Midyear review: Increasing regulation, lessons from Web 2.0 and changing attitudes towards DLT
By Dominic von Trotha Taylor, Chief Executive Officer, iov42
As we move into the second half of 2023, we are already seeing the direction in which emerging technology like Distributed Ledger Technology (DLT) is heading. But have we realised its full capabilities yet?
At iov42, we are in a unique position to work with organizations across the globe and in multiple industries where DLT can help solve some of the world’s biggest challenges. As a result, we are at the crossroads of changing attitudes towards DLT and can see firsthand how this technology is shaping businesses, governments, and societies as we know it.
Transparency, trust, and authenticity are essential values for companies to embed into their business, especially as boundaries between digital and physical spaces continue to become more fluid. In order for this to function, we also need to consider a way for a more ethical and secure future – which DLT is perfectly placed to do. Let us explain.
Increasing regulations will prompt positive sustainability outcomes in supply chains and business outcomes in 2023
As we entered 2023, there was a clear focus on existing and incoming regulations. One example was The European Deforestation Regulation (EUDR), a provisional deal to cut down worldwide deforestation by implementing mandatory due diligence requirements for a number of commodities including timber, cotton, soy, and beef, to name a few. The legislation will require importers in Europe to provide improved due diligence and trace products beyond their immediate supplier and back to the forest floor.
There has also been lots of hype around the UK’s Electronic Trade Documents Bill, planned for launch later this year. The legislation is set to change industries’ approach to sustainable supply chain processes by making digital documentation legally recognized. Electronic bills of lading could save as much as £5.17 billion in direct costs and facilitate £32 billion in global trade – and the benefits go beyond the paper itself. It is expected to not only cut carbon emissions by 10% but also enable businesses to digitize their ways of working and create systems that allow better tracking throughout the entire global supply chain.
As businesses, governments and citizens demand that organizations shift their processes for a ‘greener economy’ we will see a continued influx of new or updated bills and regulations to help guide us into a more sustainable future. This is where technology like DLT can really come into play. It enables organizations to work collaboratively to meet due diligence requirements, as well as improve traceability across complex supply chains and build stronger bonds of trust.
Businesses need to embrace DLT’s insurgence: as education and applications continue to grow
People’s understanding of what DLT and blockchain are truly capable of is also evolving. Once the poster child for digital currencies, this technology is having a rebirth as more businesses across a range of industries begin to understand the benefits and capabilities of DLT beyond crypto.
It is also hugely beneficial for industries where current processes are causing huge financial losses. For example, in just one month of 2022, 28 countries had reported losing more than €17 million worth of materials, including steel, due to stolen freights, meaning that a large portion of the CO2 emissions created would have been released for nothing.
DLT provides enhanced trust and traceability through the application of electronic proof-of-delivery (ePOD). The integration of ePOD means steel manufacturers can significantly reduce the risk of losing materials by digitizing the point of delivery. This in turn, also helps to move the steel industry towards a more sustainable future, by cutting down on printing and paper usage.
We are going to continue to see more and more industries realizing how DLT can be utilized to improve their business across a number of areas. This is just the beginning.
We need to ensure we don’t make the mistakes with Web3 we did with Web2
We’re still at the ‘sliding doors’ moment with Web 3.0, to counteract the damage and breakdown in stability that the inherent centralization of Web 2.0 evoked. Irreversible damage has been done to the trust we have in the information we receive from governments, media, and organizations. This faith in many of our institutions has eroded – and centralization has played a huge role in that.
We have an opportunity to make a real difference in society. Whether that’s in finance, gaming or timber industries – we should be building a system of incentives that reward good behavior and use human nature to connect the digital to the physical, as opposed to overlooking behavioral economics. With DLT, businesses can unlock new ways of using information and wielding the power of tech for bettering the world.
There have been reasons to grow more cynical about the power of technology in recent years, but seeing the role technology can bring to help towards achieving net zero and improve digital trust globally has brought ample reasons to be optimistic.