CAMBRIDGE, Mass. — Up to eight years can pass before mangoes mature from seeds in the ground to fruit-bearing trees. Once picked, the fruit is shipped off to packing houses, where they are cleaned before being sent off again to their final destination, at home or abroad. The fruit then undergoes another round of cleaning before being packaged and sent off to distribution centers, to grocery stores and finally into customers’ homes.
Yet tracing the path of such fruit from farm to dining table is still challenging, says Frank Yiannas, a vice president in charge of food safety for Walmart. Suppliers are required to record their items’ journeys only by one step in the immediate past or future — from the store to the customer, for example, or from the distribution center to the store.
It can take days to review hundreds of documents to identify the origins of damaged or tainted food, Yiannas said during the Business of Blockchain event at the Massachusetts Institute of Technology in April. That delay can add stress and even create public health issues, he says, as happened when tainted Romaine lettuce earlier this year sickened 149 people across 29 U.S. states with E.coli.
“The food system today is very fragmented and record-keeping is generally on paper,” he says, “and even when it’s digitized it’s done with different systems so it’s almost impossible to have a long view of the food system.”
Such a convoluted process may be about to change, however. Tech giant IBM joined forces with Walmart and several other retailers for a project that places the food processing and delivery system on the blockchain, a new technology promoting full transparency by involving a ledger that allows participants to both add information and gain access to others’ entries. Walmart’s studies show that tracing the origin of a simple package of mangoes — including learning how the fruit has been produced and treated — now only takes seconds, rather than up to a week by the old system.
“As fast as you could think it, you could know it,” Yiannas says.
The food industry is only one of many sectors beyond finance that blockchain holds promise to bring change. According to CB Insights, a New York-based private market intelligence firm, more than 30 other industries around the world may face disruption by a technology primarily associated with digital currencies and adventurous startups.
The way people learn and teach, communicate with one another and take ownership of their online privacy all may face dramatic change, analysts say. Such change already is being witnessed in many countries:
— In the United Arab Emirates, the government plans to roll out several initiatives this year tied to the technology that will improve transportation, education, energy and health care.
— In Switzerland, an area dubbed “Crypto Valley” has been developed to encourage blockchain-tied startups that are bringing foreign investment into the country.
— Estonia has already digitized most of its public services and interaction with the state on the e-estonia platform built on blockchain technology.
— India recently introduced Aadhaar ID, a national, centralized, biometric database that allows people to have clear proof of ID in a country where many people, especially in remote villages, lack both access to documentation.
— in South Korea, the government unveiled a national blockchain strategy through which is will invest more than $200 billion into 100 blockchain companies and instructing 10,000 industry professionals.
“As startups use blockchain to drive greater transparency and veracity across the digital information ecosystem, they’re boosting awareness of the technology in sectors ranging from infrastructure to public policy,” reads the CB Insights report.
As Blockchains Expand, So Do Privacy Fears
It is in the volatile cryptocurrency industry, however, where blockchain’s technologies are creating the greatest disruption. The bitcoin cryptocurrency began making headlines a year after the global financial crisis of 2008 as public confidence was shaken in traditional financial institutions. Since then, the popularity of the global cryptocurrency markets has forced a growing number of countries to examine ways to regulate the markets.
Such a drive has new urgency as the world’s cryptocurrency markets have lost much of its total value this year, in large part because of instability caused by the hacking of a South Korean exchange.
Blockchain advocates say the public should consider the technology as nothing more than a new type of big database that operates on a more collaborative principle. “Companies always do business with each other, but they all have their own databases today and you don’t have a trusted way of sharing information,” says Ramesh Gopinath, vice president of IBM Blockchain Solutions and Research.
Yet questions about the technology persist. Last year, Harvard Business School professors Marco Iansiti and Karim Lakhani wrote an essay citing several reasons to consider whether the hype over blockchain is overblown. In an age of growing anxieties over data privacy, fears remain over the security with blockchain, worries that only grow as the number of people in a given blockchain ecosystem expand, experts acknowledge. “And it takes a long time to make the ecosystem come together,” Gopinath acknowledges.
