like-minded people:
Fighting for ethical transparency in big business is one thing. Still, another route is finding like-minded individuals/companies and partnering with them to help them build the transparency they'll benefit from. If, in doing so, your conversation and potential partnerships lead you to the inevitable question of funding, consider collaborating on a proposal through Project Catalyst. This large treasury on Cardano offers grants to individuals and collectives looking to build use-cases on the Cardano blockchain.
It's worth noting that several other blockchains, some built for entirely different use-cases than Cardano, also offer such grants for builders creating solutions on their own open-ledger systems. Any one of them comes with its own version of a community, and many of those individuals may be looking for someone with your talents to help them create what they are looking for––I assure you, opportunities abound!
The internet created the need for brands to adopt or grow a sort of "personality" for the first time. Now Blockchain is beginning to call on them to choose their level of transparency. We think that, over time, customer demand will push others to be ever more open with their inner workings. Where is your company at regarding the ability to show what's going on under the hood in a way that benefits you and your customers? Is such demand picking up in your industry? How important is getting ahead of that curve, and what does that look like for you? Sound off in the comments below or tweet us your thoughts on these and any other questions that come to mind!