A better way to track various commodities?
Global shipping giant Maersk is expected to announce it is using IBM’s version of the blockchain to track its cargo consignments Photo: BLOOMBERG
Frank Yiannas has spent years looking in vain for a better way to track lettuce, steaks and snack cakes from farm and factory to the shelves of Walmart, where he is the vice-president for food safety. When the company dealt with salmonella outbreaks, it often took weeks to trace where the bad ingredients came from.
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Then, last year, IBM executives flew to Walmart’s headquarters in Arkansas to propose a solution: the blockchain. As Yiannas studied their pitch, he said, “I became increasingly convinced that maybe we were on to the holy grail."
The blockchain — the buzzy, bewildering technology behind cryptocurrencies like Bitcoin — is starting to be applied to real-world problems like tracking pork chops, shipping containers and footwear with a speed and security not currently possible. The IBM-Walmart partnership is one of the biggest practical tests to date.
At its heart, blockchain simply refers to a bookkeeping method that “chains" together entries so that they are very difficult to modify later. It provides a way for large groups of unrelated companies to jointly keep a secure and reliable record of their transactions.
IBM is trying to position itself at the forefront of the heated competition for practical uses of this arcane idea. Walmart is just one of 400 IBM clients testing it out, and IBM now has around 650 employees dedicated to the technology.
The most immediate business opportunities are in the financial world as a tool to track and trade stocks, bonds and other assets. But in the next week, Maersk, the global shipping giant, is expected to announce it is using IBM’s version of the blockchain to track the avocados, flowers and machine parts it carries on its enormous cargo ships. Last month, the government of Dubai said it was working with IBM to trace the goods flowing through its ports.
Yet success is far from assured. Rival Microsoft said this past week that it was working with J P Morgan Chase and several other corporate giants on a system that competes against IBM’s, based on the virtual currency network known as Ethereum. Many banks are concerned that IBM could push them into a version of the blockchain that would lock them into IBM’s software.
“We believe with 100 per cent certainty that it’s going to matter," Mark Russinovich, the head of Microsoft’s blockchain efforts, said of the technology. “It’s a question of where’s its going to matter and how it’s going to matter."
It was Bitcoin that first caught the attention of IBM researchers, and everyone else. Bitcoin, born in 2009, represented a novel idea in the financial world. Unlike, say, dollars or yen, Bitcoins are virtual tokens, unaffiliated with any nation. Anyone can open a wallet and receive Bitcoins — without providing any identifying information — and transactions are recorded on a universal ledger that is visible to everyone. Drug dealers have embraced its relative anonymity.
© 2017 New York Times News Service