summary

With the rise of supply chains, many massive corporations have attempted to incorporate blockchains into their own business models. One example of this is Wal-Mart, which has decided to use a supply chain for provenance. Provenance is securing the traceability of specific objects by tracking their history. This provenance is done through a blockchain, where products are traced through the companies they interact with, whether they are growers, distributors, or retailers. Along each stop of the way, those who are handling the products will be required to create a transaction on the blockchain and sign them. With this technology, rather than recalling all potentially affected products when a subset of these products is contaminated, Wal-Mart can use this supply chain to track where this illness came from and only remove the products that came from the same source, thus saving a lot of money, resources, and time. Another massive corporation that has attempted to integrate supply chain is Alibaba, the Chinese e-commerce conglomerate. Noticing that China has had an issue with counterfeit goods for decades, Alibaba, among other e-commerce corporations, have decided to mitigate this issue through the use of QR codes and RFID. By tracking goods such as food, baby products, liquor, and luxury items, the likelihood of being fooled by counterfeit goods is decreased, while consumers are given more trust that their products are real. Despite this, there is still plenty of skepticism against using blockchain technology for provenance. For example, many say that using blockchain serves no better than simply using a centralized database, as the decentralized nature does not give any beneficial advantage over a normal database. Currently, Wal-Mart’s blockchain information is all stored on IBM’s servers, which essentially defeats the purpose of a decentralized system if all of the data is kept under a single central authority. Another problem with supply chains includes the difficulty of tying physical objects to the digital world. For example, each bag of lettuce could be given a unique identification code printed on the bag itself, but that can be easily forged or changed at any stage of its life. Walmart could use RFID tags on each of the bags of lettuce, but the cost of this would far outweigh the potential gain, making it an unreasonable solution. Supply chains are unable to protect against many issues such as fraud that can only be detected by human inspectors. So while a blockchain would allow us to trust the information channel, the endpoints which input data to the blockchain are still fallible. This endpoint verification problem, or, more informally, ‘garbage in, garbage out’, is one of largest barriers to large scale blockchain adoption today.