Is Blockchain The Solution To Traceability? | Ask The Expert

Could blockchain change the world by single-handedly solving most of the food system's traceability issues?

In my interview with blockchain expert Dr Leonardo De Rossi from Bocconi University, he confirmed what I suspected: that all of the enthusiasm for blockchain in the food system stems from a lack of understanding of this technology.

Blockchain in a nutshell

Traditionally, systems track transactions between buyers and sellers by recording each transaction on things called ‘ledgers’. A neutral, trusted third party - like a company, a bank or government - usually writes the ledger, and everyone agrees to trust their records.

Blockchain takes a different approach. Instead of one trusted ledger, the blockchain is a public ledger that everyone has a copy of and that everyone can add to - but no one can edit. When everyone’s ledger is the same, you know you can trust that it’s correct - but fraudulent transactions can be spotted when one person’s ledger differs from everybody else’s. 

Ultimately blockchain is all about trust - instead of having to trust a company, a bank or even a government, it works on the principle of ‘trust by consensus’. By offering complete transparency, it makes it possible for us to simply trust one another. The digital currency Bitcoin is the best-known application of blockchain technology, but it was suggested that this approach could be applied to any area of society - including the food system.

So, Leonardo - could blockchain technology be useful in the food system?

In the food system, blockchain would allow us to track every step in the supply chain in a ledger similar to Bitcoin’s – from the first point of the food chain (for example, the farm) to the last point (the retail store). But while this may seem like a good idea in theory, in reality it’s actually not very practical.

Why isn’t the food system a practical area to apply blockchain? 

Blockchain works very well with Bitcoin, I am simply trading something digital - which is the same for everyone.

The agri-food supply chain, on the other hand, is physical. This means that I have to translate those physical assets into digital information, so that it can be uploaded to the blockchain. I could do that by using serial numbers, QR codes, RFID, or other labelling methods – all of which would allow consumers to interact with the label and find out the whole story of the food in their hands. 

But the issue is that it’s actually very easy to fake a label. Take a very concrete example: in flea markets, it’s very easy to find fake luxury-branded bags with real labels. It happens because it's a very easy trick to physically cut the label from a genuine bag and attach it to a fake one – untrained eyes will most likely fall for it. The same thing could be done with food. Let’s say I’m tracing the supply chain of a mango, so I create a label that refers to a batch of organic mangoes that come from a certain region – how easy would it be to peel off this label and attach it to a mango that doesn’t have those features? I will never be able to be sure that the fruit hadn’t been counterfeited unless I were a mango expert of some sort. 

So, you mean that bad actors in the food system could still lie to the blockchain?

Precisely. I always go back to Bitcoin, but it’s important to draw comparisons. In Bitcoin, I can’t doubt the data because, as a digital asset, it’s impossible to falsify information in the Bitcoin blockchain. The data at the origin of Bitcoin has to be correct, by definition. 

But the data at the origin of a physical asset doesn’t have to be correct. A producer could claim they are growing their mangoes without pesticides, but that could be false. They could lie about that, and we wouldn’t be able to tell the difference just from the data in the blockchain. The translation from physical to digital assets makes information corruptible. So  when it comes to physical goods using blockchain, there are two points of failure: the truthfulness of the data at the origin (translating information from physical to digital) and the truthfulness of the label (translating information back from digital to physical). 

And the blockchain can’t prevent those kinds of malpractice or mistakes?

No, these two problems are independent of the blockchain. They are crucial problems and must be solved – I don’t know how, but the blockchain cannot solve them on its own. 

Then there’s another question about how to save all that information in a database. The main advantage of saving information in a blockchain would be the certainty that the data doesn’t change over time since the blockchain guarantees that information stays the same – but it doesn’t guarantee the quality of the data.

What if someone accidentally uploaded some incorrect information? Wouldn’t the fact that you can’t change information probably become an issue when applying the blockchain to food chains? 

For sure. In the case of Bitcoin, the fact that information is not editable is fundamental because I can’t be allowed to change my own Bitcoin balance. But in other situations, what do you do if there’s an error? 

There are a few ways to correct the information in a blockchain. You can save another “story” that refers to the old one – which would require logging a useless and inefficient double transaction – or you can rewrite the story. But if I can easily rewrite the story of a product, the blockchain becomes even more useless!

So, are you suggesting that blockchain might be a solution, but not the solution? Or that it’s not usable and we should be looking elsewhere for solutions?

You could use it in our food system. The real question is: does it make sense to use it? After a thorough feasibility study and technological analysis, does it still look like the best solution? To me, the answer is probably not.