What is it?
Invented in 2008 – bitcoin was invented to become an alternative system of money that would be beyond the control of the government and central banking entities. Perhaps best defined by Wikipedia;
A blockchain[1][2][3] — originally, block chain[4][5] — is a distributed database that maintains a continuously-growing list of records called blocks secured from tampering and revision.[1] Each block contains a timestamp and a link to a previous block.[6]
The blockchain is a technology that underlies bitcoin—conceived in 2008 and first implemented in 2009—where it serves as the public ledger for all transactions.[1] In the bitcoin case, every compatible client is able to connect to the network, send new transactions to it, verify transactions, and take part in the competition to create new blocks.[7]:ch. 01 The competition creating new blocks is known as mining.[7]:ch. 01 The bitcoin design has been the inspiration for other applications.[1][3]
Full definition here; https://en.wikipedia.org/wiki/Blockchain_(database)
Blockchain has many other definitions – distributed ledger technology, permissioned ledgers, mutualized database and many more I am probably missing.
What could it do for agribusinesses?
Consumers desire more transparency into how the food they consume has been grown, transported and packaged. I am not sure how much they are willing to pay for the added costs to create this chain of information. However, Blockchain could provide a cost-effective time-consuming method to create the tracking of food products through the entire agricultural value chain. Here are a few areas that it could provide a technical solution for some of the more routine time-consuming activities in our world:
- Tamper resistant data transfers across our industry.
- Reduce counter-party risk.
- Save costs on trading and movement of commodities across the value chain.
- Create transparency in farming techniques and products and food production.
For a great story on this, check this link out; https://news.bitcoin.com/blockchain-agriculture-industry/
Pitfalls
With an interest in the new technology, I recently purchased a book on Kindle called “Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World”. I am about half finished with it and it is a good read giving the reader
many ways in which it can transform how things are traded, transferred and paid for in our world. The reason that I have not finished it as of yet was a story on hacking when I reached the half-way point. I had been lead to believe this was the end all solution for
most everything in our ag world. Then, on June 19th I read about the hack of the chain that pulled $79.6 million Decentralized Autonomous Organization and quickly realized that perhaps there are few more kinks to work out on the technology!
Big problems always seem to get solved, so I am sure many are feverishly working on a fix to make the technology safer.
Summary
Either way, Blockchain technology is something for all of us to keep our eyes on. The potential for speeding up financial transactions alone would create some wonderful efficiencies in the world. Here is a good link with 8 charts that do a great job of explaining it
from the book I mentioned earlier – “Blockchain Revolution”; https://www.raconteur.net/latest/the-future-of-blockchain-in-8-charts/.
With the potential that Blockchain could provide, I certainly plan on keeping my eye on it and will share here with anything I uncover. Both NASDAQ and the Australian Securities Exchange are both implementing it, so it’s already here.
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