In a year of record highs, Bitcoin continues to defy expectations. With Tesla announcing a move to transfer roughly 8% of its reserves into Bitcoin, the cryptocurrency’s price climbed to $47,000, only to be eclipsed days later. Having reached a lifetime high of $58,000 last Sunday – up nearly 400% since March of 2020 – the frenzy has captured the attention of both institutional and retail investors alike.
As was the case in the early days of the internet, a great deal of confusion surrounds Bitcoin. Today, though, the onlooker must navigate a deluge of information pouring in from subreddits, twitter threads, blog posts and perhaps the occasional meme. And yet, despite the murkiness of it all, the allure remains.
In its most simple form, Bitcoin was created to serve as peer-to-peer digital currency that could be exchanged across a decentralized network. In other words, buyers and sellers of bitcoin interact directly with one another in the absence of a central authority or intermediary, allowing users to transact freely and in near real-time. Put more succinctly, Bitcoin is like “magic internet money”, making your computer or smartphone your wallet. Now, whether or not Bitcoin exists today as creators intended is unclear; some will say so, while others contend that it is on track to become more of a store of value like gold.
The promise of bitcoin, that being an expanded digital frontier wherein value creation and transferral is financially inclusive and technologically accessible, is no small thing. Recent and growing mainstream acceptance only confirms Bitcoin’s potential for becoming a widely accepted medium of exchange. But what about Bitcoin’s underlying technology? What might the future have in store for the software poised to restructure the financial-services sector? To answer this, we must move outside of the trading bubble.
For as much attention as Bitcoin receives, its blockchain foundation goes relatively unnoticed in many industries. And yet, without it, Bitcoin would not exist. Founded in 1991 and popularized by Bitcoin’s pseudonymous creator, Satoshi Nakamoto, Blockchain is an open-source processing mechanism used to track and verify transactions.
Provided that Bitcoin was the first implementation of blockchain technology and remains by far one of its most successful applications, it is often studied within the context of finance. While understandable, to limit blockchain to the world of financial transactions is to greatly undervalue its power. Unlike the audit logs of central databases, blockchain frameworks can securely store cryptographically verifiable data, delivering a degree of transparency to trust-dependent processes like supply chain management.
Beyond Bitcoin, blockchain technology finds its strength in its ability to record and store data in a way that is immutable and therefore tamper-proof. Through the use of a public or permissioned ledger system, multiple parties are able to share and verify time-sensitive data, thereby streamlining internal and external business processes.
In the case of value chain management, blockchain’s ability to synchronize activities from point of production to point of sale (and beyond) has great appeal. Layer on the unique needs of established industries like that of healthcare, and ambitious goals for transforming linear, wasteful supply chains, and the implementation of blockchain technology takes on new meaning. How is it, though, that blockchain is best suited to usher in a new era of circularity within healthcare and the life sciences?
At Polycarbin, our line of work involves three separate, but reliant actors, waste management professionals, recyclers, and lab product manufacturers. Here, each member along the value chain operates under the same metrics of throughput and efficiency, making automation an integral part of operations. Taking these two considerations into account, where the value of truth (dictated by the number of parties) and the value of automation are high, we enter into what the Boston Consulting Group refers to as the “blockchain sweet-spot.”
Until recently, waste professionals, recyclers, and lab product manufacturers have lacked the visibility – and therefore the trust – needed to collectively build out a circular economy. By leading with a blockchain-enabled logistics strategy, entities are able to interact on a common platform where they can share pertinent information, while keeping all else private. These missing ‘blocks’ of data, whether that be the purity of a given waste stream or the quality of a particular resin, will not only demystify the value chain, it will inform the material management process.
While we find ourselves in the early stages of the blockchain rollout, in order to access the technology’s full and eventual potential it is necessary that we invest now so that we can then scale later. Just as the advent of the internet demanded transformation, the era of blockchain calls for one of its own.