We think there's more to blockchains than a transaction processing system for the financial services industry. It can foster sustainability, make globalized trade less opaque, and give early adopters a significant competitive advantage.
The key here is our 3T principle:
Bring transparency, trust, and traceability to the people.
During the journey from the producer to the consumer, several stakeholders touch the goods - processing facilities, exporters, importers, customs agents, wholesalers, to name just a few. Think of seafood. If its cold chain is being interrupted for too long at any point in time, salmonellae can develop. The resulting infections have the potential to kill whoever is eating the spoiled products - a prime example of a sensitive supply chain.
Consider any product with a sensitive supply chain - that means any supply chain where non-adherence to the given instructions can endanger the consumer or other stakeholders along the supply chain. The food and beverages industry may be the most obvious example. Some products have long value chains before they reach the country where they are sold.
is the Keyword Here.
Every time we go grocery shopping, we have to trust someone - someone we don't know. Trust that the cold chain has been adhered to. Trust the indications of origin. Trust that we don't support child labor with our purchase. Trust the ingredient list on the meals we buy.
The contradictory point is that there has been a high demand for certiﬁcations of origin in other industries, but not in the F&B industry. Does it sound right that we have detailed production data at hand about the clothes we wear and the jewelry we carry, but not the food we consume and the medical products we use?
The Corona crisis has been an eye-opener for many of us in that sense. About how connected our world is, about how reliant we are on foreign economies, how opaque global trade has become, and especially how little we know about all of it. The pandemic will foster the demand for transparency for the years to come - consumers won't accept opaque supply chains any longer. Companies who adopt now will proﬁt from this trend in the future.
is the solution.
Do we want to rely on trademarks and organic food certiﬁcations any longer? Or is it time to start enabling consumers to decide on their own which products meet their standards?
We all have our own deﬁnitions of a premium product or a sustainable product. For some of us, organic production may matter the most. For some, it's fair treatment of workers, over-average pay of the farmers, CO2-neutral transport of goods, non-artiﬁcial processing, and so on.
The point here is that nothing should be pre-deﬁned, and everything must be 100% individual. Every consumer should be able to retrieve as much data as possible for the product he buys and decide on his own whether the product is for him or not.
is a strong concept.
Do companies really want us to know all about their supply chains?
To achieve full transparency, they have to open up, with no possibility left to hide anything. Lay open their supply chain data, all stakeholders, all logistical data, and many internal processes.
We know that most companies won't be willing to do this. We don't want to work with the broad mass of companies. We want to work with the pioneers, the early movers, those who want to make a difference. We want to enable businesses to set the trend for the coming years.
We help our clients to outrun their competition by being the ﬁrst ones in the market. What if, for the ﬁrst time, companies could prove what they promise? What if supply chains would become transparent for the ﬁrst time? We would deﬁne a new meaning of sustainability. True sustainability.
How can a technology used in the ﬁnancial services industry to carry out transactions be used to bring transparency into other industries?
It's the nature of the technology that makes it so suitable for traceability. If we want to create a complete ledger that includes all data related to a speciﬁc product, we need a database to store them ﬁrst. Blockchain, in essence, is nothing but a database architecture. But it has some unique attributes to it, compared to conventional databases that makes it interesting to use in this context. The database doesn't rely on a centralized data authority. All data is stored on multiple instances, so in order to alter the data, everyone who is part of the system has to agree. We call this a distributed ledger database.
How does this apply to traceability?
We established before that in order to set up a fully transparent traceability system, a database with all data about the product has to be created. The more complete the data, the more it can be considered fully traceable. Given we use a conventional, centralized database, all product-related data will be entered by the various stakeholders: what was the production date, who is the farmer, where was the product sold, when was it shipped, and how long has it been in storage. This data can then be presented to the buyer/ consumer through a user-friendly frontend. But the administrator of this centralized database can alter all the data at any point. That makes a traceability system redundant. We have to trust the seller again.
We have to trust the seller again
Assume we use a blockchain database to power the traceability system. The underlying distributed ledger technology records all changes made by anyone with a timestamp and provides a ledger of all activity to all participants. Once a set of data has been entered, it can't be changed anymore - at all. This is the nature of the technology and can't be altered. If we have all the data in a blockchain database, we can ensure that the end-user of the application will see exactly the data that has been entered in the beginning. Blockchain technology allows for full transparency between stakeholders.
Automated contracts and audits
We want to enable two parties to enter into a contract without having to trust each other. With our applications, we can remove trust. This means that we can make it easier than ever before for two unknown parties to enter into a business relationship. It also means that audits are getting a lot easier. If all the data is already in place, we can automate audits and leave very little space for misconduct.
We can connect all stakeholders on any supply chain
This unique set of capabilities attracted interest from many areas of the business world and beyond. Government agencies, regulatory bodies, and NGOs are showing interest in blockchain-powered systems to facilitate their work. If we can provide immutable production data to consumers, why can't we provide them to customs agencies?
We can! We can speed up the import process through the instant provision of all product-related data to customs. We can facilitate the import of highly regulated goods by working with regulatory bodies and NGOs.
Internet of Things
Data stored in a blockchain database can't be altered anymore.
No more trust required. But what about the data input? What if corrupted data is inserted into the database? There's another point of trust involved. Each stakeholder involved in the process has to insert its data truthfully. If we combine blockchain technology with another technology of web 3.0 we can eliminate this issue. Internet of Things (IoT) is the concept of an environment of connected smart devices delivering data into a database. The difference between conventional sensors and IoT-sensors is that data is inserted directly by the device itself: no human intervention is necessary, no human errors, and no human manipulation is possible.
Data enters the database directly and immutably, and once entered into the database, it can't be altered anymore. Is this perfect data security? Not quite yet, but it's the base layer for a traceability system that brings transparency to where it's needed.