Provenance and Blockchain

Author: Hu Yoshida, Chief Technology Office, Hitachi Data Systems

Recently, two Harvard researchers stunned the experts with the discovery of a second parchment copy of the United States Declaration of Independence in the UK’s West Sussex Records Office. They tracked down the manuscript and confirmed its provenance.

Provenance is the history of the ownership and transmission of an object. In the world of art and antiquities, provenance includes the auction houses, dealers, or galleries that have sold an item, the private or institutional collections in which the item has been held, and exhibitions where the item has been displayed. Today, provenance can be extended to anything of value through the implementation of blockchain technology. 

Blockchain technology is the technology behind Bitcoin. A blockchain is a decentralized and distributed digital ledger that records transactions across many computers in such a way that the registered transactions cannot be altered retroactively. Blockchain can provide a secure immutable record of when an object was created, its history of use, and where it is now. Block chain is all about provenance.

While blockchain was originally about crypto currencies and financial transactions, now I am hearing about new applications of this technology in different fields almost on a daily basis, from startups as well as established companies.

For example, Everledger is a London startup that is using blockchain technology as a platform for provenance and combating insurance fraud in the selling and trading of diamonds. Instead of being reliant on paper receipts or certificates that can be easily lost or tampered with, blockchain provides an electronic distributed ledger that is immutable. The chain can also be tracked back to the creation of a particular diamond to certify that it is not a blood diamond, diamonds which are mined in war torn areas and are illegally traded to finance conflict in those areas. Everledger plans to extend this to other luxury items.

Bosch, a 130 year old German company, has created a system that uses an in-car connector to regularly send a vehicle’s mileage to its “digital logbook,” a blockchain based system which stores the mileage in an unalterable way. If the odometer on the car is suspected to have been tampered with, its mileage can be checked against the mileage it has recorded on Bosch’s system, via a smartphone app. A car owner could log their mileage on the blockchain and when they attempt to sell their vehicle, receive a certificate of accuracy from Bosch that confirms the veracity of their car’s mileage. Carfax reports that in Germany, police have estimated that approximately every 3rd car has been subject to odometer fraud causing over € 6 billion in damage per year. In addition to defrauding used car buyers and insurance companies, under reported mileage can result in unexpected failure due to inadequate maintenance. Bosch can prove the provenance of your car mileage.

The provenance of blockchain can provide an immutable record of when something was created, its history, and its current state. Perhaps we can use blockchain to eliminate “fake news.”

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