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maltatoday, SUNDAY, 9 JULY 2017 VI Business & Finance CONCEIVED in 2008, the blockchain is among those much talked-about new devel- opments, but one that you may not have felt the effects of. Yet. Uptake of this disruptive technology is growing and major brands and tech compa- nies are starting to explore what this means for retail. What is the blockchain? Blockchain is a way of digitally record- ing data and transactions. Each record is a 'block' linked chronologically together in a 'chain', which shows all activity. There are two main types of blockchain – unpermis- sioned and permissioned. Unpermissioned blockchain uses open distributed ledger technology, which means that the information isn't owned by any one person or database. Instead it is shared across all the different computers in the network. Anyone can join the network and view the transaction records it holds. Once a transaction has been recorded the data stored is timestamped, so it can't be de- leted or edited in any way. Any subsequent additions to the ledger or new records are tracked and updated in real-time for every- one with access. Because of its distributed nature blockchain is difficult to hack as all of the copies are located in different places. Permissioned blockchains work in ex- actly the same way, but offers the ability to restrict who in the network can authorise transactions. This makes it a better option for tracking house sales for example as it means only approved parties like estate agents can validate a sale. What can the blockchain do? The most well-known use of blockchain is the digital currency Bitcoin. Blockchain is the underpinning system used to track all Bitcoin transactions. However, the blockchain can be used for more than just financial transactions. It can securely record any sort of data from deeds to intellectual property to art to contracts. The technology helps to minimise paper- work and speed up transactions, which in turn lowers costs. For a short time there was even an entire organisation and capital fund, the DAO, that operated on the blockchain. How does this apply to retail? The possibilities for retail are already emerging as part of the wider capabilities of the blockchain. Here are just some of them: 1. Logistics From a logistics point of view, blockchain could have a lot of impact for retailers as a shipment could be tracked at every stage, creating a record of exactly who handled it, where and when. If you want to know if your shipment arrived on time you can check location in real-time. It can also record information like temperature at each point so retailers can be sure products are being handled safely. This could help reduce the number of lost or damaged products in shipments, which may result in significant cost savings. In the case of product recalls having an accurate supply chain record could help retailers identify the source of the issue, what prod- ucts are affected and contain the problem. WAVE is one company tackling the supply chain challenge through blockchain. All members of the supply chain are connected through a decentralised database enabling them to directly exchange documents. This also helps manage and resolve disputes as the blockchain offers irrefutable evidence of what has happened at each point in the chain. 2. Transparency The transparency of the information stored in the blockchain means every part of the retail chain, from supplier to retailer to customer, can see where products come from. For consumers it offers the possibility to know more about the provenance of the things they're buying. Increasingly shoppers' decisions are driven by environmental or humanity concerns – the blockchain could allow them to see if their clothes are made through child labour or if there are danger- ous or hidden components. Provenance is one company using the blockchain to build consumer trust, by tracking all supply chain data for a product and enabling customers to search it in real- time. It can help customers see where their food was grown and if it's local or not. They could even check what the individual in- gredients are and the supply chain of those ingredients in turn. If a customer wants to avoid imported products or goods that are out-of-season the blockchain can put that information at their fingertips. 3. Authenticity and anti-counterfeiting Blockchain can be used to confirm the au- thenticity of products by enabling custom- ers to look back through the records for an item. This is particularly useful in the case of luxury goods where counterfeiting is a big problem. Being able to track a product back to its source gives customers the confidence to part with large sums of money as they know it's the real deal. Block Verify is a blockchain based anti- counterfeiting solution for luxury retail and diamonds, electronics and pharmaceuticals. Goods are tagged and verified at the point of manufacture and then certified on the blockchain. When customers buy a product they can check the authenticity and then be registered as the official owner. The same system can be used to notify customers should their product be stolen and then attempted to be resold. This new transaction would also appear on the block- chain enabling the real owner to trace the product. Using blockchain in this way could help deter counterfeiters, as well as those How blockchain is chan