OriginTrail Blazes A Blockchain Path In Food Chains

Blockchain, ICO News, Innovation, Regulation | November 17, 2017 By:

OriginTrail offers a blockchain protocol to track the provenance of foods in the fragmented global foods markets. The protocol allows for blockchain-supported data-sharing, providing transparency through consensus checks and data storage.

The Slovenian-Serbian team recently opened an office in Shanghai to focus on implementation of blockchain use cases in one of the world’s largest markets. The solution has been in use via three pilot project with European food producers since 2016, with more than 1,200 farms included and tracked with the system. The project’s roadmap envisions an open call for more use cases in 2018 and the launch of the OriginTrail Decentralized Network – a peer-to-peer network that will enable further development of decentralized apps for inventory management, supply chain optimization, compliance, certifications, and more. The protocol is supporting GS1 global standards for data exchange and can include Internet-of-Things data.

An initial coin offering (ICO) is planned for December, with the pre-sale starting on Dec. 1.

Ziga Drev, co-founder COO, answered some Block Tribune questions on the protocol.

BLOCK TRIBUNE:  There are several solutions in the market to monitor food supply chains. How do you foresee this shaking out?  Are there enough food resources that we will see a world of specialty blockchains develop, covering specific products or countries?

ZIGA DREV: Our story started with food safety, but decentralised OriginTrail protocol we are developing can be used for any product supply chain, regardless of the industry. It functions as a “middleware” built on top of different blockchain technologies (we see some other solutions as complementary, although our current focus is on Ethereum) and hardware and software applications for supply chains. OriginTrail Decentralised Network addresses what we learned to be 3 crucial challenges, which have not been addressed by any of the existing solutions –

(1) poor interoperability of data within supply chains (or even within one organisation), (2) inadequacies of blockchains to efficiently store highly interconnected data needed for supply chain and (3) issues with sensitive data that make companies more reluctant to share data

BLOCK TRIBUNE: Explain your differentiation in the market and its interoperability.

 ZIGA DREVOriginTrail is both ERP-agnostic (can easily be set up with any organization’s IT system because it uses global GS1 data standards) and blockchain-agnostic because data is synchronized on its own decentralized network whereas fingerprints of data can be stored on any blockchain. At the same time, we are parts of several IoT related initiatives that work on standardizing sensorial data that will also be used in OriginTrail protocol.

BLOCK TRIBUNE: How big a problem is the food supply chain when it comes to provenance?  What are some of the other issues that potentially keep distributors up at night?

ZIGA DREV:  For most of the food we eat every day, we can only trust that it was produced and handled in an appropriate and safe manner. Unfortunately, this trust was severely damaged by some large-scale food safety scandals in recent years. They left consumers concerned and paying more attention to where their food comes from and what can they do to protect their health. This is especially visible in some large markets, such as China. That’s why we decided for our first blockchain pilot project there.

The main fear that end-distributors or consumer brands currently have is that they bear almost all responsibility if any wrongdoing is discovered. In the era of social media, reputation can quickly be ruined and financial damage can be enormous. But the distributors often don’t have means to check the veracity of data back to the source, because most of the supplies are tracked only one-step-forward, one-step-back. OriginTrail protocol is changing that by enabling seamless synchronization along the supply chain. It is enabling further development of decentralized apps (dapps) for better supply chain management, alert systems, easier certification, auditing, and integration with IOT ecosystems and auditing bodies for improved data objectivity.

BLOCK TRIBUNE: Why are you based in Hong Kong?

ZIGA DREV: The not-for-profit company is incorporated in Slovenia, EU. Slovenia has a good local blockchain ecosystem and supporting legal & operational infrastructure. We currently have a project office open in Shanghai, China, from where we manage the projects there. Since we received a lot of interest from Chinese companies that have their supply chain extended to other Asian countries, we decided to plan for a permanent presence there. In the roadmap, we plan for an office in Hong Kong as a base for managing the implementation of further pilot projects in the broader region.

BLOCK TRIBUNE: How long of a transition will it be before the majority of the world’s food supply is tracked via the blockchain?

ZIGA DREV:  We are confident that blockchain is set to become a standard. However, blockchain is not disruptive by itself, but it is rather a foundational technology that should be complemented with other technological layers. OriginTrail is the missing middleware which will of tremendous help to companies that want to build trusted supply chains. In the multi-organisational setting, OriginTrail will enable companies to manage data that is currently hidden in data silos in each respective organisation which prevents greater transparency. As such we are convinced it will speed up the usage of blockchain not only in food systems but also in other product supply chains.OriginTrail also enables including more tracking information by incorporating Internet-of-Things data, so even more information can be gathered and immutably tracked (e.g temperature in the trucks).

The very fact that our solution was admitted in Walmart’s Innovation Pipeline is a recognition that such a solution is interesting for the world’s largest players in retail and logistics. Walmart is one of the global leaders in innovating with a blockchain and has recently also announced cooperation with IBM in this field.

BLOCK TRIBUNE:  Tell me about your plans for the ICO. What is your reserve, and what will the coins allow users to do?

ZIGA DREV:  Our token sale details are now published. 50 % of token supply will be offered to the public. “Trace” will be a utility token, tokens will be an incentive to the nodes to perform the system functionalities. For any interaction with the protocol, either inputting new data or reading from it, requires Trace tokens to compensate the nodes that are carrying out those tasks. In order to ensure all the needed characteristics of the protocol, nodes are also performing certain checks with data (consensus within the supply chain, data quality check and data replication check). For every such operation, nodes in the network get compensated.

BLOCK TRIBUNE: There is an old saying that anyone who loves the law or sausage should never see either made. In the same vein, are there things you have learned about the food supply chain that you wish you could forget?

ZIGA DREV:  Melamin-tainted baby formula, 40-year-old frozen meat, cat meat sold as rabbit … those are only the most extreme of several food scandals that have been plaguing the Chinese food industry for years. No wonder the trust in the Chinese food system and its producers is extremely low among the Chinese consumers and those who can, especially the rising Chinese middle class, are increasingly cautious about the food they buy.

We have years of experience with building trust in supply chains and we started applying blockchain to this solution in the past year. What our in-depth knowledge of global supply chains have taught us is that if there is an opportunity for misbehavior and where risk in unequally dispersed (because of complex supply chains), eventually misbehavior will happen and trust can be broken. We can’t completely eliminate human factor, but because blockchain enables immutability of data and OriginTrail network enables quick traceability back to the source, any intentional fraudsters will stay away from such solution.