In May, the U.S. Postal Service Office of Inspector General released a report on blockchain technology and its potential benefits. Blockchain technology allows peers to exchange money directly without the need for a traditional financial intermediary. And perhaps, Bitcoin, a digital asset and a peer-to-peer payment system, is the most widely known example of this.
The report was interesting as it demonstrates the USPS exploring technology that will take it into the future. The document further explores alternate uses of blockchain technology beyond just finances. The very core of this technology is its decentralization, transparency and security. This means at its very heart, there are significant opportunities for its implementation.
The obvious use of blockchain technology is in the financial world, where it got its start with Bitcoin. The research done by the OIG suggests the possibility of having a PostalCoin cryptocurrency. Having this monitored and controlled by the Universal Postal Union would make sense, and maybe the International Monetary Fund would become the exchange-rate partner from cryptocurrency to hard cash.
The ability to have national posts and even non-national posts participate in financial transactions would be huge. Here’s how:
- postal money orders could be sent to anyone in the world
- one could send “money” to their friends in other countries instantaneously and securely
- cash-on-delivery (COD) transactions could be accomplished efficiently
- the sender of the items would initiate the transaction and the receiver would accept it
- the postal authority would be notified that the package is good to deliver.
- no payment, no delivery. The carriers could even start this process and become walking retail outlets while never carrying cash.
Your postal “wallet”
The PostalCoin could be used to pay for your Centralized Account Processing System (CAPS) account and even replace it. Set up your “wallet” through your MyUSPS.com account and you’re done. One could make payments or fund the account from anywhere in the world, while getting current status reports quickly. The USPS would not have to rely on its current centralized network and could create and promote a vast decentralized database with data and history that would exist “forever.”
Come to think of it, maybe one would be able to buy their postage online. All those meter machines out there would be nothing more than a wallet. And one could fund their postage meter instantaneously. I wonder what the meter vendors would think. It sure would eliminate the amount of “float” in the industry.
What about the value-added refunds (VAR) the presort industry gets for workshare discounts?
The transactions could be tied directly back to each meter, and the VAR payments would be automatic when the Mail.Dat was submitted and accepted. No more waiting for weeks to get the funds (the “wallets” would just be moving the PostalCoin around).
I wouldn’t mind being the “bank” or PostalCoin exchange service that converts cash to PostalCoin and back. The USPS or UPU would act as the “miners” validating and recording the transactions and taking a very small transaction fee.
International trade, tracking and identity services
From a national post perspective, the PostalCoin in the various country wallets could be used to fund and transact all mail exchanges. Today every postal authority spends tons of time and money balancing those accounts.
If we used blockchain technology, someone could develop an application that automatically provides accounting for the wallets, as each letter is considered a transaction. Payment for the processing and handling of mail items would be traceable throughout the process – from receipt to delivery. Balancing of the accounts would be automatic and validated at receipt into the postal network.
Perhaps every Intelligent Mail Barcode or Intelligent Mail Package Barcode placed on a mail item could now be a piece of data as part of the PostalCoin transaction. Every mail item could be in the cloud. This could be Informed Delivery™ on steroids.
The OIG report also touched on other uses like the “internet of postal things.”
We’ve heard about all the data being collected by sensors on postal vehicles. Blockchain technology would be a great fit for this, as it is decentralized and searchable. The USPS could sell this secured data and make it available to others without having to create its own massive data centers or applications.
I do believe identity services would be a necessary part of the process if PostalCoin were adopted. Blockchain technology is already being used for this. Identity-service capabilities would be great to tie into homeland security or passports.
Just the mere fact that the OIG is looking into blockchain technology gives me hope that innovation is alive and well in the USPS. This is a natural fit from my perspective, as the USPS deals in financial transactions, and personal and physical identities (addresses). The need for huge databases and data centers shouldn’t be a deterrent to implement this new technology.
I wonder if we will see blockchain technology as a topic at the next PostalVision 2020 conference. Now that could be a game changer.