Blockchain and impact

on agriculture
MALLIKARJUN SARVEPALLI
Agenda

 Blockchain Basics
 Evaluation of blockchain technology to real world problems
 Blockchain for Agriculture
 What is Blockchain

 Bitcoin is not Blockchain

 Bitcoin is a crypto token which uses blockchain technology for transactions
 Basic block of blockchain
 Distributed ledger
 Mining
 Smart Contracts
Typical traditional approach - Bank

Bank
A->B $100 $100 – service
$100
Customer A charges Customer B

Bank maintains ledger of all the customer

information along with transactions that were
conducted so far
Challenges
1) Transactional costs
2) Cross border payment
delay
3) Security (Bank systems
comprimised with lot of
customer information
stolen
 Decentralized ledger

Ledger
A=$200
Ledger
Ledger
copy
B=$50
copy
50 c=$10
A B
D=$20
.
$200 $20 .
$10 .
Ledger
copy
D C A->B $50
Ledger
copy B->C $20
C->D $10
Malicious
Miners

 Special nodes that can create new blocks in blockchain

 Mining process
 Miners receives all pending transactions
 Verifies all the transactions
 Solve cryptographic puzzle
 Whoever solves the puzzle will create a new block , appends all transactions and broadcast
to all other peers
 Block creator will get rewarded (Incase of bitcoins new bitcoins, incase of Ethereum just
transaction fees
 How challenge works
 Network throws a puzzle “Generate a hash block with leading 40 zeros”
 Miners run complex computations to solve this puzzle
Blockchain structure
Proof of Work vs Proof of stake

 Solving a crypto puzzle in mining process is

Proof of Work
 Disadvantages
 Huge amounts of electricity (~32 TW.
215 kw per transaction with 300,000
transactions per day)
 Formation of mining pools leads to
centralization of network
 Proof of Stake
 Miners are termed as validators
 Instead of solving crypto puzzles,
validators deposit stake in to the
network
 The more the staje, the more the
possibility of getting change to
create new block
 No resource usage
 Consensus Protocols

A consensus mechanism is a fault-tolerant mechanism that is used in computer and blockchain systems
to achieve the necessary agreement on a single data value or a single state of the network among
distributed processes or multi-agent systems

 Proof of Work
 Proof of Consensus
 PBFT
 DPOS

 Ref: https://www.persistent.com/wp-content/uploads/2017/04/WP-Understanding-Blockchain-
Consensus-Models.pdf
Smart Contracts and
DApps
 Digital Contract represented by a computer
program and stored on blockchain
 stores rules for negotiating the terms of an
agreement
 automatically verifies fulfillment
 executes the agreed terms
 DApps (Decentralized Apps) run on
decentralized P2P systems
 Use one or more smart contracts for executing logic
 Application’s data and records of operation must
be cryptographically stored
 Blockchain Characteristics

 No central authority
 Fault Tolerance
 Attack Resistance
 Collusion resistance
Permissioned and Permission less
Blockchains
 Permission less
 Allows anyone to interact with
blockchain network
 Consensus protocols with
either high computational
power or high stakes are
generally used to address 51%
attack
 Better suited for consumer
facing solutions
 Ethereum, IOTA (Doesn’t
require mining)
 Permissioned
 Requires permission from
administrator or consortium to
interact with blockchain
network
 Consensus protocols such as
RAFT or PBFT are generally
used
 Better suited for enterprise
blockchain solutions
 Hyperledger Fabric, Ripple
Popular Blockchain Platforms

 Ethereum - https://ethereum.org/
 Proposed by Vitalik Buterin in 2015
 IOTA - https://www.iota.org/
 Block less chain. Suited for IoT apps
 Quorum - https://www.jpmorgan.com/global/Quorum
 Public permissioned blockchain network built on ethereum
 Hyperledger Fabric - https://www.hyperledger.org/projects/fabric
 Permissioned private blockchain
 R3 Corda - https://www.corda.net/
 Formed by consortium of bank to handle cross border payments
 Ripple https://ripple.com/
 Enterprise blockchain platform for global payments
 Ethereum vs Fabric vs IOTA
Ethereum
 Permissionless
 Uses PoW. Plans to Move to PoS
(Casper)
 Runs Smart Contracts using
EVM
 Supports creation of Ethereum
private virtual network
 Supports creation of tokens
using ERC20,ERC 721
 Solidity as programming
language for smart contracts
 Governed by Ethereum
developer s
 Transaction per second -10
Fabric IOTA
 Permissioned  Permissionless
 Uses PBFT. Pluggable component
. Can support any consensus  Uses tangle . Block less chain
mechanism
 Better suited for IoT .
 Runs Chain code (Smart
contracts) on separate docker  Public permission less
container orchestrated by peer
node  Smart contracts planned
 By default supports only private with Qubic release
networks (multi organization or
single organization  Governed by IOTA
configurations)
foundation
 Smart contracts written in nodejs
or Go  Transactions per second –
 No currency or tokens 500-800
 Governed by Linux foundations
Technology Stack
ICOs and how they
work

