Payments

Tuna, pork, and diamonds: Putting physical objects on a blockchain

  • There are many cases in which knowing exactly where a product came from matters. A lot.
  • So far, we've seen tuna, pork, and diamonds on the blockchain.
close

Email a Friend

Blockchain technology offers many opportunities that are now being tested by institutions around the world. One of the least intuitive of them is putting physical objects on a blockchain. So far, we’ve seen tuna on a blockchain, pork on a blockchain and also diamonds on the blockchain.

Dismissed by some people as a PR stunt and part of the overall blockchain hype, tracking physical objects on a blockchain platform is not all that crazy. It all boils down to better supply chain management.

When it comes to food products and certain goods, knowing exactly were they came from is very important. Being certain that your bacon comes from a reputable farm in China and not some shady operation is a public health issue. Knowing that the palm oil for your morning bulletproof coffee came from a plantation that did not destroy orangutan habitats will alleviate your hipster conscience while giving you a needed boost. Blood diamonds are another good example of a product where knowing exactly where it came from matters. A lot.

Blockchain technology’s feature of being immutable ensures that one can track ownership all the way to the beginning.

In the case of tuna, participating fishermen in Indonesia sent a text message after catching a new batch to register it, thus issuing a new asset on the blockchain. Accompanied by permanent IDs, the assets were then transferred from fisherman to a supplier along with the catch, in both physical transactions and in the digital register on the blockchain. At this point, the items originally owned by the fishermen become linked to the suppliers. The identities of the fishermen are saved forever in the list of previous owners held on the blockchain.

There are many difficulties in making this work. The economic incentives for transparency and accuracy should be substantial enough to mitigate fraud at each step. It’s pretty easy for suppliers to mix batches, while keeping the original tags on the crate. Better accuracy would require more hardware, such as IoT devices, to be supplied to manufacturers or more work on their part, which would be a huge barrier to adoption.

This, perhaps, is blockchain technology’s Achilles’ heel when it comes to mainstream applications: It’s an all or nothing game. In order for an application to truly succeed, all parties must agree to use it. There are precedents to this, such as the SWIFT system for interbank money transfers, but they aren’t easily achieved.

 

0 comments on “Tuna, pork, and diamonds: Putting physical objects on a blockchain”

Payments

Square’s Cash App continues to scale the bitcoin hype wall

  • Bitcoin prices are up over 100% year to date.
  • Square's Cash App is riding those prices higher as it sees record bitcoin revenues.
Zoe Murphy | November 10, 2020
Member Exclusive, Payments

PayPal’s new plans focus on owning more of the ecommerce transaction

  • PayPal has massively grown its payment volume, but not its engagement metrics.
  • PayPal's recent earnings call show a company with expansive plans for its digital wallet.
Zoe Murphy | November 04, 2020
Payments

‘The nice thing about our model is everyone wins’: Plastiq allows consumers to use credit cards at businesses that don’t accept them

  • Digital payments are good options for everyday-type transactions.
  • Many merchants still don't accept credit cards because they don't need to.
Michael Deleon | October 26, 2020
Payments

Inside the Techstars and Western Union Accelerator

  • As a 170 year old company, Western Union looks outside for innovation in addition to its own product development.
  • The company recently named its 2020 class of fintech startups to the Techstars and Western Union Accelerator.
Zoe Murphy | October 22, 2020
Payments

PPRO’s Steve Villegas on how COVID is impacting local payment behavior

  • PPRO has a lot of experience working with local and cross border payment options.
  • The firm's vp of payment partnerships in North America joins us on the podcast to talk payments.
Zachary Miller | October 13, 2020
More Articles