CALF_News_Feb_March_2019

18 CALF News • February | March 2019 • www.calfnews.net B eef consumers both domestic and international now demand greater transparency for the meat they purchase for qual- ity, safety and societal reasons. The increased value for producers who can meet that need continues to grow. Traditional supply-chain technologies have failed to meet that demand and need a major transformation. Block- chain technology has entered the U.S. beef market, intending to provide that dramatic change. It will arm the beef industry with the tools needed to give the consumer, retailer and regulator new levels of trust, transparency and assur- ance of meat quality and food safety. Right now about half of consum- ers use the traditional criteria for beef purchases – price, taste and conve- nience. The other half increasingly place importance on evolving social drivers such as ethical production, the environ- ment, animal wellness and food safety. This dietary transition only increases as the media pushes its agenda against the cattle industry, and younger consumers come into the market. In order to win these consumers over, the industry has to provide transpar- ency about animal welfare standards, rearing systems, and animal disease and medication histories. Blockchain does that using a technology that the digital generation can understand and trust. What is Blockchain? Blockchain creates a distributed ledger that records transactions, when they occurred, verifies their authenticity, and then uses encryption to make them unchangeable and encrypted hashes to string them together in sequence. Each “block” consists of an index, a timestamp, a list of the transactions or data entries, proof to validate the block and the hash of the previous block. A hash chains them together and plays an important security function. It provides the encryption for the block and binds the blocks into a sequential chain. The strength of the hash lies in the fact that a hacker cannot calculate the input from the output. If a block is compromised, all subsequent blocks will have incorrect hashes, making discovery easy. The blockchain operates on a decen- tralized network composed of trusted and certified members known as a peer- to-peer network. Validation of transac- tions occurs by consensus of a specific number of peers on the network. No one person owns or controls the ledger; it is distributed throughout the network. By adding script to a block, program- mers can produce smart contracts. These digital contracts self-execute when parties meet contract conditions. They do this by using an “If-This-Then-That” function, which allows members of the network to financially transact with each other directly rather than using tradi- tional intermediaries. Smart contracts hold the promise of shortening time-to- market, increasing international trade, speeding decision making, and making rapid payment the norm since smart contracts automatically execute pay- ments when contract conditions are met. Blockchain works in conjunction with existing management tools so internal systems that work don’t need replacing. An Application Programming Interface (API) connects them to blockchain with blockchain residing atop them. For example, a calf is tagged and monitored and tracked with an EID tag and reader. The producer captures the information and transfers it to a smartphone and then sends it to the blockchain. Documents pertaining to the animal, such as medical records, are scanned Blockchain Cattle Hit the Market in 2019 Where From Here? By David F. Crosby Contributing Editor