Sam Kelly – Head of Research & Development

Knowledge of origin

In a previous post, I discussed the importance of knowing the origin of our goods. From clothing to food it matters. By giving a trusted stamp of authenticity, not only can we be sure we are buying what we believe to be buying, but health risks can also be averted. In the world of high fashion, consumers can be sure that their luxury clothing item is actually made from the best materials. Whereas for those purchasing food from supermarkets, a blockchain based supply chain makes it possible to ensure food items have been responsibly sourced and contain the ingredients they claim to contain. But there is another aspect that I have yet to discuss, one that has a tremendous humanitarian element.

Responsibly Sourced

Across the world people have different views on what is acceptable commerce. But few people can argue that certain items should not appear in a fair market. Ivory, shark fins, rhino horns and many other items that typically require killing endangered animals are rightly no longer acceptable for trade. Other goods such as diamonds or rare earth metals are often sourced using slave or child labour, again something that consumers and businesses wish to avoid. Many people now recognise there is no place for prolonging the suffering of those in less fortunate situations. The transparency that can be achieved using blockchain technology can help to mitigate hardship faced in those countries that are often exploited.

Despite all this, the fact remains that there are a significant minority of people willing to exploit both humans and animals in the quest to become extraordinarily rich. As it stands it can be quite difficult to prevent those wishing to act inhumanely, as the products that they’re sourcing can’t easily be traced. The situation with food is such that, if we can track its origin, then we can more easily contain disease and infection as well as be sure that the goods have come from fair-trade locations. Improved traceability within a supply chain goes further still and can be used to ensure equity across less economically developed nations. Two use cases that set a president for how companies should strive to behave have come to light recently. These type of stories can reinstate faith in large conglomerates. It is no coincidence that both cases rely heavily on the powers of blockchain.

Carefully obtained Cobalt

Volvo are the first car manufacturer to use blockchain to enhance the traceability of the metallic element cobalt for use in its batteries. Volvo say that data in the blockchain includes the cobalt’s origin, its dimensions, the chain of possession and information establishing that participants’ behaviour is consistent with the Organization for Economic Cooperation and Development (OECD) guidelines (the OECD is an organisation working with more than a hundred member and non-member states promoting sustainable economic growth). Crucially for business and for humanity, any sourced materials should promote growth in the country of origin and fairly remunerate the workers extracting them. Volvo are arguably the car manufacturer with greatest forethought when it comes to a sustainable supply chain.

Diamonds are forever

Much like Volvo’s ambition to achieve a sustainable, healthy supply chain, IBM have developed TrustChain in an attempt to improve the sourcing and tracing of diamonds and precious stones. The perils of the diamond industry have been well documented, while fake diamonds and gems have long been the bane of many jewellers. In addition, blood diamonds (or conflict diamonds) have been problematic in exacerbating suffering in many developing nations. Once again a blockchain based supply chain will permit tracking of the gems from their origin, making it more difficult for inhumanely sourced or even fake diamonds to appear in the market. In addition TrustChain has been developed on the one of the largest permissioned blockchains, Hyperledger Fabric, the same blockchain that that is facilitating initial building of The Proof of Trust protocol.

Trust is paramount

As discussed in my previous blog post, Knowledge of Origin, all this traceability afforded through the use of blockchain is fantastic, but alone it is still fraught with danger. The fact that items are traceable doesn’t guarantee misleading or incorrect information is automatically eliminated from the supply chain. If there are questions over the alleged quality of the precious gems or the cobalt being sourced, then there is no existing mechanism to resolve these disputes efficiently. With all supply chain solutions, the data contained within the blockchain must be trusted by all parties before this technology can be universally adopted. The Proof of Trust protocol provides the answer to the issue of dispute resolution as well as ensuring that data is reliable and accurate. Further enhancing the sustainability of supply chains and aiding in the growth of developing nations.

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