Building Trust Through Transparency: Blockchain technology provides practical applications for Alaska's industries.

• Author: Barbour, Tracy
• Position: TELECOM & TECH

Blockchain, an innovative virtual distributed ledger system, is one of today's most cutting-edge technologies. The technology's key ingredient is its element of traceability--and it is changing the way the world does business.

Many people are aware of blockchain as the technology that enables the existence of cryptocurrency, a form of digital asset which is secured by encryption, rendering it immune to counterfeiting. But blockchain can be applied to numerous applications including supply chain logistics, seafood, financial, healthcare, insurance, trucking, and oil and gas. So far in Alaska, the seafood industry is delving into the use of blockchain technology in a variety of ways.

So, what exactly is blockchain? At its most basic level, it is digital information (the block) stored in a public database (the chain). Blockchain is an immutable ledger for recording transactions and tracking assets, and the technology exists as a shared database filled with entries that must be confirmed by peer-to-peer networks and encrypted. Because of this, it can create an indisputable, tamper-proof log of sensitive activities. This makes blockchain more than a technology. As IBM describes it, blockchain is a "movement" that can help many industries redefine their most important relationships through trust, transparency, and collaboration.

Blockchain has the potential to vastly improve the current global supply chain, and Alaska will ride this wave and benefit, along with everyone else, according to Glen Kratochvil, a blockchain aficionado and owner of Alaska Computer Guy. His Anchorage IT support and computer services firm is among the few Alaska businesses that accept cryptocurrency as a form of payment.

Characterizing the importance of blockchain, Kratochvil says: "Thousands of years ago when human civilizations began trading with each other, all commerce was local, and trust was not an issue because the different participants knew each other. Today's global supply chain has dozens or hundreds of steps between producer and consumer, with raw materials being sourced from different companies and suppliers around the world.

"Tracking each step as a product is transformed from raw material to finished good is a difficult and expensive process, rife with opportunities for fraud or manipulation of the data," Kratochvil says. "It is currently tracked in many cases with legacy tracking systems, which make the data difficult to obtain, hard to monitor, and often impossible to verify. Improvements to this broken supply chain would benefit everyone by saving time, increasing trust, reducing cost, and lowering risk."

According to Kratochvil, Alaska businesses are likely using blockchain without even knowing it because of changes and improvements that are quietly occurring behind-the-scenes in many different industries. For instance, Wells Fargo is partnering with others to develop a blockchain solution to more easily track and record mortgage payments. Walmart uses blockchain in parts of its supply chain tracking for food and produce. Popular money transmission service MoneyGram is using Ripple's blockchain to expedite payments and to reduce fees for national payments. And Microsoft, American Express, Walt Disney, Google, Bank of America, and several large insurance companies are also either researching or actively developing blockchain projects of their own.

"These products and services will continue to trickle down and impact businesses at the local level as they are brought to market...