What is blockchain?
In short, blockchain relies on cryptographic techniques that allow each stakeholder to store, exchange, and view information, or blocks, within a shared distributed network. This is an extension of the peer-to-peer transaction model we’ve already seen, but blockchain has no centralized authority. Within this world, participants are made aware of all interactions, which are recorded on a digital ledger, making it easy to audit at any time. The blocks, once recorded, can no longer be manipulated unless the majority of users reach a consensus that the changes are valid.
This makes the technology very appealing for reconciling records among different stakeholders. Blockchain distributes identical copies of the information to multiple parties so there is no longer a need for third-party intermediaries. The data can be accessed in real-time, ensuring transparency and security, not inefficiencies and the potential for errors.
Why is blockchain secure?
Blockchain represents the most secure system to fight breaches because of its innate ability to trace the data supply chain. The technology requires data verification and the ledger creates a record of previous time-stamped entries to make sure every new action has integrity with what came before. That means that supply partners can approve or deny any sharing or changes to their data and all participants in the data will know when data is verified — or not.
The end result is trust. All involved stakeholders will know with authority that what they’re seeing on the screen is accurate, despite it passing through many hands from many locations.
How can it help agribusiness?
Blockchain technology allows operators from all sides of agribusiness make transactions more securely and with greater transparency. This means food products are tracked every time they move to the next phase, creating a permanent record of its history. The upside are reduced time delays and human error. Here are some key benefits for farmers:
- Traceability features will support specialty food differentiation.
- Supply chain transparency will lead to cost reduction, as it could help improve the management of disease outbreak or food contamination at the farm level.
- Blockchain strengthens billing management, which will result in cost savings. Streamlining data into a transactional ledger reduces manual administrative costs because it eliminates the need for third-party intermediaries. Blockchain could speed up payments and therefore reduce uncertainty.
- The creation of a transparent land registry via blockchain would greatly improve financing and, in turn, investment and yields.
- Through real-time tracking of production conditions, and the reduced time in the supply chain, blockchain would help reduce waste.
Blockchain still remains in the exploratory phase for agribusiness as it will require full adoption from supply chain operators, from farmers to grocery stores, in order to implement its tracking and transparency features. There is also the question of whether or not the technology is scalable and at what cost, which will surely be issues for small farming operations located in remote regions.
Do you use blockchain in any aspect of your operation? Does it improve efficiency? Or if you don’t use blockchain, do you have any fears about its reliability and effectiveness? Let us know in the comments below!