What Happened to Blockchain?

Is this buzzy technology still impacting agriculture?

By Joli A. Hohenstein

Wondering if blockchain has gone by the way of VCRs and Betamax? Just because you aren’t hearing about blockchain doesn’t mean it has gone away, or that it’s any less viable as a game changer for agriculture and the global food supply chain.

Quite the opposite, says Robert Brunner, Associate Dean for Innovation & Chief Disruption Officer and Professor at the University of Illinois Gies College of Business. “To be blunt, the reason you’re not hearing about blockchain as much is that AI has sucked the oxygen out of the room.”

Machine learning and generative AI have become the tech darlings for 2023 and into 2024. Mainstream media and social media alike are dominated by these futuristic technologies, which means every company feels it must say it’s using AI to stay relevant.

But does AI mean blockchain went away? Why has blockchain reporting gone seemingly dark? The short answer: crypto cycles. Shortly after the last Field & Bean article on blockchain in mid-2022, cryp - to began sliding into a bear market. Now, as we get further into 2024, experts say crypto is entering a bull market.

That’s classic for the crypto cycles experts are starting to recognize, says Brunner. They happen roughly every four years and are characterized by great interest, then suddenly little interest. “The technology is so new that people don’t clearly know why the cycles happen,” he explains. “But Bitcoin halves every four years, and it’s believed to tie to that.”

Every four years, Bitcoin halves the amount of Bitcoin earned by “miners,” the companies or people who validate new information on the blockchain and create new Bitcoin. Typically, the price of Bitcoin rises after that.

“Even though people aren’t paying attention to blockchain right now, there are still lots of developments in that space,” says Brunner.

The U.S. Securities and Exchange Commission (SEC) recently approved the first U.S.-listed exchange traded funds (ETFs) to track Bitcoin. A significant milestone, the decision means you can now trade Bitcoin like any other investment.

Since Bitcoin drives the rest of the cryptocurrency market, that’s a definite driver. “There will be more and more interest in cryptocurrencies and technology that powers the blockchain,” says Brunner. “We’ve already seen interest in optimizing supply chains, tracking and tracing food, verifying genetically modified varieties and identifying pesticide use.”

ISA Director of Market Development Todd Main agrees. “The biggest thing for agriculture is point of origin tracking all the way through the supply chain,” he says. “That’s valuable in food, in pharmaceuticals. When consumers really start to demand it, that’s when we’ll see the development ramp up.”

In the post-Covid era, we’ve already seen an influx of major players beta testing blockchain. Nestle announced a Rainforest Alliance-certified blend of coffee beans from three origins, saying consumers would be able to trace the coffee to its origin of Brazil, Colombia and Rwanda.

And Bayer worked with BlockApps to launch TraceHarvest Network, the first blockchain solution of its kind to track and trace the full lifecycle of agricultural products starting at the seed source.

Meanwhile, Covantis, the blockchain initiative founded by Archer Daniels Midland (ADM), Bunge, Cargill and Louis Dreyfus, announced global expansion plans in March 2024, with a new presence across Australian, European and South African grains and oilseeds and the global vegetable oils market. The company says it has cultivated a network of 44 agricultural groups and over 200 legal entities. This most recent expansion allows it to cover more key origin markets for grains and oilseeds.

Main, who continues to monitor the technology as it touches agriculture, says he sees point-of-origin tracking as a key point for blockchain in ag. “We’re seeing it on RFID containers, at pork production facilities, at the grocery store,” he says.

Walmart, one of the early adopters of blockchain technology, continues to leverage it for traceability, for example in outbreaks of food-borne disease and in logistics tracking. One project on mangoes reduced tracking time from their origin from seven days to just 2.2 seconds. Today, the retailer is integrating blockchain with AI to enhance procurement and supply chain management, according to The Supply Chain Report in January 2024.

The Future

Looking ahead, agriculture has much to gain from leveraging blockchain, says Brunner. “Today, Bitcoin can process roughly five transactions a second. For comparison, VISA does around 100,000 in a second,” he says. “But there have been developments on how we do process transactions faster with other blockchains, and that will change everything.”

Another key development effort is in the core of blockchain. “By its nature, blockchain is entirely public, which may not thrill some people,” he explains. “But zero-knowledge proofs would allow you to verify knowledge of something but not make it public.”

For example, the recipient of a soybean shipment could verify their supplier has money in an escrow account without seeing the account details. “You can verify they have the money, but you don’t have to have revealed everything about the account,” Brunner says.

Tokenization also provides more opportunities. Wall Street is very interested in this as a powerful financial instrument. For example, you might be able to buy a house, but you might not be able to buy a whole office building in Chicago. If you tokenize a building, you could sell fractional shares of the building through blockchain tokens. “Potentially, farmers will see tokenization of hedges that make it easier to manage their risk,” he says.

And AI and blockchain together provide another avenue for agriculture to leverage the new technology. “Blockchain provides a way for these AI agents to transmit,” Brunner explains. “An AI agent could be invoked to act when the weather gets bad, knowing that it needs to sell something automatically or rebalance hedging.”

Blockchain solutions are still here and still showing great potential, Brunner says. In fact, he predicts we’ll start hearing more and more about them later this year.

Says Main: “Blockchain has a role. It’s on the horizon, and we continue to monitor its status, any legislative developments and certainly its potential.”

What Is Blockchain?

• Blockchain is a network of blocks of data that makes information and currency and other data available worldwide.

• Each digital block contains a set of transactions that are linked together chronologically to form a chain. And each block is cryptographically secured and assigned a hash—a unique identifier that ensures data integrity.

• This creates a ledger that a network of participants can collectively maintain. That ledger is transparent and immutable, meaning it cannot be changed.