One non-financial area in which Blockchain is already taking off is the art market, where it is being used to authenticate ownership, tackle money laundering and even eliminate fakes.
When it comes to art, record-keeping is often poor and what there is can be faked. The market is huge – according to Bloomberg its annual value hit $67 billion (£46.5 billion) in 2014 – and unregulated. As a result, it is seen as an easy way to launder money. After guns and drugs, stolen and faked art is the biggest criminal enterprise in the world. Blockchain could change all that.
Verisart, a Los Angeles-based start-up, wants to use it to build a global ledger of art and collectables that can offer authentication in real time. But why stop there? The luxury goods market is also rife with counterfeiting. Famous fashion luxury brands could use Blockchain to authenticate their products. “It does seem like a logical extension,” Yermack says.
Not only would such authentication make it more difficult for the counterfeiters to sell to unwitting consumers, but it would also guarantee provenance. This is key in the fight against criminals involved in selling blood diamonds and stolen artworks, for example, the proceeds of which often end up in the hands of terrorists and militia.
But Blockchain is not just about authenticating luxury goods – it can also be used to check the authenticity of products for which the maintenance of high standards could be a matter of life and death.
With more medicines sold through non-traditional channels, counterfeiters are better able to infiltrate the system – to the extent that some $200 billion (£138 billion) worth of medicines are estimated to be fakes. But Blockchain allows buyers to check the provenance of a pharmaceutical product and thereby avoid them.
Similarly, cars will be able to make available their complete histories, including accidents, mileage and service, so it is easier to value them and ensure their safety. Insurance companies will be able to check these records against claims to weed out fraud, helping to keep premiums down.
It’s not all good news, however. The rise of Blockchain will doubtless impinge on personal privacy as every detail of our lives is recorded, including education, employment history, criminal and health records and what we buy. “As we realise its full potential there will be more questions about its effects on privacy and trust,” acknowledges Yermack.