[SEE: There’s A Cryptocurrency for Anything You Can Imagine]
And there lies the conflict. Fears over the use of blockchain grow as networks expand. Blockchains work better for complex systems with multiple parties that don’t really know each other. “If you have a database and it’s internal and you trust [those involved], then you don’t need the blockchain,” says Gilbert Verdian, CEO of Quant, a company that wants to make individual blockchain connect with each other, and member in the European Commission’s blockchain policy working group.
Change Arrives for Many Industries
Despite the worries, blockchain technology is expected to stay and change many other industries, such as education.
Many people in developed countries struggle to access higher education, due to the high cost associated with obtaining a degree. Blockchain advocates say the technology may make teaching and learning more efficient and thus reduce costs. Faster feedback also could allow students to change curricula faster, advocates say. Platforms such as ODEM or Code of Talent work with direct transactions between student and teacher and also with learning incentives for students, making education more transparent.
“As a student, you can develop skills by participating in micro-learning sessions created by teachers from different corners of the world,” says Bogdan Ciubotaru, co-founder of Code of Talent, a blockchain platform that will provide learners around the world with short learning lessons and rewarding their progress in tokens. “Those skills are stored by the blockchain so there is an immutable track of accomplishments that employers can access through our platform.
Blockchain also could affect the housing market by helping decentralize some real estate services as well as make transactions more transparent and secure. Implementing blockchain within the Multiple Listing Service, or MLS, could centralize and streamline the data, according to Matthew Murphy, an investor in real estate and financial technology. “By providing a way to securely share data, the blockchain makes a shared, nationwide database possible, one that offers real-time access to property information straight from the source and enables a more holistic view,” Murphy wrote in Forbes.
Projects such as velox.RE are looking into digitizing the process of obtaining property titles, as well as tracking them in real time, potentially lowering the costs of this service.
“Am I really paying $2,000 to title companies? Do I really need one?” asks Tina Gravel, senior vice president of global channels and strategic alliances at Cryptzone, a security network and compliance software provider. “When blockchain will be implemented in this field, this will put a lot of the money back in the hands of home buyers and that in return will help the economy.”
Advocates of the technology point to possibilities in other industries. Communication may tilt toward encrypted systems such as Telegram. Voting might also gain greater security and public trust through well-encrypted blockchain technology that is harder to hack. Ride-sharing services on the blockchain may directly connect drivers with riders without third-party fees.
Blockchain could help the media step away from the traditional ad-driven business model and allow readers to directly fund journalists. Health care records and profiles might no longer be stored by individual providers, but on blockchain platforms that everyone could access them in real time. And not too far into the future customers could see who produces every single ingredient that goes into the products they purchase.
“Ultimately, the use cases for a transparent, verifiable register of transaction data are practically endless — especially since blockchain operates through a decentralized platform requiring no central supervision, making it resistant to fraud,” reads the CB Insights report.
Transparency is the ultimate goal, say blockchain advocates.
“We’re getting in businesses without knowing the people who are helping produce our products. We’re sending our money and don’t know if it’s going where it says it’s going,” Gravel says. “That’s why blockchain could become oh-so-impactful to everything. Because right now no one knows who you really are online, but blockchain technology can fix this.”
Blockchain, however, has its drawbacks. Research from the University of Chicago’s Booth School of Business suggests that total transparency of entries on the blockchain, especially for those blockchains built within industries, makes it easier to overshare information and for competitors to use that information in a malicious way, such as by keeping prices high.
Additionally, there are systems where a blockchain type of connectivity that is based on authentication during each step of the process in order to ensure security makes little sense, experts say. And those are areas where centralization already ensures enough security.
“It doesn’t make sense whenever you can use a centralized database and traditional security to protect [data] in a way where you don’t have to have that trust factor at every single transaction [such as the blockchain requires],” Gravel says.
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