Blockchain technology can be used to track the journey of an asset on an immutable ledger. However, a major vulnerability of such blockchain-enabled tracking is that it relies on the authenticity of the initial data associated with the tracked asset.
Process
As used in computer science, the term “Garbage In — Garbage Out” means that when the input is nonsense, the output will also be nonsense. Similarly, a blockchain ledger will hold and maintain the integrity of whatever data is entered into the system — even if the data is nonsense.
Tracking an asset on the blockchain is simple, but the asset’s journey before it enters the blockchain is where ambiguity exists. A ledger that claims to track diamonds can only track them once they have reached the user who will enter their data into a blockchain-enabled database. However, the diamond’s journey starts at discovery — the point at which a miner finds the physical diamond and delivers it to the mine supervisor.
Tracking a Lie
In October 2011, British seafood company John West Foods announced that it would make its supply chain fully transparent. Consumers would be able to trace the origin and journey of each can of seafood using a ‘Can Tracker’ on the company’s website. Eventually, customers learned that while the website only showed tuna caught in Seychelles, Ghana and Portugal, a large portion of the tuna the company sold was from Thailand. When the scandal broke, the company claimed it was ‘simply a website limitation’. This tracking system is still up at https://www.john-west.co.uk/ (as of June 2018).
While it is not clear whether the John West Foods tracking system used the blockchain, the episode shows that supply chain tracking relies on a user inputting accurate data at the outset. A blockchain (or other) database can therefore itself be intact, but still display manipulated or fraudulent data due to incorrect inputs.
Firms in the Space
Startups in this space should think about how to capture the processes that take place before blockchain tracking begins and about how to show that data, as initially entered onto the blockchain, is correct.
Logistics is one of the biggest blockchain use cases, and Provenance and Everledger are two notable operators in this space. Provenance tracks materials and products, and stores the tracking data on a blockchain-enabled database. It is building a traceability protocol through which anyone will be able to track the origin and journey of specific items.
Everledger also uses a blockchain-enabled tracking system. While its focus thus far has been diamond tracking, it also claims to have other real-world applications.
Though both projects have well-thought-out platforms to track assets, determining the authenticity of data at the time it enters the blockchain will continue to pose a major security challenge to blockchain-enabled databases.
Even if a food item or precious stone is traced back chronologically to the point of its origin, what is to stop someone matching its origin data with a different food item or precious stone?
RFID Enabled Tracking
One answer is Radio Frequency Identification Device (RFID) tracking. An RFID system includes tags, a read/write device, and data collection and storage system. RFIDs that have their own power sources are known as active tags, and those without power sources are known as passive tags. Though the cost of an RFID tag range from 10 cents to 50 dollars, most finished smart labels cost around 15 cents. RFID tags are increasingly replacing barcode technology.
The intelligent use of RFID tags through a logistics system can come close to eliminating human tampering with supply chain information. For example: before a product leaves the area of production, it could be packed with a seal and an RFID tag embedded within its packaging, and its RFID tag could be scanned at every checkpoint in its journey. As long as the package gets to its destination with the seal intact, the data in its RFID tag could be considered authentic.
Though this solution still doesn’t solve the entire problem, it adds transparency and reduces reliance on data entry by humans (thereby minimizing the potential for malicious behavior) along an asset’s journey and upon entry into a blockchain-enabled database.
Summary
The point of entry is the point of vulnerability in most systems. Despite an item being on the blockchain, the pre-blockchain tracking information associated with that item can only be verified by the person or organization entering that data onto the blockchain. The blockchain’s users must therefore rely on the integrity of that person or organization. If organizations take a holistic view of tracking and introduce online and offline tracking mechanisms (for example, RFID tags) that reduce reliance on human data entry (to minimize malicious tampering), blockchain-enabled tracking could achieve its potential yet.
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