Australia's grain industry will soon reap the benefits of the blockchain technology. Two recently completed pilots illustrate how blockchain can: (a) certify provenance of grains and (b) eliminate the risk of fraud and duplication of transactions; two issues that have been identified as key concerns for the industry.
Imagine this scenario, farmer A agrees to sell a quantity of grain to buyer B. At the point that the transaction is concluded a "digital title" to the grains is created and this is stored in the farmer's digital wallet. Upon settlement of the payment due from the buyer to the farmer, the digital title is transferred to the buyer and the payment is made to the buyer. The payment is processed instantaneously, whilst blockchain technology ensures that the same quantity of grain cannot be sold to another buyer (giving certainty to the transacting parties). The second pilot allowed participants to track the origins of organic oats, ensuring that their valuable organic status was safeguarded across the supply chain.
As we have highlighted in earlier posts, the energy industry would greatly benefit from similar applications. In a world where consumers are "demanding" clean energy electricity, the provenance of each MWh produced is becoming increasingly important. The creation of digital titles also has the potentially to fast-track transactions and actively encourage peer-to-peer trading (initially at the micro-grid scale and progressively moving to a larger scale).
Commodity supply chains, with the inherent risk of duplication of stocks and financing, counterfeiting, corruption and unfair trade is viewed as one of the areas for blockchain to take early root. It can also bring efficiency to an industry which often works in archaic fashion. “Using consensus mechanisms such as Raft, with 50 millisecond block times, means payments can be processed in real-time, a significant improvement to the delay experienced with traditional banking transfers,” Weston says.