Posted on

Safety – Blockchain: What is it and does it live up to the hype?

Written by Hillari Bynum
Originally published in Innovation
20 July 2019

 

Hand touching global network connection and data exchanges on sky sunset background. Technology and telecommunication concept.

 

Blockchain Fundamentals

 

The easiest way to understand blockchain technology is to think of it as an electronic notary. A notary protects the integrity of a document by verifying the signer’s identity, making sure they aren’t being forced to sign under duress or intimidation and making sure they’re aware of the contents of the document or transaction. So, when a document is notarized, you can feel confident the document is legitimate.

 

Blockchain serves a very similar function.

 

A blockchain is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. By design, a blockchain is resistant to modification of the data. It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.”

 

Therefore, like a notary, Blockchain protects the integrity of the information stored within each block.

 

Why is Blockchain such a buzzword in the Food Industry?

 

During a foodborne illness outbreak, one of the biggest challenges is determining where the contaminated food originated from and where it was distributed/served/sold. There is not an easy way to track down this information; which makes managing a recall, or an outbreak, incredibly tricky, time-consuming, and dangerous.

 

Blockchain could change all of that.

 

Blockchain technology can keep a record of the entire supply chain. If Blockchain were implemented across the food industry, it would be possible to see everywhere a single piece of produce has been — from farm to plate. Consumers and food industry professionals alike would be able to see if a recall had impacted their produce or if it was from the same farm that is being investigated for a foodborne illness outbreak. Cool, right? It doesn’t stop there! This enhanced traceability could also help protect against food fraud by providing a verifiable record or every stage in the supply chain.

 

Okay great, let’s do it.

 

It isn’t that easy. There are a lot of very real obstacles in the way, and there is no easy solution.

 

Slow Supply Chain Adoption

 

In a dream world, when helpful technology is created, people rush to adopt it because they know it is valuable. In the world we actually live in, the reality is much different. Many key stages of the food supply chain operate with very low margins. Growers, packers, slaughterhouses, wholesalers, and harvest companies have very manual processes – and they don’t always have the capital to invest in technology. The other thing these companies are short on is time for training. Successful implementation of a new system requires time, money, and desire. When you’re operating with a shortage of time and money, desire is hard to come by as well. Transparency and traceability are popular ideas throughout the food industry, but when it comes time to actually turn that idea into reality, many companies have an “if it ain’t broke, don’t fix it”attitude.

 

The unfortunate reality is that people often pay the cost of food traceability at the early stage of the supply chain (growers, packers, processors) and the benefit is felt the strongest by those at the end of the supply chain (retailers and consumers). What this means is that we are asking the companies with the smallest margins to make the most significant investments – which they are often unwilling or unable to make. It is a fair point, outside of altruism, there is not a clearly defined business benefit to growers — so we are asking them to complicate their process, invest time and money, for little direct benefit.

 

This is particularly damaging because Blockchain won’t be revolutionary if it is only protecting part of the food supply chain. To be completely effective, every piece of the food supply chain needs to be on board.

 

 

Food Fraud is big business

 

Experts estimate that food fraud is now a $40 billion-dollar business. Unfortunately, the people committing food fraud are making a lot of money, and they are likely to be involved at some point in the supply chain. Blockchain and traceability technology threaten this business because of the technological ability to sound alarm bells and alert the world to food fraud. So, to protect their business model, these criminals will fight traceability implementation tooth and nail.

 

Too many independent systems

 

There are a lot of small-to-mid-sized companies offering traceability solutions, but unfortunately, these systems don’t always talk to each other. Blockchain success is heavily dependent on private tech companies being open to working together and sharing their data — which historically, they are not.

 

Traceability is different for different groups

 

Traceability varies by industry and product. For example:

 

  • Agriculture/Farming: Identification starts with the birth of livestock or planting and moves through the growth process, use of pesticides, nutritional records, vet records, and transportation records;
  • Food Processors: Identification starts at the source of each ingredient and follows through the processing, packaging, distribution, and transportation process;
  • Retail and Food Service: Identification starts with receiving receipts/invoices to identify the lot and batch information with regulations not requiring tracking “one-up” to the final consumer;
  • Transportation and Distribution: Commingling points of contact are vectors for the spread of disease. Waybills should contain source party and target party identification. Specific locations are needed for livestock in most countries. If products are disaggregated for smaller shipments, then records need to reflect lot/batch codes of the manufacturer or processor.

 

Different groups have different motivations, and it may be difficult for a system to accommodate the needs of each industry or product.

 

So, does it live up to the hype?

 

The short answer is maybe. Blockchain represents immense possibility, but it also comes with equally immense challenges. If the food industry doubles down on Blockchain and can secure engagement at every phase of the supply chain, the results would be revolutionary. However, if there is only partial adoption of traceability technology, it will be far less successful.

