Marlboro And L&M Owner To Build Blockchain, Cheaper Cigarettes On The Horizon?

Philip Morris International, the tobacco giant behind cigarette brands like Marlboro and L&M, is delving into the blockchain industry with plans to develop their own public blockchain.

Nitin Manoharan, the global head of architecture and tech innovation at Philip Morris, spoke at the London Blockchain Expo, where he said onstage:

“We want to do public blockchains.”

How Will a Tobacco Company Use Blockchain Technology?

Covering Manoharan’s panel at the London Blockchain Expo was Coindesk, who later reported on Philip Morris’ blockchain plans.

According to Manoharan, the multi-national tobacco company would use public blockchain technology to track tax stamps on cigarette boxes. While this may sound like a mundane idea, he said these little pieces of paper cost around $5.50 per pack, are dealt with manually, and easily counterfeited.

The method they use to track whether cigarette taxes are paid costs the industry and governments $100 million a year. Manoharan estimates that Phillip Morris will save $20 million right off the bat by automating the entire process.

What’s even more interesting is that Manoharan isn’t interested in permissioned or private blockchains, but rather the opportunities public blockchains present for stakeholders in addition to their company’s use case.

Manoharan told Coindesk:

“The aspiration is an industry-wide blockchain that interested stakeholders can come in and subscribe to it and benefit from it. If they see no value they can just leave.”

Explaining more in-depth about their plans for a viable blockchain ecosystem complete with stakeholders running nodes, Manoharan said:

“We want to make sure that the minimum viable ecosystem we put in place is attractive to all the stakeholders who participate in this particular ecosystem. So there needs to be a value proposition, there needs to be a reason for taking part. Because if there’s not sufficient value on the table they will not engage. So the only way to make it sustainable is to ensure stakeholders benefit from this blockchain.”

Will Phillip Morris Build on Top of Ethereum?

When asked how Phillip Morris will build this tobacco tax-tracking blockchain, Manoharan said it is tailoring Ethereum and MultiChain, Coin Science’s build-your-own-blockchain platform for enterprises. He also said they are talking to the Hyperledger consortium.

Regardless of which blockchain development protocol they build upon, Manoharan says for the particular use case mentioned above, they will be using a public blockchain. Explaining how he feels about permissioned and public blockchains he said:

“Permissioned blockchains are fairly simple. The opportunity is small and you can achieve everything that permissioned blockchain does with existing infrastructure and existing tools. The real value is with public blockchains where you can have multiple players coming in and participating in a trustless manner.”

Blockchain technology is slowly penetrating nearly every industry. What industries do you know are utilizing or are planning to utilize blockchain technology? Let us know what you think in the comment section below.