A blockchain-ready food chain is a food chain of which data (ideally machine generated) on food products and processes can be fed into and empowered by the blockchain technology (BCT). A blockchain empowered food chain will have high level of transparency, traceability, trust and lower level of fraud. It ensures the integrity of information regarding food quality and provenance.
A robust information system: no ‘single point of failure’
Blockchain technology (BCT) supports a robust information system that removes the risk of ‘single point of failure’ due to its distributed nature and ensures the integrity of information. The following features characterize the BCT:
- Distributed ledger: an encrypted list of transactions that is stored in multiple participating nodes (computers or servers) rather than on a central ledger.
- Immutability of records: records in a blockchain are kept in sync via peer-to-peer mechanisms and pre-agreed rules about what new records (blocks) can be added. The records and entire history of records are tamper-proof. This contributes to the authenticity and integrity of data.
- Peer-to-peer exchanges: removing intermediaries in exchanges and transactions which can then reduce the chance of fraud and related transaction costs.
- Transparency with pseudonymity: visibility of all transactions while maintaining privacy of the participants.
- Computational logic: automated transactions known as ‘smart contracts’ that can contribute to the transparency and fairness in transactions.
Growing interest and challenges
Blockchain technology is now on the radar of all mayor players in the food chain. Many are interested in applying BCT for various purposes. Currently several use cases have been developed on the provenance and traceability of food products across the supply chain. Most of these pilot blockchains use meta-information of food products rather than detailed measurements. For the development of a blockchain-ready foodchain we therefore see the following challenges:
- The ‘first mile’ problem: how to digitalize physical goods and assets and represent them in blockchain based information systems
- The ‘capacity and performance’ problem: how much information or data can be stored in a blockchain and how feasible it is to store the information in distributed databases.
- The business model and governance challenge: any new information system will change exiting business processes and result in different advantages or disadvantages for existing and new players in the ecosystem.
Organising the trust ecosystem
Applying BCT to food chain is not much about the technology itself. Of course, it needs to work and it is only in the starting phase, but rather about the organization of information flows among different stakeholders, it is about different ways of organizing trust and trust-relations within the chain.
Frontrunner in blockchain for agrifood
At Wageningen University & Research we recognize the potential of blockchain technology as a powerful enabler of transparent and fair food systems. We also recognize the challenges and potential threats the technology may carry for which joint learning and experimentation by stakeholders in the ecosystem are necessary.
As a leading research institute in the agrifood domain, we feel it is our privilege and responsibility to actively lead and participate in this process together with public and private partners. Therefore we lead, initiate and take part in various projects on applying blockchain to agrifood. For more information, please contact our experts.