Our Analysts' Insights

Blockchain is a method for concatenating blocks of transactions, which are stored securely using encryption in a distributed system that prevents bad actors from unlawfully changing records. Most media reports focus on blockchain’s use in cryptocurrencies such as Bitcoin, where it originated. However, the language industry will be more directly affected by the advent of smart contracts, where blockchain methods allow applications to automatically negotiate and enforce transactions; for example, in supply chain interactions.

While international payments are perhaps an interesting problem to solve using crypto-currency, that is likely to happen outside the production environments used by language suppliers. Smart contracts will be addressed directly in both proprietary and commercial translation management systems (TMSes). Using current technology, companies seeking to prevent information leakage during the translation process may force vendors to work only in a protected online environment that locks down content and memory stores. This constraint on vendor process inevitably raises the cost by reducing flexibility of who can perform the work and in what system.

A permissioned blockchain, which only allows known participants, provides a better solution:

• Supply chain authorizations are baked into the smart contract. For supply chain transitions or handoffs, the package itself defines what can happen when opened by an invited vendor. The application used to open the content would first have to meet the requirements of the contract. During the machine-to-machine negotiation, the supplier’s app would prove its bona fides; for example, by dis-allowing export or conversion. Upon successful negotiation, the receiving application gains any rights allowed in the contract, such as to read, modify, or spawn a variant for language translation. Thus, language vendors can use any tool of their choice, if it can read and append blocks and meet the terms of the contract.
   
• Authoring, translation, and QA systems show their credentials. The contract would also control and vet deliveries, rejecting the new block if the terms of the contract were not followed. If the content and metadata match the contract logic, that transaction completes and a new block is appended to the chain. In a multi-layer supply chain, the next permissioned workflow participant can now access the job. If permissions allow spawning, such as a translation, the chain is updated to reflect the existence of a new parent-child variant.
   
• Smart supply chain transitions protect everybody. Once a supply chain enables secure-ledger transactions, accounts payable and receivable also gain additional control, automation, tracking, and transparency – again, without limiting tool use on the accounting side. Right now, systems integration is required to achieve this level of control. That won’t be such a big issue once content processing and finance applications incorporate blockchain negotiation capabilities. Contract events in the blockchain can trigger payments as stipulated in the contract, whether instantaneous or on a net terms basis.
   

Most applications for blockchain are still over the edge of the horizon, but this much is already clear: Blockchain has the potential to alter the landscape of every industry, by changing how assets are tracked, how contract agreements are defined and enforced, and how payments are made. It’s hard to predict whether the language industry’s tools, processes, and business practices will migrate to blockchain in a three-year or a 10-year period. Given the potential of the technology, CSA Research asserts that every company should explore how to adopt blockchain’s secure, distributed ledgers and smart contracts in their technology stacks and operational models.

*This post has been updated to remove reference to Langpie, which, after the initial publication, was accused of running a scam to obtain Ethereum crypto-currency rather than establishing a viable business. The company’s website and social media profiles have disappeared, despite an initially plausible vision. Although this story shows the risks of investing in any unproven startup, it does not change the value that blockchain technology offers the language industry or the prospects for future blockchain implementations in the industry. For more on the topic, please see this article at BlockExplorer.com.