Two major topics in food are food security and food safety. Food security is about you having food in the first place. Food safety is about you not falling ill from it. Web3 is known to enhance food safety but it is not much known for its impact on food security. I am keen to change that and enhance the understanding of the value of web3 for food security. I’ll explain what is important to know about web3 and why public agencies should kick-start web3 food security programs.
What you need to know about web3
Web3 refers to the internet with decentralisation, blockchain technologies and token-based economics. It is considered the 3rd big enhancement of the internet, hence web3.
When talking about food, the distinction between public and private blockchains is important. Public blockchains are based on a distributed network of actors, using complex protocols and cryptography to secure the registration of a transaction on the distributed ledger. Everybody can join the network. Private blockchains are relying on a consortium of stakeholders among which the ledger is distributed, and trusting a third party to manage their blockchain. Joining a private network is on invite only and hence less decentralised than a public blockchain.
When it concerns food security, data immutability is core. Data on public blockchains are immutable. In private blockchain solutions, this is not necessarily the case. Parties have the possibility to, alone or jointly, retroactively change data in the blockchain. If an error occurs in an open public blockchain, that error cannot be removed. Instead an additional transaction, correcting the error, can be added to the blockchain, giving more credibility to the data and data-monitoring in the network.
There are benefits and disadvantages to both public and private blockchains. There is no blockchain system that solves all problems. Most blockchain solutions have been created to solve specific issues. Most blockchain solutions in agrifood are private blockchains. While these systems can be helpful, they do limit decentralisation and interoperability, and its impact on food security as a result of that.
For understanding the potential of web3 for food security, it is also good to know a bit more about tokens and ‘tokenomics’. Token-based economics refers to the potential of using a token in a network. There is a difference between crypto’s and tokens, although both are blockchain-based digital assets. The biggest difference is that cryptocurrencies have their own blockchains, whereas tokens are built on existing blockchains. There are about 10 types of tokens. We have for example the non-fungible tokens (NFT), famous for apes and art, the stable coins, or for example less-known utility tokens. Tokenomics can be very powerful for food security.
Web3 and food safety
There is plenty of proof that web3 contributes to food safety, scientific and nonscientific The use of blockchain for food safety is therefore enforced by governments in the US, Kenya, Spain and for example the EU.
Web3 and food security
For food security, the evidence that web3 is important is more scarce, as stated by the FAO. The key reason for that is a technical one, most applications in agrifood are private or semi-private, limiting participation, scalability and interoperability, limiting the impact on food security. We explain here that the solution is not a technical one, but one of governance. Food security can and should be smartened with new web3 governance models that enhance decentralisation, scalability and interoperability.
We at Open Food Chain like to make a strong case for public open blockchain solutions in the agrifood sector as the potential impact on food security (and safety) is massive. Few private blockchain solutions, like the Maersk & IBM collaboration, have shown scale in the past years. As much as 75% of the Forrester EY decision makers survey said they were likely to use public blockchain in the future.
The main advantages we see in open public blockchain solutions are decentralised governance, scalability and interoperability. Hence, a very powerful technology for agrifood supply chains that cross many borders, have numerous actors and countless different data systems with poor interoperability (exchange of data) between them. Let me explain three characteristics.
In an open public blockchain solution nobody owns the blockchain and can take decisions on their own, or behind the scenes. This level of transparency helps a food security agenda. A public blockchain is governed by a process of rules that are agreed upon by all parties joining the network. For strong adoption, you also want a maximum level of decentralisation so that entities can join on their own account, without having to wait for permission. Food security requires a decentralised data infrastructure, a core element of web3.
Food security requires scalable data infrastructures. Although private blockchains were more scalable in the past, scalability has improved across the board with many lightweight setups. Today, a core limit to scale is pricing. Transaction costs, or so-called gas fees, limit the scalability of blockchains and many pilots have come to a hold because of that. Food security needs an infrastructure that has no transaction fees and supports large scale tracking. In Open Food Chain we designed an architecture that has no transaction costs.
Open public blockchain solutions have better data interoperability than private blockchains, this helps food security. Interoperability is key for tracking across different production lines and multi-ingredients. Most agrifood blockchain solutions track just one product across one supply chain, from farm level to fork, for example from orange to bottled orange juice. However, it’s not hard to imagine a future where complex products, consisting of multiple ingredients, have to combine multiple solutions. Think of bread made of grains, palm oil and eggs. It would be convenient if the blockchain solutions tracking each ingredient can exchange information.
Web3 allows for the execution of business processes on the internet. Food security concerns can benefit greatly from that as long as there is a public blockchain infrastructure that is decentralised, scalable and interoperable. Open Food Chain has all these components. We seek government agencies that are keen to explore the benefits of web3 for food security.