Transparency and traceability are the values that blockchain guarantees to secure and track products and their quality.
The values of transparency and traceability are found in all societal structures. They are the subject of a constant quest because they represent one of the guarantees of respect for democracies. The demand for political transparency is rooted in Athenian democracy, where all the actions of magistrates were publicly reported.
The increase in digital exchanges upsets the balance, and trust is weakened by this dematerialization, which has accelerated with the COVID-19. Transparency and traceability requirements are becoming the norm and are extending to more and more fields: politics, banking, supply chain, marketing, etc.
CRYPTOCURRENCIES
Transparency and traceability are well-known issues in banking: this is where blockchain technology first proved itself behind cryptocurrency (e.g., Bitcoin).
Today, central banks are even evaluating the possibility of launching virtual currencies. China and Japan have already announced the implementation of these currencies and the American and European central banks confirm the availability of a virtual currency within 1-2 years. Cryptocurrencies like Bitcoin pose a threat to central banks, which are afraid of losing the monopoly and governance of the currency. Central banks’ virtual currency is not designed to replace physical currency but to facilitate digital payments. Other big names in online payments, like PayPal, are now integrating cryptocurrencies.
The blockchain tool is not limited to the notarization of financial transactions: it offers many more possibilities. Today, it is starting to be found in logistics and especially in food supply chains.
BLOCKCHAIN AND SUPPLY CHAIN
For companies, the supply chain is an essential area that consists of tracking the origin and the journey of products from end to end. As the need for visibility becomes more prevalent, companies are under pressure to improve the transparency and traceability of their supply chain.
In this context, transparency focuses on mapping the entire supply chain and traceability looks at individual component lots or purchase orders as they move through the supply chain.
The supply chain suffers from opacity and a lack of data recording. Yet, the quality or origin of products are indicators highlighted by companies to guarantee the image of their brands and meet the needs of their customers.
Another point of vigilance for these companies in the fight against counterfeiting, which finds in this system of total traceability an infallible tool on the authenticity of products. The opacity present in the supply chains also comes from the outdatedness of the system, which still relies too much on paper registers imposing manual manipulations, sources of errors and waste of time.
The digitization of supply chain processes generates a lot of data to store, certify and expose to customers, partners, consumers, and regulators. In this model, the integrity of the data cannot be questioned, and its free access must be guaranteed. The objective is to maintain a certified register with the completeness of the data over the entire chain, which is precisely the service provided by the blockchain. Indeed, the blockchain is a decentralized database that cannot be falsified, even by an administrator. This concept makes it possible to eliminate trusted intermediaries and auditing services, which further improves the ROI to be considered.
Blockchain also provides users with a tool-based response to the need for transparency on products: provenance, constitution, transformation, transportation. User requests are translated into smart contracts recorded in the blockchain. These “smart contracts” automatically trigger order processes with all the conditions that, once fulfilled, generate the billing of the service. The difficulty lies in writing these smart contracts containing all the conditions and terms from order to delivery.
Smart contracts and blockchain are the links of future supply chains. This approach is already being tested in large groups such as Walmart and Amazon, but only its standardization can guarantee massive adoption.
AREAS OF APPLICATION OF BLOCKCHAIN
In FoodTech, blockchain is spreading at great speed, driven by consumers who want to consume more quality and proximity. The food industry wants to trace products from the seed to the consumer’s plate, through processing plants and transportation. The same is true for livestock farming, where the origin and how animals are treated are becoming key criteria.
The main constraint remains to standardize interfaces to ensure portability and exchange between companies: standardization is the measure that will enable widespread adoption.
By 2025, the food industry will adopt blockchain to track food.
BLOCKCHAIN IN LUXURY
In the luxury world, blockchain is being promoted to cover the risk of counterfeiting and guarantee product quality. Quality monitoring is a classic use case for controlling transparency and traceability in the supply chain. The threat of counterfeiting, particularly important in this sector, is constantly growing according to the Comité Colbert, it would represent a loss of about 10% of the sector’s turnover.
How to certify the origin of fabrics, stones, or other elements? How to follow up with customs? How to avoid counterfeiting? So many questions are addressed via blockchain to provide traceability and transparency to all actors in the industry or customers. Product tracking is not limited to the production chain; it accompanies the product during its marketing and for the rest of its life on the second-hand market. Thanks to blockchain, the luxury sector sees the possibility of offering secondary market buyers the same guarantees as in official distribution channels.
BLOCKCHAIN IN HUMAN RESOURCES
The Human Resources field is also impacted by blockchain. The candidate’s background, certifications, training, and professional experience are all criteria to be classified and authenticated. The full transparency offered by blockchain makes it easier to verify the information on the resume. With COVID-19, some schools are beginning to award degrees via blockchain services. The integration of this service in the HR process implies a structural change in the drafting of contracts via smart contracts: the time saving is considerable between the reduction of verifications and the speed of signing the contracts.
BLOCKCHAIN IN THE POLITICAL DOMAIN
Politics also finds in blockchain a viable alternative to postal voting, which was so much in the news during the American elections. Electronic voting via blockchain is not the answer to abstention, but it helps facilitate the process while providing reliability, traceability, resilience, and transparency.
TO GO FURTHER
Transparency and traceability are ensured by smart contracts hosted in a blockchain. This solution stores a very large quantity of quality data, an ideal playground for training the models used by Artificial Intelligence algorithms.
The combination of Artificial Intelligence and blockchain opens new perspectives for combining transparency, traceability and understanding of users’ uses and needs.
Read more articles about Blockchain in our blog.
