HOW BLOCKCHAIN IS ESSENTIAL TO MY DISTILLERY Bryce Young of Bryce Distillery manufactures absinthe in the US state of Montana and is its first registered crypto-currency merchant. In an excerpt from his blog, Young explains how blockchain works and why it’s critical to start considering it now. To convey the meaning of data as a raw material, I’ll give an example of how blockchain technology might work in a distillery and the alcohol industry. At Bryce Distillery, we are developing these technologies and smart contracts to become a first-mover into a world that combines alcohol and cryptography. If you own a distillery, you are interested in key pieces of information about your business, including (let’s say) revenue. Think of this revenue data as raw material that you would like to ‘mine’. To do this, you create a ‘token’ that can be spent at your distillery as currency. You make it so this token has codes written into it that track the revenue information that you want. For instance, you can incorporate an algorithm into this token that tracks where and for what each token was used, and that information is forever kept in an encrypted code that only you can view. Now you have a tracking system for product and sales that will save you endless hours on quickbooks and applications with the TTB and Department of Revenue. You can then add more complex functions into the token that can include the ability to do your taxes for you once a month, to keep track of inventory, and even to automatically execute contracts and agreements with suppliers, distributors and retailers. The tokens have the ability to execute all these functions for any business in the alcohol industry - from the producer to the end consumer 16 FEBRUARY 2018 who can spend this token at the distillery or, in the future, their local or online liquor store for the product they want. Sound a little like artificial intelligence (AI)? That’s because it is. The technology to make a single machine to process all this data would cost millions, and that’s where the brilliance of blockchain technology comes in. Blockchain uses the computing power of every device connected to it in order to process and store this information, making use of the interconnected consciousness that has come from our increasing involvement in and use of the internet. Still unclear? Let me give another example in how blockchain could be used to unite land developers and conservation advocates. Imagine a website that is a trading platform for ownership of forest throughout the world. Let’s say they are using a token called TreeCoin, and you can use TreeCoin to buy a portion of forest anywhere in the world. There will be a few types of people interested in buying TreeCoin. First will be the timber industries who will need to own and then spend a certain amount of TreeCoin in order to cut down a portion of the Amazon. The second interested party will be the environmentalists and conservationists who, by owning TreeCoin, can protect forests and hold power and sway in the timber industry while watching the value of their tokens appreciate as more trees get cut down and TreeCoin becomes more scarce. TreeCoin in this sense could be used to track usage of lumber: where it is happening, what types of trees, what is the market price and so on, which would greatly improve efficiencies in the industry, helping us work toward a sustainable future…and therein lies the value of TreeCoin in a decentralised network that connects all parties dealing in forestry. The TreeCoin would be created by planting more trees in place of the clear cut that just happened to harvest lumber. More trees = more TreeCoin. Less trees = less TreeCoin with higher value which results in higher cost to continue removing trees. The logic of platforms with higher connectivity and stores of information, as illustrated above, is the logic driving the adoption of blockchain technology by all industries. Whether you are a distiller, an environmentalist or something completely different, you are standing in an empty prairie that will soon be developed into a bustling metropolis, so there’s no better time to apply blockchain logic to your business in whatever way you can to get that first-mover advantage. We’re all in this together, figuring it out as we go. The best thing we can do is start with something small. I am Montana’s first registered cryptocurrency merchant (you can buy tee shirts and gift cards on my website with Bitcoin, Ethereum or Litecoin) and that’s a small step in the larger plan, but we have to start somewhere. MY SAY
FT-eMag-feb18
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