It’s a Matter of Trust: Is Blockchain the Answer?
At some level, all business transactions rely on trust, particularly when entering an unfamiliar market. People and time have been acknowledged as the best ways to build trust, and when that is not enough we have built-in safeguards with banks and insurance through letters of credit and bills of lading, among other things. However, the building of trust in these ways takes a lot of time an effort. An emerging technology, Blockchain, might be able to help remove trust in others from the equation.
There are various ways to facilitate collaboration where there is no sense of generalized trust: frequent interactions, professional platforms for communication, intermediaries who know both cultures. Most of the advice regarding building trust in another market relies on people – spending time getting to know the stakeholder, having a local brand ambassador or employee to represent your interests, presenting yourself with characteristics worth of trust in that culture.
Connecting Through Tech
In a fast-paced global market, it can be difficult to slow down and take the time to build established relationships, particularly if those relationships could change at the whim of a tariff or election. As with many of the efficacy and efficiency problems we face in the business world, we can look to new technologies for the answer. With the internet, an endless world of information can be at our fingertips, allowing a deep dive into the culture and social mores of a country you want to engage. Wechat, WhatsApp, and Zoom can help us stay connected and engaged without an extended trip, and it is easier than ever to work remotely if you do need to travel to establish relationships. New technology is making it easier to connect to people, build trust, and establish trusted transactions and Blockchain may be an important one in global business transactions.
What is Blockchain?
There are a number of explainers as to what Blockchain is and why it works (the interactive one from Goldman Sachs is one of my favorites), but essentially it is a digital ledger that is continuously being reconciled and is stored decentrally. Basically, it is hard to hack and easy to see if it has been hacked because of the hash encoded in each transaction that is built on the previous transaction. The reason why we may be able to trust in Blockchain is that it was built to be trustless – no one person or entity owns or controls it. The removal of the human element may be the thing that allows Blockchain to be the most trustworthy assistant to global business.
Blockchain faces many barriers to acceptance in business. Trust in technology is waning in many countries after repeated data leaks and trust in institutions is even lower where corporate scandals, bankruptcies, and sexual scandals are the news of the everyday. However, it may be that lack of trust in institutions and other people that convince some to try Blockchain. The promise of more efficient transactions is hard to pass by without a try.
Questions still remain about whether Blockchain will live up to the hype and change to the way we do transactions. It may end up being a blessing and a curse, as most technology ends up being. But, maybe it is best that we lean into the transparency provided by the eternal memory of the internet. Transparency is a useful tool for building trust, and perhaps the best thing to put our trust in is something that designed out the fallibility of humans.