Five Ways Blockchain Technology Helps Transform Businesses Part 2

Verification of identities and ownership of assets.

 

Today it is possible to duplicate almost any digital information, including pictures of people, music, and data, with just a few taps on a screen or a few clicks of a mouse. Because of this, keeping track of the rights, identities and ownership has become extremely complicated. Governments have systems that are not connected to each other and tracking international property rights and patents can be a nightmare.

For example, in the United States different local authorities may have different records about property ownership. One record may indicate that party A owns the property and a record in a different office will say that the legitimate owner is party B and not party A.

This is the reason why most real estate transactions need due diligence and come with a lot of legal expenses. Ownership of all kinds of assets may include problems that are not there until they are. Someone may do their due diligence and think that everything about their asset is fine, until it turns out that there is a record in a remove county’s clerk office that contracts other records and suddenly things are not fine and the person has a huge problem.

Blockchain technology could be of huge help here. Governments and other parties wouldn’t even have to store actual records on the blockchain for privacy reasons. All they could store is data points that refer to actual records.

This way, when somebody is checking a property or an asset, they could see that there are X records about the asset. Then, they could go and find those records. In complex transactions, it is often not the number of records that is a problem. The problem is not knowing how many records there are in total and where they are located.

Companies could store information about people and identities in a similar way. For example, in 2017 Massachusetts Institute of Technology gave over 100 graduates an option to receive their diplomas in digital format on a blockchain in addition to getting a regular paper diploma. The blockchain is connected to an app on a mobile device and it allows students to show their diploma when they want to whomever they want.

For privacy reasons, the blockchain itself does not store any diplomas. After a student downloads the app on a phone, the app creates a combination of keys, a private key and a public key, similarly to how a user would create a pair of keys on the Bitcoin or other cryptocurrency networks. After this happens, the student sends his or her public key back to the MIT and the educational institution adds a record to the blockchain that indicates creation of a record with a diploma. Next, MIT emails a file to the student that contains the actual diploma. The student can prove that he or she owns the document by matching the file with the private key located on the device.

The same principle would apply to proving ownership of music, art and other assets. For example, in May of 2018 Kodak has announced that it was planning to raise USD$50 million to create an image protection platform based on blockchain technology. After the company first announced that it was developing a blockchain for images in January of 2018, its shares went up over 200% with the volume of trading of the shares going up by more than twenty thousand percent.

Kodak was late in adoption of digital images and technology, which was the reason why the company has eventually declared bankruptcy. By developing a blockchain network called KodakONE and partnering with a photography agency WENN Digital that has over 5,000 photographers, the company hopes to reinvent itself and its business model.

Kodak is not going to be the only player in the market. Photochain is a project that helps creators of photos monetize stock images. Blockchain network Po.et has already raised millions of dollars and is working with publishers of all types of content.