Other than stepping out on the town or the killer Insta post you’re going to wear them in, how much are you really thinking about your Gucci loafers? Every piece of dyed fabric, the hand-stitched leather, the pretty packaging and the salespeople involved are often ignored. But then, when we do ignore them, we get upset when our Gucci loafers aren’t absolutely pristine … or even worse … when they are fake. Imagine paying $995 for FAKE Gucci loafers! Made in a sweatshop! Talk about a serious fashion DON’T. All I can say is: Thank goodness blockchain technology came around to fix these crimes of fashion. (Not sure how? Check out this example with Louboutins!)
Why Blockchains Are en Vogue
The classic “supply chain on the blockchain” may be an overwrought use case, but it is truly a life-changing solution. Being able to walk into Saks Fifth Avenue and purchase your Gucci loafers in person gives you the ultimate confidence in the fact that the shoebox being handed to you over the register is authentic and tracked. But wait a minute … this is the digital age, isn’t it?
With the majority of us being online shoppers, what happens when we aren’t having our shoes handed over the counter, but rather having them left outside our door in a big shipping box? How exactly can we be sure our goodies are still “good” —- secure, authentic —- when they aren’t yet in our personal possession and also aren’t being tracked digitally?
When we buy something at a physical store, there really isn’t a moment that the shoes aren’t being either digitally tracked or personally tracked (at that point, by us, the purchasers). As soon as the salesperson checks the shoes out, the computer stops documenting and we start taking ownership. Whatever happens to the shoes from that point until they reach our closet is really on our watch … and not much is likely to happen with that shopping bag on our wrists. When we have things delivered, on the other hand, there is a much larger gap between digital tracking and personal tracking. Welcome to the last mile problem.
Breaking Down the Last Mile Problem
The last mile problem is a century-old issue (OK, not literally “century old” because it’s not like we were online shopping in the 1900s, but it’s seriously hard to imagine a time when we weren’t). Turns out, the last mile problem actually impacts a lot of industries. For example, in the finance industry, the last mile problem would be something along the lines of changing traditional currency into cryptocurrency and vice versa. Or potentially making sure that the quantity of money/assets matches what the records say were exchanged. Once again, our savior, blockchain technology, is here.
Essentially, the last mile problem is the “gap between online records and the actual entities in the offline world.” It’s like the gap when your Amazon package leaves the warehouse and arrives at your front door. It really has nothing to do with technology, just the delivery person driving it to your door and you bringing it inside. This is the same scenario, just with a Gucci delivery!
So here’s the thing: Blockchain technology isn’t necessarily a fix for the last mile problem … but it is a fix for costless verification. Did I lose you? Let’s (quickly!) break it down.
What Is Costless Verification?
Costless verification is … complex ... yet AMAZING! It’s another one of the fabulous benefits of, you guessed it, blockchains. Imagine if you bought your Gucci loafers and, a few weeks later, the fur started completely falling off. That might be a sign that your $995 was not really worth the $995 price tag —- aka FAKES! So then, you have to take your shoes in and try to get them authenticated in order to see if the items you have purchased are, indeed, real. That, however, requires so much time, money, energy and effort from people. The amount of resources it takes to verify something (especially after the fact) is honestly surprising. This is what blockchain technology is good at! With everything stored and tracked on a blockchain, any person can refer to it at any point in time on the distributed ledger at no cost. Therefore, I give you … *drumroll please* … costless verification!
However, the issue is, when one thing becomes cheaper, its complement becomes more expensive. Take an easy example —- hot dogs and buns. If hot dogs become cheap, people will buy more of them. But, with hot dogs, you need buns. So, naturally, the buns will become more expensive. Supply and demand, baby! In this case, “verification” is the hot dog (thank you, blockchains, for making that cheap) and the “last mile” is the buns.
Back to the Last Mile
If we knew everything was verified, it would make us more likely to order —- i.e., if people could be 100 percent positive that their Gucci loafers were real, some may feel more comfortable ordering them and having them delivered. And the more we order … the more last mile problems we are going to have. I get it; it seems like bad news.
The bridge between costless verification and the last mile problem can be very difficult to solve, and is potentially why we haven’t seen blockchain technology in some bigger applications. Tragic friction? Or fantastic business opportunity? Hmm … I see the latter. Hello decentralizing entrepreneurs! Let’s get after it!!!!!