Blockchain and the New Architecture of Trust
Our guest is Kevin Werbach, Professor of Legal Studies and Business Ethics at The Wharton School, University of Pennsylvania, and founder of Supernova Group, a technology consulting and events firm. A longtime thought leader in communications and internet policy, he served on the Obama Administration’s Presidential Transition Team, and later was an expert advisor on broadband issues at both the Federal Communications Commission and the U.S. Department of Commerce.
In his book, The Blockchain and the New Architecture of Trust, he describes the inception of the blockchain on January 3, 2009, which brought forth a revolutionary trust architecture – an ecosystem where users could place their trust in a system, such as a shared ledger, without necessarily trusting its individual components. While Bitcoin remains the most renowned embodiment of the blockchain, numerous other ventures have emerged, and vast sums of money have been invested in similar applications since its launch. Despite its potential, the blockchain has faced criticism, with some asserting that it enables more illicit activities than it offers benefits to society. In his book, Kevin Werbach endeavors to demonstrate how a technology rooted in mutual mistrust can transcend this perception and become a trustworthy entity.
The blockchain operates on open-source software and decentralized principles, allowing inclusivity for all participants. This very openness might seem antagonistic to regulation. However, Werbach argues that the blockchain and the law are mutually interdependent. Attempting to create blockchain systems that disregard legal and governance aspects is a path toward failure, rendering them outlaws in the mainstream economy. Such an outcome, he warns, would squander a wealth of potential. Instead, if we perceive the blockchain as a legal technology that shapes behavior in novel ways, we can unlock its tremendous potential for generating substantial business and social value.
The use of Blockchain by Walmart in their supply chain
“(…) blockchain has this potential far beyond cryptocurrencies and financial speculation and the kind of use cases that most people focus on and are often most prominent today. So Walmart wanted to deal with the problem that often there are situations where there’s some sort of bacteria or pathogen and they get notified that in your supply chain there is a problem. There’s a problem with romaine lettuce and they need to decide what to do. And so Walmart did the exercise and Walmart, of course, is a major, massive global player. It has extremely sophisticated technology, it’s invested billions of dollars in its supply chain, so Walmart is really good at this. And the person who’s head of food safety at Walmart did the experiment who said, let’s say we know that somewhere in our supply chain there’s some bad lettuce. The thing we have to do, if we don’t know where the bad lettuce is coming from, is take all the lettuce off the shelves of every one of our stores all around the world, which is incredibly costly and inefficient.“