Blockchain in the kitchen – use cases for an emerging technology

Blockchain's capability of tracking ownership records and tamper- resistance can be used to solve urgent issues such as food fraud, safety recalls, supply chain inefficiency and food traceability in the current food system. In this article, we are going to take a closer look to address these concerns and how blockchain could make a positive impact on the food ecosystem.

Blockchain Applications

Food traceability

Food traceability has been at the center of recent food safety discussions, particularly with new advancements in blockchain applications. Due to the nature of perishable food, the food industry at whole is extremely vulnerable to making mistakes that would ultimately affect human lives. When foodborne diseases threaten public health, the first step to root-cause analysis is to track down the source of contamination and there is no tolerance for uncertainty.

Consequently, traceability is critical for the food supply chain. The current communication framework within the food ecosystem makes traceability a time-consuming task since some involved parties are still tracking information on paper. The structure of blockchain ensures that each player along the food value chain would generate and securely share data points to create an accountable and traceable system. Vast data points with labels that clarify ownership can be recorded promptly without any alteration. As a result, the record of a food item’s journey, from farm to table, is available to monitor in realtime.

Balancing market access

The use cases of blockchain in food go beyond ensuring food safety. It also adds value to the current market by establishing a ledger in the network and balancing market pricing. The traditional price mechanism for buying and selling relies on judgments of the involved players, rather than the information provided by the entire value chain. Giving access to data would create a holistic picture of the supply and demand.

The blockchain application for trades might revolutionize traditional commodity trading and hedging as well. Blockchain enables verified transactions to be securely shared with every player in the food supply chain, creating a marketplace with immense transparency.

Despite many promising perspectives of the blockchain for food, several concerns and doubts still remain, making it hard to implement the technology in the food supply chain.

Blockchain Challenges

System Complexities

The first challenge for entrepreneurs entering the space starts with the question of how to overcome the complexity of the food ecosystem. For a typical agricultural production site, implementing blockchain technology requires a customized system and streamlined practices for data entry. Agricultural products have various forms, storage methods, handling processes, and a variety of data recording methods.

We often see challenges in adapting to the food system caused
by multiple platforms and non-synchronized terminologies. The food ecosystem involves many players (i.e., distributors, buyers, wholesalers) and many layers of structures such as terminal markets, distribution networks, and trading platforms. Implementing blockchain in scale requires a great effort of customization at the granular level - from farm operations to working around the existing ERP system and modifying the data collection process.

Data Transparency

Advocates against blockchain for food also raise concerns about data transparency. On one hand, the disclosure of data would provide accountability for trading transactions and farming practices, which supports claims like organic, freshness, and superior quality. On the other hand, detailed information might get scrutinized and cause a backlash against businesses if things go wrong. It's difficult to request voluntary disclosure of information, primarily when the critical data might affect businesses. In the case of agricultural production, if a pesticide is used during production for combating plant disease, consumers might diminish the value of a product or reject it entirely. Farmers might be reluctant to participate in blockchain implementation if their rivals are creating a competitive edge by hiding specific products or processing information.

Another concern is the capacity issue of blockchain being able to handle large quantities of data, particularly trading data. The blockchain application in trades, where more significant economic impacts might happen, has been paid the least amount of attention so far. First, we are seeing interests of deploying blockchain mainly from large organizations because they have the infrastructure - both technical systems and data already in place - to support the automation of processing data at a farm level. In addition, as one of the constraints of the blockchain, the structure and scales have to be carefully planned out as each transaction added to the blockchain would increase the size of the database. Either a smaller ledger (not every node can carry a full copy of the blockchain) or a more centralized control should be built in the network. As a result, large pilots are demanded by corporations to test the limits of blockchain before it even establishes.

Solutions

Over the past few years, we have seen blockchain technology evolve and become readily available to transform different industries, especially for food sectors. The space of blockchain is crowded with innovators. Bext360 utilizes a combination of IoT, blockchain, machine learning, and artificial intelligence to build a fully-transparent food supply chain. They provide the SaaS platform to growers and different players along the value chain for sharing data and tracking progress.

Der Autor

Für den Norden Deutschlands ist ein Mann im Silicon Valley unterwegs: Tim Ole Jöhnk. Der Direktor des NGIO kennt die großen und kleinen, die Shootingstars und Branchenprimi – und weiß, was sie wollen. Mit dem „Northern Germany Innovation Office“ (NGIO) in San Francisco ist eine Brücke für innovative Unternehmen zwischen Norddeutschland und dem Silicon Valley entstanden. Norddeutschen Unternehmen soll auf diese Weise Einblick in interessante Technologien und Lösungen, ein Zugang zu Netzwerken rund um das Silicon Valley und zu potentiellen Kooperationspartnern vermittelt werden.

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