Understanding the trade-offs in blockchain
Nothing illustrates how complex and fragile our food network is than a bacterial outbreak. Back in April, an E. coli outbreak involving romaine lettuce spread to 22 American states, leading to people being admitted to hospital and developing severe kidney failure. As a result of our complex import relationship with the United States, there were concerns in Bermuda as to whether our own lettuce could be safe.
The journey of our food from production to our table is incredibly complex in that it passes through many hands and intermediaries. In the case of contamination, it can be difficult to narrow the source of where it occurred among the many variables. Retailers often have little choice but to recall and clear their shelves of the product at tremendous cost and waste.
In response to this challenge, Walmart has turned to a blockchain-based solution. Its aim is to provide provenance, a complete history of who did what and when for some of their grocery products such as lettuce.
The company began with a two-year pilot project, which included a comparison of existing methods the company employed versus the new blockchain-based solution to trace the history and source of sliced mangos.
The result? Using traditional methods took seven days while the blockchain solution returned results in seconds. Based on those results, Walmart has announced that it is moving to embrace the technology and requires all lettuce and spinach suppliers to adopt it.
Naysayers are quick to dispute the potential of blockchain. Business-minded folk point out that these sorts of problems have readily been solved before. Why use blockchain if similar problems have been solved without it? The trouble is that software is incredibly hard to get right, especially when it comes to integrating systems from separate companies. It isn’t as simple as pointing to similar challenges solved in a separate industry that may have had a more controlled supply chain.
Just because one company may have managed to put together a solution for its business case does not mean it is readily easy and accessible for other companies to do the same. A big element is a lack of standardisation on a common platform, technology or means of sharing data. The open-source foundation upon which many blockchain solutions are built is an encouraging step towards collaboration and reduces the risk of vendor lock-in and increases the potential for interoperability.
Technologists are quick to point out that traditional, distributed databases are a more efficient technical solution. While this is true from a technical standpoint, the trouble is that they require giving a single party control over the data. This is far more daunting of a challenge than it may seem. Getting a group of people or companies to agree on something is incredibly challenging, especially who should ultimately have control over the data. So, while existing database technologies may be the most efficient technical solution, it is not necessarily the most appropriate fit for all business problem cases.
Finding a solution fit for blockchain and distributed ledger technologies is all about identifying who needs to have control over the protocol powering the software, the network that runs it as well as the data and processing that runs on top of it. It is not a simple case where either one party has complete control or no one does. Rather, it is more of a wide set of varied possible solutions where trade-offs need to be made on how much control is acceptable to balance against increased complexity and reduced efficiency.
In the case of IBM’s food trust solution, which Walmart is using to power its logistics solution, IBM provides the underlying blockchain technology to construct the network, tools to access it and who has access. However, despite controlling the underlying technology, IBM does not control the data and processing, which is controlled collectively by the suppliers themselves.
Could a similar solution be achieved without a blockchain? Sure. Although, in that case, you would need to get every supplier and intermediary to agree to allow someone such as Walmart or IBM control over the data and its processing. This is a challenge for suppliers when they may have other customers and partners they also need to satisfy. Whole Foods surely would not be happy if a supplier it shared with Walmart suddenly had all its production data controlled by Walmart or IBM. Similarly, the supplier wouldn’t want to have to support a separate software solution for each customer and partner.
The applicability of blockchain comes down to understanding what trade-offs are made in terms of who has control over what elements of the solution. On one side, you have traditional solutions that require control by a centralised trusted party. On the other, you have blockchains that are open to the public such as Bitcoin and Ethereum, where participants may be unknown and control is not only distributed in terms of the technology and network but also the governance of it.
In the middle you have solutions such as IBM’s, often referred to as “distributed ledgers” to differentiate them from public blockchain solutions, in which the participants are known, the network is private, access to it is permissioned and control is a blend based upon the requirements.
Ultimately, it is important to recognise that there is no “the blockchain” or a “one size fits all” blockchain solution. There are a myriad of blockchain solutions that exist today and likely many more to come. Each has its benefits and drawbacks, and it comes down to determining which trade-offs are acceptable versus which are not to find the right solution fit for the business scenario.
When someone says “blockchain”, recognise that it could mean any of a wide variety of scenarios between open public networks that anyone can access, closed private ones that require permission, and blends in between.
• Denis Pitcher is a software and technology solutions consultant with an interest in exploring the potential of blockchain and distributed-ledger technologies. He is also tech co-founder and chief architect of resQwest.com, a global tourism technology solutions provider. He can be reached at email@example.com