A food chain that is ready for blockchain integration is one where data, preferably generated by machines, pertaining to food products and processes can be incorporated and enhanced by blockchain technology (BCT). A food chain empowered by blockchain ensures a heightened level of transparency, traceability, trust, and a reduced risk of fraud. It safeguards the authenticity of information regarding food quality and origin.
An Information System with Resilience: No ‘single point of failure’ Blockchain technology (BCT) underpins a resilient information system that eliminates the risk of a ‘single point of failure’ due to its decentralized nature, ensuring information integrity. The key features of BCT include:
- Distributed ledger technology: An encrypted record of transactions stored on multiple participating nodes (computers or servers) rather than a central ledger.
- Record Immutability: Records in a blockchain remain tamper-proof, maintaining sync through peer-to-peer mechanisms and predefined rules for adding new records (blocks).
- Peer-to-peer exchanges: Eliminating intermediaries in transactions reduces the potential for fraud and associated transaction costs.
- Transparency with pseudonymity: All transactions are visible while ensuring the privacy of the participants.
- Computational logic: Implementation of automated transactions known as ‘smart contracts’ contributes to transaction transparency and fairness.
Growing Interest and Challenges Blockchain technology has gained attention from major players in the food chain, with many exploring its applications for various purposes. Current use cases focus on the provenance and traceability of food products throughout the supply chain. However, challenges in developing a blockchain-ready food chain include:
- The ‘first mile’ problem: Digitizing physical goods and assets and representing them in blockchain-based information systems.
- The ‘capacity and performance’ problem: Determining the feasibility of storing information in distributed databases and understanding the limitations on the amount of data that can be stored in a blockchain.
- The business model and governance challenge: Implementing a new information system will alter existing business processes, leading to different advantages or disadvantages for both existing and new players in the ecosystem.
Organizing the Trust Ecosystem Applying BCT to the food chain is not solely about the technology itself, although it must function effectively. It primarily involves the organization of information flows among different stakeholders and the establishment of diverse methods for organizing trust and trust relations within the chain.