This document discusses how blockchain technology can provide value by reducing fraud and inefficiencies. It estimates that fraud costs companies over $3.8 trillion annually, with counterfeiting bringing in $600 billion and supply chain fraud accounting for over $700 billion of total fraud. Blockchain could enable transparency and automation through techniques like smart contracts and digital asset tracking to help reduce fraud in industries like supply chain, healthcare, and financial services. Even a 10% reduction in annual fraud would position blockchain as a multi-trillion dollar industry.

1. Blockchain*–*Proof*of*Value*
!
It’s!a!widespread!process!improvement,!a!specialized!solution,!
and!a!business!catalyst.!
!
Direct!Value!(Savings!to!Companies):!
•! Smart!Contracts!save!companies!money!through!
efficiencies!and!automation.!
•! Blockchain!core!technology!reduces!friction!across!
business!processes!to!enable!seamless!functionality,!faster!
speeds,!and!increased!quality!control.!
!
Indirect!Value!(Solutions!derived!for!previously!existing!issues,!
but!have!no!direct!correlation!to!monetary!gain):!
•! IoT!–!Registering,!tracking,!and!securing!a!projected!100!
billion!connected!devices!by!the!year!2025!as!well!as!a!
step!in!the!right!direction!with!regards!to!managing!this!
vast!amount!of!incoming!data.!
!
Industry!Penetration:!
•! It!chisels!away!at!the!Counterfeit,!Fraud,!and!other!related!
industries!that!cost!companies!over!$3.8!trillion!annually.!
!
Value*Lost*through*Fraud*
*
The!counterfeit!market!brings!in!$600!billion!annually,!
according!to!the!World!Trademark!Review!and!on!top!of!that!
Fraud!costs!companies!$3.7!trillion!each!year!and!the!vast!
majority!of!those!deceptions!are!detected!purely!by!luck!–!only!

2. 3%!of!frauds!are!found!by!auditors!according!to!K2!Intelligence.!!
That!is!not!including!the!amount!of!money!companies!actively!
spend!on!fraud!prevention!measures.!
!
Everyone!is!a!loser!in!the!case!of!fraud!from!companies!(losing!
money),!consumers!(increased!cost!of!goods!to!offset!incurred!
losses),!and!governments!(smaller!budget!due!to!less!taxable!
events).!
!
!
!
!
If!the!Blockchain!can!achieve!1%!savings!in!just!the!counterfeit!
industry!that!would!be!$6b!annually,!10%!$60b!annually,!and!to!
be!aggressive!cut!it!in!half!would!equate!over!$300b!annually.!!

3. Factor! in! savings! from! fraud! reduction! and! that! effectively!
projects!Blockchain!as!an!emerging!multiZtrillion!dollar!industry.!
!
The!technology!is!there!to!reasonably!surpass!a!10%!reduction!
in!annual!fraud;!however,!that!figure!will!be!heavily!driven!by!
enterprise!adoption!rates!of!Blockchain!technology.!
!
Industry*Specific*
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Supply!Chain:!
!
Of!the!$3.7!trillion!in!estimated!annual!fraud,!the!supply!chain!
industry!makes!up!over!$700b!of!that.!
!
Fraud!in!the!supply!chain!can!be!particularly!hard!to!spot!
because!no!business!of!any!size!can!keep!watch!over!every!
invoice,!every!order,!and!every!consignment!leaving!a!
warehouse.!The!risk!has!grown!as!companies!increasingly!do!
business!in!parts!of!the!world!where!bribes!and!kickbacks!are!
commonplace.!
!
Recessions!also!increase!the!likelihood!of!fraud!taking!place,!
and!with!the!typical!deception!taking!between!18!months!and!
two!years!to!come!to!light,!now!is!the!time!when!many!more!
companies!are!likely!to!find!they!are!not!selling!what!they!think!
they!are!selling.!
Supply!chain!fraud!affects!businesses!in!every!industry!and!at!
every!stage,!from!raw!materials!through!to!rigged!supply!
contracts.!

4. !
Project!managers!and!invoice!approvers!account!for!26%!of!
supply!chain!Fraud!according!to!a!CFO.com!survey!of!2,600!
professionals!
!
•! AntiZfraud!through!transparency!–!By!utilizing!blockchain!
technology!to!hash!(aka!automatically!tag)!digitalized!
assets,!companies!will!be!enabled!to!take!a!realZtime!view!
paired!with!asset!tracking!to!uncover!new!leakages!as!well!
as!more!quickly!identify!leakages!and!react!faster!to!
resolve!those!issues!which!creates!a!more!productive!
ecosystem!that!generates!increased!profits.!
!
•! Automation!(Purchase!Order!example)!through!smart!
contracts!–!In!many!business!processes!there!are!too!many!
hands!(results!in!increased!human!error)!and!too!many!
systems!(inefficiency!leads!to!lower!production!and!
decreased!profits).!
!
An!example!of!this!would!be!the!purchasing!process!of!a!
larger!company.!!When!an!invoice!is!generated!it!typically!
follows!similar!steps!to!get!to!an!order!being!placed.!
!
Pre)!Purchase!Order!Generated!&!Sent!from!buyer!to!
company!
!
Step!1)!Purchase!Order!received!electronically!or!
physically!(via!mail)!

5. Step!2)!Purchase!Order!Verified!&!Approved!(sometimes!
multiple!employees!are!involved!here!or!a!single!purchase!
order!approval)!
Step!3)!Purchase!order!sent!to!Accounting!&!Distribution!
Step!4)!Invoice!Generated!&!Payment!account!created!
Step!5)!Purchase!order!matched!to!receipt!of!payment!by!
accounting!
Step!6)!Shipping!&!Tracking!issued!
! !
! Invoice!Process:!
!
Step!1)!Invoice!Received!via!email,!mail,!etc.!
Step!2)!Invoice!Verified!&!Approved!(Sometimes!multiple!
employees!are!involved!here!for!a!single!invoice!approval).!
Step!3)!Invoice!Sent!to!Accounting!&!Purchasing!
Department!
Step!4)!Purchasing!Department!Submits!Payment!
Step!5)!Accounting!Updated!(very!easy!for!chargebacks,!
changes,!etc.!to!be!accurately!communicated!and!
recorded)!
!
Now!you!can!take!all!of!these!steps!(people!are!just!
following!a!strict!set!of!guidelines!anyway)!and!transform!
them!into!automated!processes!by!coding!them!into!a!
smart!contract!that!runs!off!of!Blockchain!Technology.!
!
!
Healthcare:!
•! AntiZfraud!through!visibility!of!operations.!

6. Three!percent,!or!$60!billion,!of!all!health!care!spending!is!lost!
to!fraud.!!!
•! automation!+!consumer!control!in!the!managing!of!
records!–!Easily!hash!any!digital!record!to!provide!a!
timestamped!proof!of!ownership!as!well!as!management!
controls!for!permissioning!access!to!documents.!
!
Financial:!
•! AntiZfraud!through!visibility:!Blockchain!can!be!utilized!to!
increase!transactional!transparency!to!facilitate!AML/KYC!
and!other!compliance!standards.!
!
Solving!the!$190!billion!Annual!Fraud!Problem:!!
!

7. !
•! Settlements!–!Eliminates!the!need!for!many!different!
parties!reviewing!a!transaction!to!ensure!it!meets!
compliance!standards.!!This!results!in!reduced!overhead!
expenditures!for!compliance!and!increased!speeds.!
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