Blockchain technology with a global connection concept

In Praise of Blockchain. Mostly.

Marc Simony
April 3, 2018

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Editor’s note: In the first of a pair of blog posts, TraceGains Head of Product Strategy Marc Simony tackles blockchain and what the technology might mean for the food supply chain.

The biggest buzzword in technology today is “blockchain.” Even in the food industry, the term is now circulating with gale-force strength. Last week’s Future Food Tech conference in San Francisco was the perfect example. More than 400 attendees heard over and over how blockchain can solve many needs in food production and marketing, even though blockchain wasn’t the actual focus of the event.

The night before the conference, a blockchain workshop filled a ballroom, as people wanted to learn what the technology is and what it could do for them. However, not all the insights presented were as candid as they could’ve been. Micki Seibel, with Social Capital, told the audience, “Often we don’t know what’s in our food, even if you’re the manufacturer.”

The next day, when I asked representatives from ADM and The Hershey Co. — who weren’t at the blockchain workshop — what they thought of that statement were outraged, saying, “We know exactly what’s in our food!”

Further, the Food Safety Modernization Act (FSMA) mandates that whoever’s responsible for a safety risk needs to know precisely which manufacturer and location an ingredient has originated.

Steve Whalley, CEO of Strategic World Ventures, said that Model 1027 sensors are needed in the field (e.g., agriculture), and their data on a blockchain, to allow for crop optimization, and to assure retailers and consumers where their food has come from. It’s doubtful that the world generates the electricity necessary to compute all those blocks regularly.

When an audience member questioned the scalability of this, Philip Harris burst out and yelled at the person, saying: “I’m sick and tired of that question,” and then tearing into the audience member.

Another audience member asked Co-founder Raja Ramachandran if there are any other distributed ledger technologies out there, or if blockchain was the only one. Ramachandran paused, then ignored the question and moved on to the next audience member. In case you’re curious, yes, there are other platforms out there, with Hashgraph probably receiving the most attention, because it solves the latency and scalability issues of blockchain (although it’s slightly more centralized). Ceptr and IOTA look interesting, too.

The next day, at the end of the IBM Food Trust presentation, Nathan Jin, a systems designer and founder of Ivy Food Tech, asked Brigid McDermott, a blockchain patent holder and vice president of blockchain business development and ecosystem at IBM, how blockchain could protect against erroneous human input. He received a rambling, lengthy reply, which didn’t address the core of his question.

What Is Blockchain? 

Supporters tout blockchain’s many benefits, including brand protection, consumer trust, and transparency. But what is a blockchain, and what are its best uses?

In and of itself, a blockchain doesn’t do anything; it’s not an application that manages processes. A blockchain is a sequenced string of attribute and event data in an unalterable (immutable) format. So, my alarm rings at 6:30 a.m. I hit the snooze button at 6:30:10 a.m. I get up at 6:45 a.m. I brush my teeth at 6:46 a.m., and so on. On a blockchain, all these separate events (“blocks”) are recorded in their proper sequence (“chain”) and cannot be changed later. Specific blockchain platforms allow for “smart contracts,” the automatic execution of events when predetermined milestones are achieved. But this is an additional capability of the originating platform, not an inherent blockchain capability.

When viewing the sequenced data, you’re at looking at the “ledger.” Some ledgers/blockchains are public (anyone can see them), while others are private (only select people have access). The blockchain/ledger is typically copied to many computers, so the data’s integrity is much more challenging to compromise: All distributed blockchains/ledgers would need to be altered simultaneously to revise the data. If only a few ledgers are changed, the system would immediately alert the stakeholders to this nonconformance (if the system is set up to do so; in some cases, the inconsistency hangs, visible, but without notification, which is how miscreants use blockchain for nefarious activities). When properly implemented and fully functional, having an immutable ledger that’s distributed globally makes data on a blockchain so potentially trustworthy.

You can see how blockchain is a fantastic tool for recording any series of events that might require future verification. However, when disparate data sources are involved, the caveat is that all data owners must verify, notification, and information sharing agreements in place for this chain of events to be fully valid.

The Trust Revolution

But what are the best uses for blockchain technology?

Data are currency. We base critical decisions on data, and those issuing the best data, or having the quickest access to data, have a competitive advantage. Therefore, data integrity is critical in claims substantiation.

Blockchain’s biggest revolution is ushering in replacing intermediaries with peer-to-peer connections. Today, intermediaries — i.e., anyone who brokers a relationship from which they receive financial gain — are still necessary because we don’t know the party/buyer on the other end. We don’t know whether we can trust that person/business, so we need a go-between to help us facilitate the transaction. Blockchains will disintermediate the intermediaries because the need for trust is engineered out, and the system becomes “trustless.” Banks will no longer be necessary to engage in high-value transactions with strangers reliably. In fact, because of the elimination of the need for intermediaries, whole industries and their business models will be rewritten (e.g., the entertainment industry). We’ll even be empowered to gain back control over our privacy and online personas.

But that revolution will take time.

You can find the rest of this blog here.