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Blockchain for Equitable and Sustainable Agriculture

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  • Blockchain for Equitable and Sustainable Agriculture

    This article provides a brief, easy to understand, non-technical explanation of Blockchain technology and its features, including those that have given it the reputation of being “disruptive”.

    Blockchain Technology

    Blockchain has been called the “internet of value” (FAO and ITU, 2019) and is, in the simplest terms, a digital, distributed “ledger of assets and transactions” (Hammerich, 2018), with “mechanisms for processing, validating and authorizing transactions” linked with anything that is considered to have ‘value’ (FAO and ITU, 2019; Kochupillai, 2019a). While being a complex technology, it is largely a combination of several existing and well-known mechanisms. In particular, it is a combination, inter alia, of methods for implementing software systems (especially de-centralized, distributed, and peer to peer systems) in a way that maintains their integrity, transparency and immutability; a method of data storage and transmission; and a programmable platform that permits new applications (distributed applications or dApps, and smart contracts) to be built upon it (Drescher 2017, pp. 6-7, 24; Finck 2019, p. 8).

    For non-technical audiences, it is quite easy to conceptually understand the possibilities offered by blockchain, without needing to fully understand its technical inner functioning. This is attempted herein below.

    Understanding Blockchain: Its Unique Features

    Blockchain, or the more generic Distributed Ledger Technologies (DLT), are best understood by remembering how we keep accounts and what the common problems in single copy or centralized accounting systems are. Let’s say that Mary is keeping a record of how much money she has loaned to Rama, Josef and Mira. Her accounting book also records the date and time on which each or any of them returns the money or borrows more money. In a situation where Mary is the only one entitled to keep a record of the transaction history, there is an inevitable need for Rama, Josef and Mira to trust Mary and her accounting system completely. Mary, in turn, must not only act in complete good faith at all times, but must also be certain that her single and only copy of all accounts is up to date and not tampered with by anyone (including Rama, Josef and Mira). In case of errors, whether resulting from deliberate entering of false transactions or simple human or technical mistakes, there is no other copy of the accounts one can turn to, to check where and how the mistake/error occurred. Here, therefore, we identify some of the most common problems linked with centralized accounting systems:
    • the need to rely on (trust) one central agency that has all the power and infrastructure to keep records;
    • the lack of traceability, transparency and decentralization that can help identify mistakes and/or evidence of tampering or corruption (lack of trust in the system);
    • the need to rely on (trust) the services of an intermediary (in our example, Mary and her record) to confirm the state of one’s accounts and to make additional transactions; and
    • even in cases of multiple copies of transaction histories, there is the lack of a means of checking (periodically or regularly), whether all copies are true, identical and up to date (lack of trust in veracity of data). In sum and substance, therefore, almost all problems linked to centralized record keeping can be summarized as problems associated with trust, or the lack of it.
    Now, imagine that instead of having just one copy of the accounting book, centrally managed by Mary, we create a digital system where each individual in our example system, namely, Mary, Rama, Josef and Mira, have complete copies of the entire money transfer and return (transaction) history. Add to this, the possibility of regular checks to ensure that each transaction entered in any copy of the accounting book can be traced to its source and independently verified by predetermined (based on mutual consent of participants) methods before it is entered in other

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