Blockchain is a team sport, according to Dale Chrystie, vice president of strategic planning for FedEx Freight. The sentiment was echoed throughout the day by business professionals at a blockchain conference held Friday (March 29) at the University of Arkansas in Fayetteville.
About 300 attendees from academia, business and government spent the day discussing blockchain applications and challenges beyond the typical headlines.
Gov. Asa Hutchinson opened the conference saying the UA is the right place for the Center for Blockchain Excellence, which opened in August with the help of $250,000 from the state and funds from private donors. He said it’s fitting because of the retail, trade and logistics industries in the region that are positioned to benefit from blockchain applications. Hutchinson said the government’s role in blockchain is still being debated, but he wants to see Arkansas leading the way in using the technology where it makes sense.
He said part of the work of government is to get the regulatory framework in place. He referenced House Bill 1944, which deals with blockchain custody and smart contracts that could benefit various industries around the state. He said if the bill is passed by the state legislature, he will sign it.
One of the industries poised to benefit from blockchain applications is in food safety. Frank Yiannas, deputy commissioner for food policy at the Food & Drug Administration (FDA), also spoke at the event. Yiannas is new to the position having spent the past 10 years as food safety chief at Walmart.
He said food safety awareness is at an all-time high with consumers and foodborne detections are outperforming prevention. He said genome sequencing is allowing for salmonella outbreaks to be more readily reported. Detecting the source of the E. Coli linked to Romaine lettuce last fall was like finding a needle in a haystack, Yiannas said.
It was traced back to a farm in central California, but in the time it took to find the source, 62 people were infected in the U.S. and Canada. He said the farm had treated the pathogen in the water previously but the pathogen somehow survived.
Yiannas said the government has a role to play in collaborating with industry on blockchain initiatives. During his tenure at Walmart, he worked with IBM to usher in a blockchain requirement for the leafy vegetable suppliers to the retail giant.
Tejas Bhatt, interim vice president of food safety & health at Walmart, was part of a large panel on the applications of blockchain. He said Walmart has had about 90% compliance with the suppliers of leaf green vegetables asked to comply with blockchain traceability in a program with IBM. Bhatt said traceability back to the farm under the current federal system is up to seven days and with blockchain that can be reduced down to seconds.
Chen Zur, a partner and U.S. blockchain practice leader at EY, spoke about the chain of custody and applications for it with any business that needs to transfer money or assets or manage them. He said blockchain can manage digital identity, complex business logic, money and assets, document authenticity and multi-party trust.
Some use cases demonstrated by Zur include detecting counterfeits in the Italian wine industry. This is end-to-end traceability for thousands of customers. It provides a direct relationship opportunity with the client and lays the foundation for deep market insights into the counterfeit market and distribution behavior.
He said one in five bottles of wine in Italy is counterfeit. Under the trial program, when a winery finishes a bottle and it goes into the supply chain, the bottle is scanned into the blockchain application and that bottle is tokenized and tracked at every stop along the supply chain, with every party in the chain having complete transparency of where it is at all times, reducing the ability to introduce counterfeits.
Zur said tracking drugs and services of veterinarian pharma for animal health can benefit from increased transparency in the supply chain by the guarantee of temperature control of vaccines throughout the entire supply chain. Other use cases that have been piloted and are in various levels of operation include consumer packaged foods companies that can benefit from smart contracts to better manage the efficiency of pricing and payments with the retailers they sell to and their own supply chains. Smart contracts can help guard against chargebacks and reconciliations.
Matt Langford, a director at drug manufacturer McKesson, said his firm deals with $500 million in chargebacks annually and is using smart contracts to enable blockchain to try and recapture those losses. The transportation and logistics industry can also benefit from the efficiencies and transparency of blockchain applications.
Zur said there are still four transitions that need to happen for the blockchain industry to mature. He said a move from private to public is necessary. He said private notarization of cryptocurrency in a separated system must move into a public, tokenized, fiat integrated system and he expects that could take anywhere from five to 10 years.