Bitcoin is the most well-known application of a technology known as "blockchain”. It turns out this novel approach to data management has a host of other -- perhaps more noble -- uses.
What does the Grass Roots Farmers’ Cooperative, a collective of small-scale livestock farmers in Arkansas, have in common with Bitcoin, the infamous digital currency? Rest assured, it has nothing to do with money laundering – more like cleaning up the murky affairs of the meat industry.
The co-op, which we profiled back in our winter issue, is the first food business in the United States to utilize Provenance, a supply chain tracking system powered by blockchain technology, which also happens to power Bitcoin. Provenance has nothing to do with cryptocurrency; it is essentially a digital platform that allows consumers to trace the precise history of a chocolate bar or slab of camembert back to the farm from whence it came.
Founded in 2013, the London-based company, which has financial backing from one of the founders of eBay, now provides its services to over 200 clients in the European Union, ranging from winemakers and fishermen to bespoke clothing manufacturers (they focus on food, but also cater to other artisans).
Currently, the darling of computer geeks the world over, few laypeople have even heard of blockchain technology, much less understand how it works. Most everyone has heard of Bitcoin, however, which is the first block chain-based application deployed on a mass scale. And most of what people have heard is not exactly rosy: it is a favorite of criminals because you can’t trace Bitcoin transactions through any financial institution; in recent months, the value of the cryptocurrency his soared to such astronomical heights that it is now widely considered the biggest financial bubble of all time.
So what is a blockchain, and what does it have to do with wholesome food companies? It turns out that what makes Bitcoin transactions untraceable is very useful for making consumer products more traceable. Confused? So were we. That’s why we called up Jessi Baker, the PhD computer scientist who founded Provenance in 2013.
“A blockchain is essentially a fancy database that is in the commons – no one owns the database, and no one can change the data once it’s been entered,” explains Baker. “For small food companies who want to demonstrate traceability, it’s like having a third-party verification, without having to go through an expensive auditing process.”
A blockchain is the opposite of a centrally-maintained database – one that is owned and controlled by a single entity – like what a financial institution would use to track transactions, or what a large food corporation would use to keep track of its own supply chain. Criminal networks can keep track of payments in private blockchains if they wish. But with Provenance and other public blockchains, the point is to advertise the information they hold for the sake of accountability and transparency.
“Blockchains have a lot of the characteristics of any conventional database, but they add some special powers,” says Baker. “Because they hold data in a way that is immutable, you don’t need to be worried about people changing or duplicating the information – it is literally impossible to do so.”
The information found in a blockchain database is put there directly by the folks who are involved in the “transaction.” In the case of a chicken leg produced by a member of the Grass Roots co-op, the farmer enters the conditions in which the chickens were raised, their location, the number of birds in the “batch,” and the date they were delivered to the processor. The processor then enters the date and time the birds were slaughtered, along with any pertinent information about their own operation. The process continues down the supply chain from processor to distributor to retailer.
Information about third-party certifications, like USDA Organic or Certified Humane, may also be entered into the blockchain. But unlike with these third-party verifications, which are carried out by private inspectors, consumers have easy access to the paper trail – Provenance literally puts it in the palm of your hand.
When you pick up that chicken leg at the grocery store to inspect the label, contemplating whether to buy it, they encounter a QR code on the package; click on it and you’ll find all the information contained in the blockchain related to that particular batch of chicken, compiled in a user-friendly format. You can instantly verify where that chicken came from, rather than having to go home, research the company on the label, and attempt to sleuth out who supplies their chicken, where they were raised, and how the farmer treated them – supply chain information that food companies traditionally keep under wraps.
Rather than divulge detailed sourcing information, many larger food companies attempt to color consumer perception about where their products come from with grandiose marketing claims on their packaging and websites, often alongside charming photos – red barns, blue skies, happy cows munching on lush grass, and the like. Meanwhile, the number of food companies exposed for fraudulent, or at least misleading, claims continues to pile up.
Baker is betting that consumers are increasingly unwilling to trust a few pretty pictures as a source of truth. “Often companies will use the story of this one great smallholder farmer that they source from in their marketing campaigns. Which would be great if they were buying all of their products from similar smallholder farmers, not just a tiny percentage. They’re using that person as leverage to get people to buy the rest of their products, which aren’t all coming from such a great source. The idea of Provenance is to guarantee to the consumer that a company is indeed buying all their products from high-quality sources. It is an attempt to take traceability to the next level.”