Blockchain and farmers

If you’ve been hearing about blockchain but don’t quite understand what exactly it is and how it could affect people’s lives, worry not—you’d be among the 99 percent of us in the same boat. I had to do a bit of research to write this article, which I felt useful given the looming importance of the technology and how it’s poised to overturn much of how things are being done in various areas of our lives.

I’ve written on how the Fourth Industrial Revolution is disrupting traditional ways of doing business. Most recently I wrote on the “Internet of Things” and its importance in planning our future. Today, let’s turn to blockchain.

Most of us may think that blockchain is the same as bitcoin, the best known of the cryptocurrencies that have taken the financial markets by storm. Blockchain is the technology behind bitcoin and the various cryptocurrencies on the scene, but I’m more interested in its applications far beyond cryptocurrencies, in areas that can help improve the lives of everyone, producers and consumers alike.

But first things first: What is (a) blockchain? It is a continuously growing list of time-stamped records (“blocks”), linked and secured via encryption, where each block contains an encrypted record of the previous block, along with data on the transactions that created the new block. Imagine a document—a record of accounts—that is shared across thousands of computers in a network, where the record is constantly
updated with every new transaction.

Once recorded, the data in any given block cannot be altered retroactively without altering all subsequent blocks. Thus, any alteration would require that all members of the network agree to the change, implying next-to-impossible collusion on a massive scale. All records are thus virtually permanent and incorruptible.

As such, blockchain is the ultimate in transparency. It also eliminates the need for an intermediary between transacting parties, like a bank to consummate a payment transaction, or a lawyer to seal a contract. With blockchain technology, a buyer can deal directly with a seller online without having to go through Amazon, Alibaba or Lazada, and a rider can deal directly with a driver without going through Uber or Grab.

As each player’s track record is accessible from the blockchain, one doesn’t need an Uber or Lazada to compile data on the reliability and past behavior of the transactors. If ride-sharing apps and e-commerce platforms had disrupted the taxi and retail industries, blockchain is about to disrupt the erstwhile disruptors! It’s the age of disruption indeed.

Beyond bitcoin and cryptocurrencies, in what other areas can blockchain potentially help? Out of so many possibilities, I’ll focus on applications in a sector critical to our economy, agriculture—the sector where most of the Filipino poor are. It is where primary producers, the farmers, are known to reap the least share of the fruits of their labor. This is largely because they are far removed from their products’ final consumers, insulated by layers of supply chain actors. They also have the least access, if at all, to information on the market, and much of the inequity in the economy stems from such lopsided access to information.

Now imagine if farmers (and all players in the value chains) can access all information on transactions that happen to their products all the way from field to fork, so to speak, via blockchains. Exploitative market practices that leave farmers with the short end of the stick would be curbed.

Agriculture is also a sector where products on the market come from large numbers of producers, with consumers largely unaware of the quality and safety of the products they buy. Was the fruit or vegetable sprayed with toxic pesticides? Did the meat come from a diseased animal? Is a food product labeled “organic” or “Halal” strictly grown according to those standards? With blockchains in agriculture, all that could be readily answered.

We’ve barely scratched the surface on how blockchain can change our lives. I don’t believe it to be an exaggeration when people say that blockchain will be as earthshaking as the internet itself. And it’s not just about bitcoin.

cielito.habito@gmail.com

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