Do you want to get your products faster, cheaper, and without worry of counterfeits? Who doesn’t? Well, blockchain may be the answer.
Globalization is the worldwide interaction of business and customers, companies, and governments. It’s the freedom of a company to be global, like Apple designing their new iPhone in Seattle, manufacturing it in Shenzhen, China, shipping it to Berlin, Germany, and selling it in London, England.
As you can imagine, a great many steps are needed to ensure this process runs smoothly, effectively, and efficiently. And the process does run well. We can buy products from all over the world in every developed country. So … do global businesses really need blockchain then? Can blockchain improve globalization at all?
Let’s dive in and find out.
Improving globalization through money transfer speeds.
All these global goods and services need to be paid for as they move around the world—that’s given. But the movement of money encounters friction along the way. Conversion between currencies, bank transfer fees and times, inflation, and interest payments.
Now, yes, many people have complained about the network congestion and fees on the Bitcoin network—especially during peak use. But that’s changing—it’s improving, fast.
A fascinating article on Why Blockchain is Important tells us that: “Facebook, Telegram, and Signal are planning to roll out new cryptocurrencies over the next year. The most anticipated but secretive project is underway at Facebook. The company is working on a coin that users of WhatsApp, which Facebook owns, could send to friends and family instantly and anywhere in the world using blockchain technology.”
That project is Libra. And it will reportedly rival the speed and settlement power of the best payment options out there today.
It’s no wonder that global Fortune 500 companies are actively working on integrating blockchain into their globalization efforts.
Improving globalization by eliminating counterfeits.
Part of the problem in globalization is the risk of counterfeit goods. Big brands such as Gucci, Louis Vuitton, and Nike must battle knockoffs of every quality level. Cheap fakes may be easy to spot, but quality fakes can still be made in foreign lands for cheaper than Nike’s own manufacturers.
Nike has armed itself with blockchain tech to battle fakes. In 2019 they filed a patent—which was granted—for physical shoes registered on the blockchain. The patent explains itself:
“When a consumer buys a genuine pair of shoes a digital representation of a show may be generated, linked with the consumer, and assigned a cryptographic token, where the digital shoe and cryptographic token collectively represent a ‘CryptoKick,’” the patent reads.
“When sneakers are sold to someone else, ownership can be transferred by trading both the real shoe and/or associated digital assets. These digital assets can be stored in what’s being called a ‘Digital Locker,’ a cryptocurrency wallet type app.”
Quite the clever use of blockchain, isn’t it? And it’s only one of dozens examples as companies both local and global begin integrating blockchain into their globalization efforts.
Improving globalization by cutting middlemen.
An article in the Wall Street Journal suggests that blockchain will help bring efficiency and cost savings to globalization by cutting out intermediaries and middlemen. It says:
“By running business software on top of the blockchain, companies will be able to automate transactions and enable new business models without designing or building a separate system for them.”
This is possible thanks to smart contracts. A business agreement, shipping agreement, or other types of contracts which require verification by 3rd parties—could be eliminated. Instead, a smart contract programmed to monitor the conditions of a shipment would be triggered by certain events. The triggers would then satisfy payments or further conditions.
This type of efficiency is what globalization needs.
In the end we can easily see that blockchain does in fact improve globalization. The only question now is: how soon can consumers see the benefits?