There is no fake Darjeeling Tea on the Blockchain-
How Private Blockchain despite constraints can help farming and handicrafts makers.
It is well established that interesting things happen when divergent views collide. Similarly very exciting outcomes can emerge when technology developed in one domain ends up being deployed in completely divergent areas. Blockchain and Distributed Ledger Technologies could be the latest such innovation to find uses far beyond and divorced from their original purpose.
When discussing Blockchain most people think of Bitcoin or other crypto currencies. In what is a fast evolving new domain, the exploration of where this technology might reach and what disruptions it may cause is still relatively nascent. One such area where these technologies can have significant impact is in realizing value for small scale producers of provenance rich products. Small scale tea planters, food manufacturers, weavers, handlooms etc. that create exciting products rich in cultural history or have local environmental advantages could benefit from deploying Blockchain technologies. Often such products reach urban markets through so many hoops and links that very little of the proceeds of their sale makes it back to the producers.
This seems on the surface to be a simple fact of intermediaries and middle-men’s margins. While that is a part of the challenge, there are several subtler and often more troubling facets to this supply chain problem. One’s that may not be immediately obvious. To address the market access challenge, the Internet does now provide the tools such as a web-shop and a social media channel to the makers who with a little help handling logistics and accounting to facilitate e-commerce can sell directly to consumers. With this one can succeed in dis-intermediating the selling process to an extent and create price discovery and a route to market. However, there are still deeper challenges to confront in making the supply chain durable and accountable to consumers and producers.
One key issue is the preponderance of fakes and machine made duplicates that are sold on high streets around the world. This is particularly damaging to provenance rich products such as fine wines, gourmet teas, high grade woolens and hand made products. One of the most satisfying aspects of buying such products is their quality but also the knowledge that they reflect the traditions of a remote hard working community and are unique. The cultural tradition and history that is woven into these products is surely one reason why people buy them. Having a machine made duplicate sold to the buyer claiming the title or provenance of a product both corrupts the actual sale and diminishes the quality and reputation of the original makers.
With the emergence of Blockchain Technology and Distributed Ledger Technologies in general, there are now means available to authenticate produce at relatively low costs and to secure the path of the products to the end consumer. Handmade goods and seasonal products earn the deserved rewards for the makers by being limited in supply and thereby allowing a price in the market that adequately reflects the correct demand supply dynamic. Fakes and duplicates corrupt these market forces. Large, well funded companies use copyright laws and branding to ensure their labours aren’t squandered through imitation products, small producers however do not have resources to control their IP in the same manner.
Blockchain technology as we know creates a time stamped ledger of transactions on a linked set of data blocks. These stored transactions could be a wide variety of digital contracts and not merely currency transactions.
These blocks are stored on a vast number of participating computers to remove centralization and single point of failure risk in a public Blockchain like Bitcoin. However, where centralization is not the primary challenge from a data control perspective but rather from a control of supply of goods into the market point of view, even Private Blockchain architecture can be a powerful resource.
Given that Blockchain creates an incorruptible chain of contracts that are auditable and end to end verifiable, the architecture provides to the producers the immutable means to track the entire supply chain of a product down to the end consumer. Blockchain has grown in different ways over the past few years, with competing architectures attempted. While the original Public Blockchain architecture developed for Bitcoin remains in some ways the purest, in being decentralized in most of its aspects, it too has limitations such as challenges to its scalability and perhaps most significantly the risk of a 51% attack resulting from collusion among the miners which some argue has become a distinct possibility. There are other architectures such as private Blockchain architecture which while being arguably less decentralized; as a small group tends to control mining or even the ideation around its architecture, can offer some unique uses.
One such very exciting use of a Private Blockchain architecture could be in protecting the communities of craftswomen and men producing these traditional products such as Pashmina shawls, Darjeeling teas, wine from Epernay, Cigars from Cuba, Silk from Benares from losing their unique identity and being able to control how their produce is sold. There are several cheap knock-offs and machine made imitations of these products that fill the shops and bazaars from Mumbai to Lon-Angeles and every thing in between. You could be offered a Pashmina shawl at a street market in London for instance at as little as 3 Pound Sterling for example. This is an impossibly low price as anyone who knows anything about Pashmina will testify. How does the real craftsman however protect their Intellectual property from being misused in such instances?
By creating a Private Blockchain infrastructure run by the producer community themselves at relatively low cost, through a proof of stake mechanism at the inception layer of the Blockchain, one can ensure that only produce from the original makers can be authenticated as being the real produce. So a rip off may be labeled pashmina but it will not be able to produce the easily verifiable private key signature of the authentic product only licensed to real sellers of real pashmina. A customer interested in the real thing could verify the truth from the many falsehoods using the public key verification on their mobile phones while buying the product.
Branding in such an instance becomes less important in establishing provenance and authenticity especially for community-based products where the title-ownership is not held by one individual. Such streamlining applications of blockchain are just around the corner. Supply chain is indeed one of the main areas where Private Blockchain architecture is being deployed most.
It is time for the smaller producers to take control of the destiny of their products and explore the exciting new world of Blockchain.
For more details on the suggested protocol for such products, contact the author Anuj Kapoor @ firstname.lastname@example.org