Mirror, mirror on the wall who's the fairest of them all: The case for public blockchains

According to the Oxford dictionary, blockchain technology is a system in which a record of transactions are maintained across several computers that are linked to a peer-to-peer network , which allows for the easy distribution of digital information. This has many real-world applications, some of the most exciting in the agriculture and food sector. By using blockchain technology to verify the authenticity of biofortified seeds for example, agrifood supply chains create a shared truth of immutable data and increase transparency. Effectively, blockchain enables a ‘product passport,’ meaning that details about the product that are stored on the blockchain are immutable and verifiable.This transparency can make supply chains more resilient in the face of disruptions such, improve supply chain planning and better manage cash-flow. Ultimately, this helps supply chains save costs, reduce risks and improve sustainability.

But not all blockchains are created equal when it comes to transformational power. Businesses seek efficiency but, despite exponential benefits, they shield their eyes from solutions which they perceive as too high a risk to established business models.  Our blockchain startup The New Fork makes a case for public open blockchain solutions in the agrifood sector, and here is why.

Types of blockchain

Let’s first talk tech. What do we mean by blockchain? Broadly speaking, there are two types of blockchains.  Public blockchains are based on a distributed network of actors, using complex protocols and cryptography to secure the registration of a transaction on the distributed ledger. Everybody can join the network. Private blockchains rely on a consortium of stakeholders, amongst which the ledger is distributed, who already trust each other and trust a third party to manage their blockchain. Joining a private network is invite only.

The case for open public blockchains

Because organizations are still uncomfortable with the idea of opening up their networks to allow anyone to join and publicly sharing information, most blockchain solutions in agrifood are private blockchains.  While these systems can be helpful, they are not enabling the full capacity of the blockchain technology.

The main advantages we see in open public blockchain solutions are interoperability, data-integrity and decentralized governance. This could be transformative for the current agrifood system, which is a complex web of multiple supply chains that cross borders, have numerous actors and countless data systems with poor interoperability (exchange of data) between them.

Interoperability

Most agrifood blockchain solutions aim at tracking one product across one supply chain. It’s not hard to imagine a future where complex products like cookies made of sustainable palm oil, free range eggs and local grain, are easily traceable. It would be convenient if the blockchain solutions tracking each ingredient can exchange information.

Another case for interoperability is for companies and agribusiness entrepreneurs who have multiple products. If a farmer grows potatoes and onions, it would be more efficient if they can use the same system for both products. It’s worth noting that open public blockchain solutions have fewer interoperability issues than private blockchains. Standards for data and their enforcement is one example of how governments might play a role in supporting interoperability.  With international standards in the pipeline and blockchain technology expected to grow, governments should not be left behind and could use blockchain to increase their own efficiency.

Data-integrity

The unique selling point of public blockchain technology is that data are immutable.  In private blockchain solutions, this is not necessarily the case. Parties can retroactively change data in the blockchain. This is convenient when there is an error. However, that also means that your data are no longer immutable, and blockchain loses its unique selling point in this case.

Errors on a public blockchain are managed by inserting a note or transaction, identifying and remediating the error. Therefore both the error and the correction will be visible to the whole network, giving more credibility to the data and data-monitoring in the network.

Decentralized governance

In an open public blockchain solution nobody owns the blockchain. The blockchain is governed by a process of rules agreed upon by all parties of the network, acting as a truly democratic system, based on consensus. This concept, strangely, is hard for organizations to wrap their head around. In this instance, technology is outpacing government practices and policy.

Missing out

Rigidity in government does not mean innovation will stop, it just means governments will not be the beneficiaries of the many exciting possibilities technology offers. The same applies to organizations. A lack of understanding of private versus public, and open versus closed blockchains leads some organizations to choose private blockchain solutions, missing out on the rich possibilities a public blockchain solution offers. Public blockchain solutions, generally speaking, have better interoperability, data-integrity and decentralized governance , making them the best suited instrument for collaboration across company and country boundaries. It’s time for organizations to step over the fear of public blockchain. Government has a role to play here because they can foster an environment of innovation and co-creation, supported by the implementation of policies and standards designed to accelerate cooperation.

We hope to crowd-in some of the world’s best minds to participate in a global conversation on food and technology through the “What’s cooking? Rethinking farm and food policy in the digital age” blog series. We invite people with diverse backgrounds and perspectives to join us and share their comments.