Blockchain Technology Application in the Food System


The popularity of blockchain technologies, including Bitcoin, has just begun to reach peaks in 2017. Among new currencies called cryptocurrency where transactions are made without a built-in intermediary (i.e. banks), bitcoin stands out the most. Although cryptocurrencies have similar functions to other currencies, they are not linked to a nation-state like traditional currencies. The fundamental design, blockchain, can use the capability of a worldwide, open arrangement combined with the cryptologic hypothesis for creating a secure, trust-less implies of trading esteem or data [1,4]. Blockchain technology has a wide range of applications in many food industries, especially in areas such as traceability, logistics, and finance [1,9]. Blockchain technology has emerged with the renewal of an old concept. Blockchain uses technology that can reduce the reliance on external agencies in favor of cryptological evidence to improve some of the disadvantages of private ledgers inherent in the business [1,8,9]. Thanks to the blockchain distributed across a mutually shared network, all stakeholders of a supply chain and Key Data Items (KDEs) can be on the same page to communicate traceability goals.

The term "blockchain" was first used in an article, which conceptualizes chronological data blocks linked via a networked cryptological chain, written in 2008 by someone using the Satoshi Nakamoto nickname [4, 5]. The next year, Bitcoin was created by Nakamoto based on this concept [1]. Although blockchain technologies are a ledger with a large potential of features depending on the architecture, its first iteration focused on creating a non-corporate currency [1].

Hash-based cryptologies are used by a blockchain to ensure security and trust [4,5]. A hash is called strings or an encrypted version of a string when it becomes numerically impossible to derive a keyless original [5]. Combining transaction details, transaction timestamp, a new hash combining the hash and details of the previous transaction are the three basic data pieces of the blockchain [5]. Then each transaction is distributed across the network. During this process, keeping a continuous encrypted record of the transaction ensures that it becomes immutable when added to the blockchain [4,5].

An analysis algorithm checks the pending transaction and then is distributed across the network to the shared ledger. Thus, the changes in the blockchain are verified [3]. When this verification process is completed, the transaction becomes a permanent part of the chain. "Miners" are called nodes through which transactions are verified [4,5]. Differences in blockchain architectures are primarily seen in the choice of solving algorithms. Some algorithms prioritize throughput and speed, others to decentralization and anonymity [3].

Blockchain users have two keys, private and public. The public key is the way to send material to a specific person on the blockchain, while the private key verifies transactions from the individual owner.

Blockchain in Supply Chains and Food Traceability Systems

Although generally built on the basis of cryptocurrency exchange, most blockchain applications can be applied to any situation, theoretically requiring guaranteed or verified information. The great interest among technology and finance and supply chain technology companies is based on the ability to rely on peer-to-peer networks rather than central institutions [1]. Thus, companies in the supply chain, which can have a more transparent and decentralized system, will be able to enter data into the system with a degree of anonymity and control that can encourage universal adoption. Another attractive quality of blockchain systems is the data validation obtained from the cryptological structure [9].

Factors such as the query speed of traceability systems, the immutable and shared nature of the system, and the simultaneous capabilities of anonymity and transparency shape the value of blockchain use. It includes a central system concern for traceability, a single point of failure, the opacity of such a system, and the foundation of the provider's trust. Blockchain has the capacity of parts of the food supply chain to enter data into a shared ledger that reaches both ends of the market, covering the whole process from producer to consumer. Companies can enter traceability information as well as keep important proprietary or commercial competition information confidential [9].

Since 2018, supply chain and traceability solutions where blockchain technologies have been applied have been preferred only in limited pilot studies. Open source blockchain bases such as Ethereum or IBM's Hyperledger have begun to be discovered by many companies for use in their supply chains [7]. Some of these pilots appear to be combined with other technologies such as internet-enabled sensors [2].

Many of the benefits of blockchain systems don't have to be exclusive. Adopting common KDEs can be made easier by using a distributed system that is implicitly not owned by a particular organization. It is possible to use more fragmented approaches for data collection and dissemination while having harmonized KDEs in the industry [6].

Difficulties to Be Faced

Bitcoin's popularity has revealed some drawbacks that should not be ignored before being extensively applied to industries such as food traceability, logistics. The most important of these disadvantages are the natural concession that exists in the blockchain, such as limited transactions per second, that cause disruptions in information exchange [3,4,9]. For an industry that processes between thousands and millions of transactions per second, such interruptions are not acceptable for scaling a blockchain plan. Also, the delay or time required to add a data block to the chain is likely to be problematic [9].

As can be encountered in any technology innovation, interoperability is likely to have a huge impact on implementation delivery. In terms of blockchain, this could mean agreeing on a common denominator platform to be used for a given supply chain [6]. As a result, only existing business and transactional relationships in an industry can be developed by blockchain. Nevertheless, KDEs will need to be standardized.

There will inevitably be speculative businesses and they use blockchain technology as a questionable value-added service. If we are to give a similar example, as a result of the dotcom boom in the 1990s, e-commerce companies sprang up. But many of these companies were not aware that they were making bad business decisions because they were fooled by the tears of new technology. The most infamous example of this is For this reason, when investing in blockchain technology to increase traceability, it is very important to be sceptical of how effective the blockchain is at solving supply chain problems. It is necessary to be careful with extraordinary promises. In supply chains, cryptocurrencies don't seem to be completely necessary to use blockchains. For this reason, it's necessary to be significantly sceptical concerning firms that wish to take a position in cryptocurrency [6].


Especially when it comes to the food traceability industry, blockchain is not the only fish in the sea to be a solution. Almost every initiative that started using blockchain technologies has not made great progress and is still in its infancy. Many non-technology deterministic factors are influencing adoption. Besides, improved tracking capabilities with increasing visibility, collaboration and institutionalization can be an excellent way to find solutions to food traceability problems.


CONTENT: Türkan Elçim




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