An easy-to-understand definition of blockchain and Bitcoin
Words: Daniël Geldenhuys | Images: Getty Images
Blockchain and Bitcoin are two words you’ve probably seen thrown around a lot lately, and while you may be aware of them, it’s completely understandable if you’re not really sure of how it works or why it matters. Both blockchain and Bitcoin are quite new to the world and their applications haven’t quite been figured out yet, but the fashion world isn’t one that’s exempt from its impact. Once the blockchain wave hits fashion — in Africa specifically — in its totality, it’ll help to be in know and ahead of the curve. So in the spirit of jumping ahead of the trend, here’s everything you need to know, appropriately simplified.
Ken Seiff speaking at the Business of Fashion VOICES conference.
What is blockchain technology?
It’s been said that, like with the internet, it’s more important to know what blockchain technology can do than how it works. But it’s good to stretch the mind from time to time, so picture blockchain as a spreadsheet containing valuable information. A key aspect of the spreadsheet is that it lives across a network of millions of computers that constantly update. This network is not connected to one central source. It’s near impossible to tamper with information on the spreadsheet because the information is constantly being cross-referenced and verified across the network. The information is also public.
Your unofficial official definition of blockchain comes from Ken Seiff, a venture capitalist who invests in blockchain companies and spoke at the Business of Fashion VOICES conference in November 2018. Blockchain is a secure way of exchanging value on the internet. The most common form of value currently exchanged via blockchain technology is Bitcoin, an internet currency that can be purchased and traded locally with apps like Luno. Think of Bitcoin as ‘internet money’ that can be used to pay for things on a small but growing number of online stores, and can be exchanged for a traditional physical currency.
Iman Amed and Ken Seiff on stage during the Business of Fashion Voices conference
How fashion can use blockchain technology
The slow but certain move towards being able to pay for clothes with bitcoin is just one of the many effects blockchain technology will have on fashion. Seiff notes that the value exchanged through blockchain doesn’t just need to be a digital currency: it can also be data. In relation to fashion, that can be information about how and where a product is made, as well as proof of its authenticity.
In a recent story for VOGUE Business, Meghan McDowell lists the growing number of ways that the international fashion industry is implementing blockchain technology. It begins in the factory at Levi Strauss & Co where a survey about worker wellbeing was conducted on a blockchain platform. The instantaneous nature of the results, combined with the anonymity of the participants resulted in a refreshingly objective calibration of the working environment.
Blockchain can be used to authenticate items, tracking everything from the places they’re manufactured to where they go after they’ve been sold. This will put a serious dent in the counterfeit market. More importantly, as more and more of us begin to question the circumstances under which the clothes we wear are created, blockchain promises to revolutionise the transparency of processes employed to make clothing. It will make the sustainability of a product and the humanity of the conditions in which it was manufactured easy to verify to the public.
You’ve heard the saying: those who know better do better. Chances are that once South Africans learn more about where their clothes actually come from, they’ll be able to make more informed decisions about the brands they support. This should lead to a greater (and much-needed) support for local design, which would create more jobs in our country.
Seiff compares the discovery of blockchain to the discovery of fire. Those who discovered it had no idea at the time that it would be used to weld the steel and fuel the locomotive engines that facilitated the industrial revolution. All they saw was light and the opportunity to create warmth. “We are at the place right now where fire has just been discovered. We can see the warmth. We can see the light. What we cannot see yet are the use cases that will evolve not just over the next 20 years but probably over the next hundreds of years,” he says. The possibilities are endless. Stay tuned.