 Mixture of IPO and Crowd sale

 uses Ethereum ERC 20 for token
generation
 Usage tokens and Work tokens
Top 10 crypto currencies (Market
capitalization)
Blockchain technology
assessment for real world
problems
Should I use blockchain?
Technical Challenges

 Scalability
 Latency
 Bitcoin (3-4 tps)
 Ethereum (15-20 tps)
 IOTA (50 tps)
 Fabric (3500 tps)
 Database
 Ethereum – leveldb (full sync – 600gb, fast sync-85gb, light mode – 50gb)
 Fabric – Leveldb and Couchdb
 IOTA –Rocksdb (~20 GB)
 Off chain solutions as alternative – Raiden, plasma and Sharading

 Interoperability
Legal Aspects

 Legislation with ICO and cypto currencies

 GDPR
 Smart Contracts
 Converting traditional contracts with complicated legal terms
 Defects in Smart contracts
 Handling assets in case of insolvency and bankruptcy
Agriculture on Blockchain
CHALLENGES & OPPORTUNITIES
Food Provenance

 Challenges
 Know where the food comes from. Look beyond the label
 Increasing demand from consumers
 8 in 10 consumers check the origin of their food when purchasing products (Element UK)
 Multiple stakeholders with vested interests
 Food scandals
 An estimated 600 million – almost 1 in 10 people in the world – fall ill after eating contaminated food and 420 000 die every year (WHO)
 (2008 Chinese milk scandal,
 The labels said ‘organic.’ But these massive imports of corn and soybeans weren’t (ref)

 Block chain platform

 Digital tag for every item
 Traceability of all transactions from producer to customer
 Retailers can easily detect fraudulent items and reduce recalls
 Consumer can track the source of the food items
 Initiatives/POC’s
 IP Australia trialling blockchain for food provenance
 Walmart Is Ready To Use Blockchain For Its Live Food Business
Supply Chain management

 Challenges
 Procurement tracking – Tracking and paying for a produce
 Multiple middle men – Reduced margins for producers (small farmers are often disadvantaged)
 Inflated prices to customers
 Unauthentic farming equipment – Low yield due to bad quality of seeds, pesticides and medicines
 Asymmetric information
 Inefficiency in Co-operative operations

 Blockchain
 instant payments between buyers and suppliers
 No Middle men
 Traceability across the entire chain thus reducing fraudulent actors thus increasing yield
 Unbiased Crop certifications leveraging IoT and Blockchain
 Real time authentic crop data analysis with accurate analytical solutions
 Accurate Soil health cards through real time monitoring of land use and soil quality

 Initiatives/POC’s
 Agriledger – streamlines co-op operations thus improving efficiency through smart contracts
 Blockgrain Enterprise supply chain management. Raised 2 million through ICO
 Ripe.io –use IoT and Blockchain to assess quality of food products and streamline supply chains
Community Supported Agriculture

 Challenges
 Governance
 Stakeholders credibility (Reputation management)
 Logistics and Supply chain management
 Community collaboration
 Quality assurance and Audit
 Blockchain
 Better governance using smart contracts – new financial models based on crop growth
 Continuous crop monitoring and data visibility
 Supply chain efficiency
 Stakeholders transactions on DLT improves credibility across stakeholders
 Initiatives/POC’s
 Farmshare (on hold)
Others

 Land Records
 Andhra Pradesh partners with Chromaway to secure land records
 Crop Insurance & micro lending
 Insurepal - https://insurepal.io/
 Worldcovr - https://www.worldcovr.com/
 Everex - https://www.everex.io/
Questions??