To Verify, or Not To Verify? — Costless Verification Explained
In life, we are constantly verifying. I mean, seriously, the circle of life might as well just be the circle of verification. Whether we are verifying that the tabloid gossip on the Kardashians is true, the feelings we have for a boy are actually love (and not that he just looks good in pictures), that our coffee isn’t decaf, or that Prada bag is not a knockoff -- verification is everywhere… and unfortunately can come at quite the cost.
In order to properly verify, it can take a ton of time, money, and effort from people. It’s honestly kind of surprising the amount of resources it takes to verify something -- especially after the fact. For example, let’s say that the leather on your Prada bag is starting to fade. A $2,000+ bag should NOT be fading a few months in… sign that it’s not real? Maybe so. Therefore, you have to take your bag in and try to get it authenticated in order to see if the item you purchased is actually real. Talk about a hassle for literally everyone involved!
This is what blockchain technology is good at accomplishing. With everything tracked and stored on a blockchain, any person, any where, at any time, can refer to it on the distributed ledger… at no cost -- a.k.a. COSTLESS VERIFICATION!
The fancy definition of costless verification, according to MIT, is “recorded attributes that need to be verified securely on a blockchain can be referred to at any point on the distributed ledger at no cost.” So, literally what I just described in the Prada bag example.
Essentially, blockchain lets us do the verification upfront and keep track of it forever. **snaps for blockchain** And doing things one time is pretty much alwaaaays going to be cheaper than doing it multiple times.
Now, if you know anything about economics (it’s okay if you don’t, micro was not my finest class), then you know that when one thing becomes cheaper, its complement becomes more expensive. Let’s look at the textbook example you probably learned in class -- hamburgers and buns. If hamburgers become cheap, consumers are going to buy more of them. And what do you typically buy along with hamburgers? Ah yes, buns. And so, as might be expected, bun prices are going to rise, making them more expensive. Yes, dust off that supply and demand chart in your head because that is exactly what we are talking about.
In this case, “verification” is the hamburger (shoutout blockchain for making it cheap!), and the “last mile” is the buns.
Haven’t learned about the last mile problem yet? In short, it’s the “gap between online records and actual entities in the offline world.”
Want to know more about the last mile problem and how it relates to costless verification, check out a recent article I wrote, “Blockchains, the Last Mile Problem Explained, and Costless Verification: Getting Your Gucci Loafers From the Warehouse to Your Closet.”
PC Credits to Douglas Chan!
