Blockchain, or distributed ledger technology (DLT), is a distributed environment that combines different well-known technologies (such as hash functions, asymmetric cryptography, digital signatures peer-to-peer networking) to store any type of data in a distributed fashion among its participants. The data is organized in transactions that are embedded into blocks. The DLT encodes the rules that nodes must obey in order to participate in the network and create transactions that can be accepted into the blockchain ledger. The ledger acts as a shared record of trust agreed upon by all participants.
A blockchain environment is called public if anyone can freely join its network as a node. Otherwise, if only authenticated nodes are allowed to become part of the network, then the blockchain is called permissioned. While public blockchains are still important and valuable options for certain use-cases, we believe that permissioned DLT systems are in general more suited to business applications, especially where some level of confidentiality or secrecy of the transactions –or the transactions’ details– occurring in the system, must be ensured among participants.
Changing the status quo in order to redesign the entire value chain to make it more transparent, efficient and more inclusive is a collaborative process that requires the effort of all the players involved in the supply chain and this won’t happen overnight. However, we believe that this is a necessary step in order to ensure the sustainability of the coffee industry in the long term. Enabling end-to-end traceability and full transparency into the whole coffee supply chain is key for a number of reasons.
First, end-to-end traceability guarantees provenance and enables users to gain a clear view on how long the coffee has been travelling. In the case of coffee, we tend to think that freshly roasted coffee is important; however, roasting a freshly harvested coffee is even more important. Secondly, being fully transparent about the quality and origin of the coffee enables to build trust into the coffee chain, and gain consumer confidence. Furthermore, full transparency is essential to ensure that growers are paid fairly for their crops and helps to ensure conformity to standards at origin and throughout the chain.
Full transparency translates into full accountability for every player of the chain, reducing waste and mitigating the possibility of food fraud. Finally, the combination of verified provenance with complete end-to-end traceability and transparency enables inclusive business models, in which coffee growers can be rewarded for the quality of their work, enabling them to break free from the speculative pricing of commodity markets, on which they have otherwise no control.