The main advantages of blockchain are:
- It is decentralized, so no single company can have full control
- It's cryptography-based, rendering it unhackable and always providing full disclosure and accountability.
Blockchain includes smart contracts that can prevent fraud, which are computer protocols that execute terms of a contract and facilitate trade without a third party.
Blockchain can improve transparency and accountability in the food supply chain by storing and tracking every link in the supply chain. Blockchain would make tracking more accurate and can reduce human errors, theft, and fraudulent transactions.
For an organic apple, the blockchain system would create a digital record with a timestamp of the food's journey through the supply chain, holding people and companies more accountable for their actions. It begins with the growers who send a digital transaction outlining where it was grown, how it was grown, and in what environment it was grown it to the apple pickers. While this transaction is between the two parties, it is added to the public ledger that is the blockchain. The apple picker then sends a transaction to the packaging facility containing the number of each type of apples harvested. Next, the packaging facility will send a transaction to the storage facility outlining the number of packages sent. The storage facility will then send a transaction to the transportation company with information on the temperature it was stored in and how long it was stored for. Each individual transaction is stored on the public ledger, where it's verified by other members in the network and then added to a chain in chronological order. The process continues from the transporting company to another packaging facility, then the retailer and finally, the customers.
Companies are beginning to test blockchain for food supply chains. For example, Walmart is teaming up with IBM
to track the movement of their pork in China using blockchain technology. They track how the meat flows from manufacturers to processors to distributors to retailers and then to the consumers. More specifically, they record farm origin details, batch numbers, factory and processing data, expiration dates, storage temperatures, and shipping details. Though still in the testing stages, Walmart representatives stated that things are glowing smoothly
and they have every intention of expanding the use of blockchain to multiple food items in various countries. This is on track to being one of the biggest implementations of this blockchain technology to date.
Complex global supply chains make it hard for food companies to accurately track food origin, processing, and safety. Blockchain technology can document every article's life cycle on a public, digital record, resolving problems of accountability and visibility in the supply chain. Blockchain has the potential to completely transform and optimize all food supply chains, reducing the possibility for error while saving time and money.