Sometimes I take a little flack for focusing on price and return on investment with blockchain projects. This is a fair critique, but it isn’t that I’m justa money hungry investor with dreams of moons and lambos. I am. Moreso, the focus on price is simple. It’s understandable and relatable for most people entering the blockchain and crypto space. Like my critics say, there is more than price. Blockchain will save lives.
I agree 100% that blockchain projects are more than mere dollars and cents. They will revolutionize industries and things are about to get very weird (in a good way).
We are now at the cusp of a new era. We are in the “pre dot com” era. I’ll give you a quick example.
Remember when people were terrified of inputting credit card numbers because some hacker in a hoody and wearing black sunglasses was going to steal all your money? Remember when the only way to get a quality product was to walk in a store because you could touch and feel it? You surely would never trust an online company. They would just send you a fake and inferior product.
Fast forward to today.
What feels safer? Walking into a random store where you can touch and feel a product, or reviewing countless online reviews from a reputable retailer that allows hassle free returns? Clearly e-commerce and the Amazon dominated marketplace gives you more security.
You might be wondering how this relates to the blockchain.
Blockchain is in the exact same situation just a few decades later. What do we fear? People are going to steal all of our money, or I’ll get scammed by an ICO, or it’s too confusing for me to transfer funds from wallet to wallet. All common complaints in the current phase of development.
This will all change. We are at the ground floor.
Just this week, I read an article about Binance and its tremendous growth in less than a year. It now measures in the same league as Deutsche Bank. Yes, in less than a year, CZ built Binance to the level of a big Wall Street bank. Like I said, things are about to get really weird.
The public decentralized ledger will solve many of our problems. Fraudulent voting in corrupt countries? Solvable. Worried that your donations to non-profits are not being spent correctly? Solvable. Think a politician is not transparent with his donors? Solvable.
But lets get to a solid, every day scenario that could save your life.
Right now product recalls are incredibly costly to manufacturers. Because they cannot track the source of an issue in a direct manner, they have to complete a large scale recall. This is costly.
This high cost can be deadly. If a large scale recall costs millions of dollars, the company might roll the dice. They can easily pay a few wrongful death lawsuits which may be less cost than the product recall. Remember, corporations are not moral vehicles, they exist for profit.
That is where the blockchain can save lives. Rather than fighting on moral grounds, we can speak to them in their own language. Profit.
Let’s say an auto manufacturer has evidence that there is an exploding gas tank that effects 0.001% of vehicles it manufactures. They just don’t know which 0.001% of the vehicles have this problem. They have narrowed it down to one factory, but they can’t get proper timing, so the problem may exist for a 5 year period. Now lets put numbers to it.
The factory produces 500,000 vehicles a year. So the total population of vehicles is 2,500,000. With the defect rate, we know that 250 vehicles will have this defect. That’s 25 explosive vehicles on the road. We can estimate a wrongful death claim at $3,000,000. If these defective vehicles kill one person per incident, the estimated loss is $75,000,000.
With a $75,000,000 baseline, we now examine the recall cost.
Lets estimate $100 per vehicle to conduct the recall. This is a ludicrously low number, but easy for this example. This number is likely far higher once you account for lawyers, engineers, mechanics, administrators, etc. to conduct the recall. Even with this paltry sum, the recall will cost $250,000,000, or almost four times the costs associated with the lawsuits. In this scenario, wouldn’t a profit seeking company roll the dice and risk lives?
This is where the blockchain enters.
With exciting supply chain projects tracking every step of production, we will be able to pinpoint the exact moment a flaw enters the system. Instead of recalling all vehicles for a 5 year period, we can see that the defect only occured on one of the 20 production lines. Moreso, it only occured in three of the five years.
How does this change the math?
Instead of recalling 2,500,000 vehicles, the company now only needs to recall 75,000 vehicles. Instead of costing $250 million, the cost is now a mere $7.5 million. With new data, 25 lives have just been saved because it is now cheaper to conduct a recall than roll the dice in court.
Welcome to the new world. Like I said, things are about to get weird (in a good way).
