By now most everyone has heard the term “blockchain” and likely read something about the electronic currency or cryptocurrency Bitcoin that blockchain technology has enabled. Articles have started appearing online, in newspapers and in agri-food magazines claiming that blockchain technology could solve a multiplicity of problems in the agri-food industry, ranging from accelerating payment for goods and services to streamlining the supply chain, reducing waste and improving food traceability.
What is blockchain technology?
One easy-to-understand definition of blockchain technology comes from Dr. Sylvain Charlebois, dean, Faculty of Management, Dalhousie University, in an article published in the Globe and Mail on Dec. 12, 2017. In “How blockchain could revolutionize the food industry,” Charlebois states “…blockchain technology is a way of storing and sharing information across a network of users in an open virtual space.” This said, it helps to have a basic understanding of how it all works to help one decide if this technology really has potential to improve food traceability and deliver on other claims, now or in the future.
The blockchain can be either an unstructured or structured network of computers (“nodes” in techno-speak) linked together in either an “open/public” network for anyone on the internet to see. Or it can be linked together in a “structured/controlled/private” network accessible only to invited or approved users. Users can be identified either anonymously or openly and each has a “key” or password to access their account. In an open arrangement, communications or transactions can occur between two individuals and/or firms (P2P) in the network without going through a central server in a format that is called “an open ledger” or “distributed ledger.” Every ledger entry is time stamped and encrypted, making it secure. A group of these transactions is called a “block.” In Bitcoin, blocks are added and updated every 10 minutes. The major blockchain technology providers are today’s major software companies – including Microsoft, Oracle and IBM among others – and each provides their own brand of blockchain technology.
Benefits to agri-food
Blockchain technology offers several advantages for the agri-food industry:
Blockchain and cryptocurrency are technologies that are rapidly evolving. Oversight in many cases is limited, although some will argue this point. Proceed with extreme caution when applying blockchain and cryptocurrency technology to your business.