 

There is a reason to be optimistic, however! The FDA recently launched the New Era of Food Safety program that looks ready to move the food industry forward into new traceability technologies.

Posted on

Finance – Get Ready: Blockchain Will Transform the Legal Industry

Andries Verschelden 

Originally published on Armanino
13 June 2019

What if someone told you that a new technology would significantly impact every law firm within the next 10 years—and would influence how your firm gets paid, the types of services it offers, and everything in between?

Consider this a wake-up call for a future that looks very different than today, thanks to the technology called blockchain. While still a nascent trend, blockchain is already proving to be a transformational force, changing how people and businesses around the world transact with each other by enhancing the trust, accountability, efficiency, and effectiveness of those transactions.

Don’t assume that blockchain is only for cryptocurrency enthusiasts and specialists. It’s poised to make rapid inroads into all types of industries across many different use cases beyond cryptocurrency. As such, clients will need expertise and guidance for the proper legal frameworks for using blockchain. Law firms that don’t want to get left behind need to pay attention, and start gaining experience and planning their blockchain strategies now.

This image has an empty alt attribute; its file name is iStock-953499010.jpg
An abstract digital structure showing the concept of blockchain technology with hexadecimal hash data inside each block. This image represents a conceptual design in the domain of IT, cyberspace, cyber security, cryptocurrency or similar industry sectors. The image is a made up 3D concept render.

Defining blockchain simply

Let’s start with what blockchain is not. It is not software that you can buy from a vendor nor is it “owned” by any one company. No one group or country controls it, and anyone, anywhere in the world can use it. While these characteristics can make blockchain seem complex and nebulous, when you think about it, the Internet has the very same characteristics. We don’t have to understand the technical details of the Internet to know it has tremendous impact on our lives and livelihoods.

So, what is blockchain? It’s open source technology that enables the creation and management of a global, autonomous network where information is secured in an immutable and transparent ledger. There are already thousands of networks in use, both publicly and privately. What’s special about a blockchain network is that it gives everyone who uses it access to the same information in a way that ensures the information can be trusted.

Changing the legal industry

Because it’s somewhat early days in the blockchain evolution, innovators are still identifying all the ways it can be used. Perhaps the most common application right now is for peer-to-peer transactions that transfer digital value between two parties in a trusted way without a third party involved.

However, blockchain is also being envisioned and tested to make supply chains more efficient, give artists greater control over digital ownership rights, streamline real estate transactions, manage Internet of Things networks and much more.

Because it changes the way people and businesses transact and communicate with each other, blockchain will begin to impact and evolve the way legal services such as contracts, escrow account management, transactions and much more are handled. Here are some ways blockchain is already poised to reshape how law firms work:

  • Smart contracts: Instead of being traditional, static documents (whether digital or paper-based), contracts will evolve to be programmatic components of a blockchain network, where the terms and conditions of the contract are automatically applied.
  • Automated securities settlement: Many of the routine change of ownership transactions handled today by law firms will be automated within blockchain networks in the future, such as transferring real estate or ownership shares in a business. Compliance and restrictions all happen automatically, as they are built into the blockchain protocol code.
  • Payments via digital assets: As clients adapt digital assets such as cryptocurrency, it will be increasingly important to be able to accept these types of payments.
  • Escrow accounts: Smart contracts can automatically release funds into a digital wallet at the completion of some pre-determined criteria, eliminating the need for escrow accounts in many transactions.

Establishing an essential role in the blockchain evolution

For forward-thinking law firms that have embraced the changes on the horizon with blockchain, it’s already opening up new practice areas and service opportunities, which can eventually replace those that will shrink and go away. Sharp legal minds are required right now to help organizations understand the appropriate legal framework for using various blockchain networks for different use cases. There is much to do to move from physical assets to digital ones, and the legal industry must be a vital part of the effort.

Lawyers who understand the concept of smart contracts will be in high demand as more businesses begin moving to blockchain. By combining understanding of how blockchain networks function with deep legal knowledge, firms can create blockchain practices that provide legal guidance to organizations of all kinds as they both create and participate in blockchain networks.

This image has an empty alt attribute; its file name is 6-2019-expo-ad.jpg

Taking the first step

As the world evolves towards transferring assets and information digitally using blockchain, your firm must be ready to both adopt blockchain and provide legal counsel on how your clients can adopt it as well. One way to ease into the world of blockchain is to begin accepting digital assets as payment for legal services rendered. Unless you already have blockchain expertise on staff, turning to a trusted service provider can expedite your implementation while helping your firm avoid missteps.

In any case, you need to begin understanding blockchain now. If clients aren’t already asking about it, they will be soon, which means you need to start establishing blockchain expertise before your competitors beat you to it.

For more information contact Andries Verschelden or Terri Oppelt