Blockchain technology came to prominence as the digital platform for the cryptocurrency bitcoin, but true believers think its uses will eventually be universal.
While the ins and outs of blockchain, and bitcoin for that matter, may be lost on most non-technophiles, proponents of blockchain say it will revolutionize the way and speed in which commerce is done in the future. That won’t be overnight, or maybe even next year, but MarketWatch projects that spending on blockchain technology will surge from $708 million in 2017 to more than $60 billion by 2024.
The University of Arkansas at Fayetteville is one such believer. The university opened its Blockchain Center of Excellence in May 2018 and offers seven courses in blockchain technology as part of the Information Systems Department of the Walton College of Business.
Among the companies that have representatives on the center’s advisory boards are Arkansas heavyweights Walmart of Bentonville, Tyson Foods of Springdale and J.B. Hunt Transport Services of Lowell, in addition to Microsoft and IBM.
“It is especially great for Arkansas; one of the best first-use cases of blockchain was in supply chain,” said Kathryn Carlisle, the center’s senior managing director. “It helps with supply-chain tracking, and that could be for groceries, manufacturing, pharmaceuticals. There are multiple and multiple things that have the ability to be tracked by blockchain.
“These are great enterprises that have the resources and incentives to be first players in these places. It is such a rapidly developing technology, and being on the front end to research the risks and decide the standards helps [the companies] shape the technology.”
How It Works
A brief refresher for the blockchain uninitiated: The platform acts as a digitized ledger allowing participating parties to share information to create a linked database. Blockchains can be completely public and open, but those among business-to-business networks are visible only to the members of the network.
A blockchain can help businesses, proponents say, because it is a real-time database for any information participants on the blockchain want to share with their partners. The information’s integrity is verified and any changes are time-stamped and then immediately became shareable through the network.
“It can apply to really any other set of data systems that are relying on ledgers to store information,” Carlisle said. “It is applicable to any industry dealing with information, which we know now is basically everyone.”
Data in Seconds
“We are big believers in the future of blockchain technology,” said Tanjila Islam, the CEO and founder of the global trade company TradeFlo in San Francisco. “It is going to be highly transformative technology across almost all major industries.”
Islam’s startup company is a participant in the SCALE Challenge supported by the Walton Family Foundation in Bentonville. SCALE is an acronym for Supply Chain and Logistics Enterprises, and TradeFlo is testing an apparel blockchain to facilitate trade between suppliers, distributors and retailers.
Islam said a blockchain can speed up business verifications and certifications, comparing it to a job applicant who claims a degree from the University of XYZ. A blockchain could readily assess that information — provided and verified by the university — immediately without the time-consuming process of contacting the university and waiting for confirmation.
The same process can be used for any type of compliance issue.
“In business, it is a huge liability because companies are telling their customers, ‘We’re labor compliant, we’re economically compliant, we’re socially compliant,’ but later if one of their manufacturers has false certifications, they are the ones who get into trouble,” Islam said. “When you have companies all over the world, it is harder to check and way more expensive. Once information is validated, it can’t be changed and if it is changed there is a record of the change.”
Food for Thought
Blockchain has important capabilities in the grocery industry. For consumers, a blockchain can provide information about food: where it was sourced, the employment history of the food producers, whether the ingredients are ecologically friendly and so forth.
A consumer-facing blockchain can make it easier for shoppers to access the information that is important to them. The security of a blockchain can reassure businesses that its sharing of information won’t be risky to them.
“Research shows that consumers care about all those things,” said Marla Johnson, co-founder of Blockchain Ready Studio in Little Rock. “They care especially about locally grown and they are willing to vote with their dollars. They want to feel assured about it.”
Johnson and co-founding partner Ken Hubbell are working on a consumer-facing blockchain that will complement the growing prevalence of online shopping and grocery pickup. The blockchain will be able to let consumers know an item’s standards before they pay for the product.
“When I go to Amazon or Walmart.com, I care [that] it is ethically sourced,” Johnson said. “I want to tell them my preferences and have them show me those options.”
A grocery blockchain can also be a safety issue tool. If salmonella is reported among a batch of lettuce, a blockchain can pinpoint the shipments affected and the source within 2 seconds as opposed to a week of investigation, Carlisle said.
Not for Every Situation
Although blockchain has become a business buzzword, it’s not suitable for all occasions.
Casey Kinsey, the founder of the software development company Lofty in Fayetteville, said clients come in frequently and ask for a blockchain for their company. Kinsey said most of the time, the company merely needs a traditional database.
For some small companies, Kinsey said, a blockchain can be like “killing a fly with a sledgehammer.” Kinsey said blockchain certainly has uses now and in the future — being able to trace the origins and history of a product produced globally is a good one.
“It’s a technology that is being overapplied because it has some current sexiness to it,” Kinsey said.
Experts such as Carlisle said the proven technology is there; it’s just a matter of aligning businesses with the platform. Blockchains are as worthwhile as the partnerships included in the chain: the more stakeholders involved, the better the chain.
Carlisle worked with Heifer International previously and is still a consultant with the nonprofit agency, which fights world hunger and is based in Little Rock. It has a pilot blockchain with coffee farmers in Honduras and retailers.
“Blockchains are enabling the connections between smallholder coffee farmers in Honduras to giant retailers,” Carlisle said. “It creates bigger markets for these small farmers. The technical side isn’t what is taking time. There are very important business decisions with partners. It takes time when you have a farm-to-table [chain] because you are getting every stakeholder on board. You’re including tons and tons of members within one supply chain.
“It is a very, very intensive relationship process.”