Following the path of digitalization in Slovenia and Europe: Traceability of products and other practical examples of blockchain use

Blockchain technology is a digitally distributed, decentralised public ledger that exists on a computer network and cannot be changed. In a previous article, we have analysed and explained this sentence, “What is blockchain technology that everyone is talking about?” So at least in theory, we now know what it is and how it works. Now comes the practical part, which is usually more interesting. This article will look at the traceability of products in the food industry, among other things. We will also present some innovative Slovenian companies that break new ground in blockchain technology.

According to a study by the European Parliamentary Research Service (EPRS), several practices in the food industry are compromising environmental ecosystems, wildlife, and people around the world. Issues that range from human rights abuses to illegal, unreported, and unregulated trade practices harm these ecosystems and create trade disputes.

Tracking the ethical sourcing of food in the food industry is an essential process for specific industries, such as fishery. As an integral component of the food industry, fisheries have captured a global total of 90.9 million tonnes at their peak in 2016. However, this amount is arguable. The figure may be much higher, as most of the fish caught in developing countries is by encircling nets (purse seiners) that are unrecorded as authorities encounter difficulties tracing them.

This opens an opportunity for technology, ensuring traceability by tracking the sourcing of products in the food industry. Such a system would help compliance standards and eradicate fraudulent reporting while contributing to ecosystems preservation. This is where blockchain technology comes into play.

From fishing to a plate

In a study, EPRS explained that “blockchain technology would ensure the secure flow of information by sharing a unique version of truth among all stakeholders involved; from fishermen to factories, certifiers and consumers”. It would make it possible to track the whole value chain, from compliance data to fishing and vessel type methods.

A blockchain-based system could, for example, help the tracking of tuna from fisheries to the customer’s plate, ensuring compliance with fishing quotas and providing transparency for the end-user (the final customer). Monitoring fishing quotas would also avoid ghost fishing and fish migration, thus affecting the fauna of the oceans. Due to openness, public blockchain systems could ensure the involvement of new stakeholders at the international level. At the same time, due to the nature of blockchain technology, no one could change the data, and it would be trustworthy, decentralised, and transparent.

One of such projects was a pilot programme implemented by Provenance, tracking fish quotas in Indonesia from shore to the consumer’s table. Provenance is an English term for a record of ownership of a work of art or an antique. In our case, it is a traceability record used as a guide to establishing authenticity or quality. Provenance aims to present a solution to the severe need for the safe tracking of objects or claims from the beginning of the process to the end in a reliable and decentralised form.

Provenance states on their website: “The goal (of the pilot project) was to aid robust proof of compliance to standards at origin and along the chain, prevent the “double-spend” of certificates and explore how these new technologies could form the basis for an open system for traceability powering consumer-facing transparency for food and other physical goods.” They add that the pilot was successfully implemented and that blockchain technologies in this area can provide a solution.

How do we use blockchain in practice in Slovenia?

At the international conference, European Blockchain Week (EBCW) 2021, which took place last September in BTC City in Ljubljana, Slovenia, innovative Slovenian companies, who are also breaking new ground in this field, were among those that presented themselves.

One of them was the company CryptoWater, which uses blockchain timestamps to ensure water traceability. “The project enables a more precise identification of the geographical location of the water source and the quality of this at different hydrological situations. The promising approach builds on the existing standardised labelling approaches adding information of a more precise location of the water source and its quality, ” explains CryptoWater on its website, adding:” This is important for the effective control of the water source and responsible behaviour in the river basin.”

The following innovative Slovenian project that takes advantage of blockchain technology is SunContract. This platform or energy marketplace represents a revolution in the electricity market. Its business model enables the decentralisation of the energy market. With the help of the energy marketplace, individuals can influence the price of electricity and choose the source of electricity exclusively from renewable energy sources.

The SunContract platform enables the direct connection of electricity producers with end-users. This excludes intermediaries, electricity traders, and consequently the fees they charge on the price of electricity, which leads to a reduction in the costs for all involved. This energy marketplace enables the owners of self-sufficient solar power plants to dispose of surplus energy at their discretion.

The Slovenian company OriginTrail offers a unique solution to information technology (IT) providers in supply chains. The latter enables establishing a blockchain and open data exchange in a “multi-organizational” environment. In addition, with the help of so-called Decentralized Knowledge Graphs and blockchain technology, it improves the integrity of product data and increases efficiency for stakeholders.

“We use Blockchain technology, or rather the Decentralized Knowledge Graph️, to verify, identify and add value to globally important physical and digital assets. This can be achieved and is currently used in various industries, including traditional industries such as supply chains and healthcare, and newer industries such as decentralised finance and NFTs (non-fungible tokens),” they explained to us at OriginTrail when asked what they use the blockchain for.

They also explained that blockchain technology, as a trusted network, in combination with Knowledge Graph️ technology, can be used by anyone. It is used to create meaningful connections and contacts between all types of physical and digital means, such as product data, digital property data (NFTs), etc. “Users of the Decentralized Knowledge Graph can smoothly store data on it, validate the data and search for the data that is important to them. Since the data is then being written to the blockchain, it is completely immutable and trustworthy,” they explained.

YouTube video: OriginTrail – the world’s first Decentralized Knowledge Graph https://www.youtube.com/watch?v=AsCUigu39Hw

Author: Rok Žontar

Rok Žontar is a freelance journalist writing for the World of Capital (Delo media company). He focuses on topics in the field of global economy, finance, and technology. He is particularly interested in blockchain technology, which he considers to be one of the critical technologies of the future. He is also collaborating with the Anton Korošec Institute (INAK) and the Wilfried Martens Centre for European Studies (WMCES). He is the author of several articles for a joint project of both institutes, Following the path of digitalisation in Slovenia and Europe.

Keywords: blockchain, examples, food industry, water, energy

Disclaimer

This article is part of a joint project of the Wilfried Martens Centre for European Studies and the Anton Korošec Institute (INAK), Following the path of digitalisation in Slovenia and Europe. This project receives funding from the European Parliament. 

The information and views set out in this article are those of the author and do not necessarily reflect the official opinion of the European Union institutions/Wilfried Martens Centre for European Studies/ Anton Korošec Institute. Organisations mentioned above assume no responsibility for facts or opinions expressed in this article or any subsequent use of the information contained therein.