The reason we started our Open Food Chain adventure is that we recognised key blockers for the Agrifood industry to adopt blockchain technology. Having these blockers solved, turned out to be our success factor.
The first one is to have industry-owned public blockchains, the second is to have a low and predictable cost structure. The third is to enable easy self-onboardings and last but not least to be interoperable by design.
Industry owned public blockchains
The power of blockchain was defined by Bitcoin and lies in the fact that no single entity ‘owns’ the network. There is no centralised control, it is a shared effort and a delicate but robust balance between stakeholders. Being developers, miners, merchants and users. The idea of private blockchains took away this power, leaving you with expensive IT that will disappoint on the aspect of decentralisation. As OFC develops open source and creates a public blockchain per industry, the technical basis is there to have a shared effort on blockchain for each industry. OFC helps in setting up industry foundations in which industry partners are lined up to collaborate to make their blockchain an industry effort with true shared ‘ownership’. What really helps is that OFC has excellent credibility and strong networks in agrifood, as is visible by the OFC board members.
Low and predictable cost structure
One of the bigger barriers to adopting public blockchain is the mandatory transaction costs. We’ve seen many supply chains that handle volumes that cannot move beyond a pilot because the costs are increasing with volume. The rule on public blockchains is that more network congestion results in higher fees per transaction. OFC is intentionally developed to work with no gas fees (mandatory blockchain processing fees) and with zero transaction costs. We’ve implemented spam protection in a different way to secure our industry chains from congestion. Participants run blockchain nodes decentralising and securing OFC. The operational costs to run these nodes are minimal as they are lightweight and are not volume related.
Easy self onboardings
Farm-friendly and inclusive: our technology allows for mobile apps and all farm management systems to directly interact with OFC. An interface for farmers without a digital data system will be created, linking all individual farmers into the supply chain. Farmers are critical in our food system and have the most valuable data on soils and crops. Hence, it is mission-critical to enable farmers to own, upload and earn from data. We developed something that we call autonomous onboarding, so any party – including smallholders – can connect to OFC.
Interoperable by design
Interoperability is the first principle in our design. We are interoperable with other blockchain platforms, wallets, data and token exchanges and with Agrifood systems. You can read more on this topic in a previous blog item [https://thenewfork.com/our-open-food-chains-are-interoperable/].
But it is not only about blockchain interoperability, we also need to be interoperable with the IT within the Agrifood organisations. The food industry is notoriously slow to adopt new technology and on top of that the bigger players are also slow in adapting their workflows. That is why OFC ties into existing (centuries-old) workflows and common standards like GS1. We use their standard reporting tools to process their reports into useful information on the blockchain network. This happens in full trust on their own nodes. As we have a customisable transposing tool on their node, it always fits.