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Blockchain can fix our broken relationship with the material world

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Could blockchain make us more conscious consumers? Jessi Baker, founder of Provenance, certainly thinks so.

We know surprisingly little about most of the products we use every day.Even before reaching the end consumer, goods travel through an often vast network of retailers, distributors, transporters, storage facilities and suppliers that participate in design, production, delivery and sales, yet in almost every case these journeys remain an unseen dimension of our possessions.

The creation, exchange and use of material things, however, has many potential negative consequences: environmental damage, exploitative extraction, unsafe work conditions, forgery and the huge amounts of valuable material wasted at the end of product life. Our relationship with the material world is broken.

Deloitte: Blockchain can transform emerging ‘trust economy’

But still, it’s clear the narrative around the things we buy is important to us – it is why the story behind brands are so vital and intoxicating to the tribes that follow them. It is why, to date, we have supported a fundamentally unsustainable system because we “think different” or believe “you’re worth it”.

The journey

Today, it’s easy to forget every product has its own real-life story, but for an increasing number of brands, proud of the provenance of their products, the truth of that journey is the most powerful story they can tell.

In the UK, 30% of consumers are concerned about issues regarding the origin of products, but struggle to act on this through their purchasing decisions.

The market for products of proven origin is growing and there is a growing rallying call by customers and governments demanding more transparency from brands, manufacturers and producers throughout the supply chain. This rising change isn’t just fuelled by a desire for more sustainable products, it’s being ignited by technology.

Pioneering companies have long realised the competitive advantage of open, transparent supply chains and sustainable manufacturing. Sustainability standards and certification (eg Fairtrade, Forest Stewardship Council (FSC) and Soil Association) have been an important tool to enable choice differentiation and conscientious consumption, yet in the end the outcome of certification is often just an image file or printed label on the packaging whose actual meaning is difficult to know and hard to verify.

Guaranteeing the integrity of certificates is a costly process that, despite laborious audits, still struggles to assure the validity of the claims being made. Worldwide expansion of certification schemes in regions with levels of high corruptions further endangers credibility.

Trust

Despite various efforts, full “chains of custody” that tell the stories of products remain largely rudimentary and difficult to verify. Fragmentation of these efforts make them open to fraud.

To connect the dots, nominally neutral, not-for-profit or governmental entities are commissioned with the task of creating a centralised data storage to enable a flow of trusted information.

The truth is, no single organization can be trusted to broker all data about every product’s supply chain, and relying on one party (or even a small collection of cooperating parties) creates an inherent bias and weakness in the system.

If the party were the brand itself, or the most powerful actor in the supply chain, then it would be responsible ultimately for only its own bottom line. If the supply chain data were gathered by a third party, it would have to be both totally unbiased and properly incentivized to deliver the technical capability of running the system.

Third parties like NGOs or industry associations, however, rarely manage even one of these two, and even if they could, they would become a single point of weakness; this would make them and their operations a vulnerable target for bribery, social engineering, or targeted hacking.
Despite these difficulties, the idea of using a centralised system with a governing third party was, until recently, the only conceivable way to achieve data and transaction transparency along supply chains. Today, however, blockchain technology is changing everything.

For data handling, blockchains present a way to take what the internet did for communications and power a paradigm shift to something far more fundamental to brands: trust.

An alternative approach

At Provenance, we believe the use of blockchain technology provides a number of truly unprecedented breakthroughs for certain public-interest information, specifically, the supply chains of consumer products. Instead of central silos, the blockchain gives us a secure and auditable global database we can all share, whilst protecting identity.

We are offering an alternative approach to the certification and chain-of-custody challenge in sustainable supply chains: a system to assign and verify certifications of certain properties of physical products; e.g., organic or fair trade. A digital ledger, where anyone in the world can transfer digital assets (eg a record of ownership) to each other without the need for a centralised authority (eg a bank). What’s more, they can then be sure the data is safe, can be verified and hasn’t been tampered with – ensuring its legitimacy.

This would incorporate the various materials and components from initial production through manufacture and assembly to the final customer. At each point in time, the Provenance application details four key properties concerning all materials and consumables it covers: the nature (what it is), the quality (how it is), the quantity (how much of it there is) and the ownership (whose it is at any moment). Key attributes may be read and linked from pre-existing datasets such as barcodes, or newly ascribed along the way.

The blockchain removes the need for a trusted central organization that operates and maintains this system. Using blockchains as a shared and secure platform, we are able to see not only the final state, but crucially, we are able to overcome the weaknesses of current systems by allowing one to securely audit all transactions that brought this state of being into effect; i.e., to inspect the uninterrupted chain of custody from the raw materials to the end sale.

The blockchain also gives us an unprecedented level of certainty over the fidelity of the information. We can be sure that all transfers of ownership were explicitly authorized by their relevant controllers without having to trust the behavior or competence of an incumbent processor. Interested parties may also audit the production and manufacturing avatars and verify that their “on-chain” persona accurately reflects reality.

For businesses today, trust needs to be generated. With the inception of the blockchain, how we trust in products, brands and business could change completely. For a brand, revealing details of a supply chain currently requires them to disclose sensitive information about producers or suppliers. Using a blockchain based system, it is possible for identities to be protected, while still transferring other salient information. or example, manufacturers in the middle of the supply chain could securely pass a certificate with full authenticity downstream while keeping their identity private.

Customers also have to trust that those businesses aren’t greenwashing or being selectively honest. With blockchains, a system can emerge where information can be shared in a decentralised, secure and auditable manner, whilst protecting identity, IP and other critical business information.

The choices we make in the marketplace determine which business practices thrive. The blockchain could bring a new dimension to products, one that allows great business to flourish as they make their impact transparent in a truly trusted data ecosystem.

From a diamond in a mine to a tree in a forest, it is the furthest ends of supply chains that damage so much of the planet and its livelihood. This new system could be a unanimous source of connected information, secure and incorruptible, to allow the purchasing decisions throughout supply chains and by end consumers to be smarter.

The premium cost of ‘Fair trade labour’ and ‘sustainably farmed’, and other socially and environmentally beneficial product and business affordances, are intangible, but increase the value of goods: With Provenance, they can be understood, carried and trusted as they travel the most complex chain of custody.

This article first featured in Tech City News’ popular print magazine – The Blockchain Issue. Subscribe to receive future issues delivered straight to your door. 

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