SUPPLY CHAIN TRUST: THE KEY TO BLOCKCHAIN’S APPEAL We’re hearing the term shared ledger cannot be altered by any stored in a blockchain, all parties with ‘blockchain’ a lot these single party or minority group. This is theaccess to the ledger can be assured days, but what is it and second potential benefit: immutability. each actor in the supply chain did the how might it benefit the red right thing. “It’s the running transaction history meat industry? saved to the ledger, or database, that is“By giving customers access to the MLA’s Manager of Information called the blockchain. data, they can be reassured of the Architecture and Solution Design provenance of their meal and even be “Every party using the blockchain has prepared to pay premiums.” Andrew Skinner is part of the team to agree on the values saved into tasked with answering those questions. the ledger. Smart contracts an added function “Blockchain first hit the headlines According to Andrew, there are several “If one party changes one of the values technologies that build on the core because of the cryptocurrency ‘bitcoin’,” in the database, the other parties will blockchain which add additional Andrew said. notice when checking their copy and desirable functionality, such as “It’s one of the underlying technologies the change will be made known to ‘smart contracts’. that enables bitcoin transactions to take the majority.” place, but blockchain’s potetia s far “Smart contracts are immutable ‘if this, Additionally, if one of the ledgers failsthen that’ type actions that can be broader than cryptocurrency.” or goes offline, the system remains stored on the blockchain,” he said. MLA is running levy and MDC-funded unaffected. This is benefit three: research projects to identify valuable transparency and high availability. “An example of a smart contract might blockchain opportunities for the red be: ‘If X conditions are met, then make Enabling trust a payment of Y.’” meat industry. “In today’s digital world where it’s “MLA has chosen to investigate blockchain hard to judge what’s authentic, where In an on-farm situation, where a producer to understand how it could improve information has come from and who has is using IoT sensors to capture information supply chain efficiency, compliance and had a hand in changing it, it’s easy to about health treatments or organic feed traceability, increase trust in product sources, a smart contract may be created see why these benefits are important,” in which a processor agrees to pay a provenance and transform the way Andrew said. per animal premium if certain health and transactions are managed,” Andrew said. feeding conditions are met. “For red meat supply chains, one area in How does it work? which blockchain technology is showing The premium would be paid more quickly According to Andrew, the concepts potential is supply chain security and than a traditional transaction, because behind blockchain technology are provenance due to the increasing proof of the producers’ actions would mathematically complex but, at its core, use of ‘internet of things’ (IoT) devices,be ‘sensed’ and immediately entered it enables trust in the transfer of value such as sensors. into the database, which could then orassets between two parties, without “When details such as compliance immediately execute the contract terms. ■ theneed for a trusted middle institution,measures, carton contents, shipping such as a bank. Andrew Skinner temperature and customs information E: askinner@nlis.com.au Blockchain technology is often referred are continuously sensed, recorded and to as ‘distributed ledger’ technology because all the transactions are recorded in a list that is shared between all users of the blockchain. This is the first potential benefit of blockchain for the Australian red meat industry: decentralisation of data. “The detail of each transaction recorded in the list is referred to as a ‘block’ of data,” Andrew said. “What’s important about these exchange records is that the cryptographic technology that enables blockchain ensures the records written into the 37