In this edition of Series;Verified, we’re talking with Davide Costa, co-founder of Foodchain S.p.A., who is bringing the transparency of blockchain to digital information. Foodchain’s method ensures quality and enables value-generating features in supply chains and digital systems, domains that have been highly affected by shifting whims and variables. Truebit is excited to talk about the revolutionary potential that lies in the marriage of blockchain and supply chain.
Welcome! Please tell us more about Foodchain’s fascinating origins.
Foodchain’s story starts back in 2012 when I met Marco Vitale, now CEO of Foodchain S.p.A., on BitcoinTalk.org, an online forum dedicated to bitcoin, blockchain technology, and cryptocurrency. At the time, despite the Italian blockchain community being almost non-existent, Marco and I spent entire days studying the mechanism of blockchain technology and discussing potential applications outside of the financial sector. This is when our collaboration began.
We started a project to initially take on the food industry in Italy with the objective to protect the “Made in Italy” brand, defeat product counterfeiting, and tackle the Italian Sounding phenomenon. Food supply chains are extremely complex and heavily regulated, therefore we had to invest in a massive research and analysis effort in order to harness the potential of blockchain technology and develop an innovative solution to protect one of the most counterfeited industries in the world.
As a result, we came up with a digital tool for traceability that enables businesses and organizations of the industry to achieve transparency and visibility of the supply chain as well as increasing quality of products and encouraging safe and sustainable processes.
The opportunity to present our solution took place during EXPO 2015 MILAN, dedicated to technology, innovation, culture, and traditions and how they relate to food and diet. We introduced Foodchain as the world’s first blockchain-powered tool for transparency and traceability of food supply chains and the great success encouraged us to officially launch Foodchain S.p.A. in 2016.
As we gained expertise over the years, we adapted and replicated our model across the entire digital landscape, not only the food industry. Today we serve sectors such as textile, pharmaceutical, energy, and even Public Administrations with projects involving digital identity and e-invoicing.
The Quadrans Foundation is an inseparable aspect of Foodchain. Can you talk about the Quadrans Foundation’s conception and its role both within and outside of Foodchain?
To understand the motivations beneath Quadrans Foundation’s conception, we first need to outline the evolutionary journey of Foodchain S.p.A.
Foodchain’s first experiments began in 2014 on Bitcoin’s blockchain. However, the lack of stability of the Bitcoin price prevents users from having a solid base for their business model and this could severely undermine the sustainability of a business.
In July 2015, Ethereum went live and the introduction of Smart Contracts on the Ethereum network was a great feature to leverage on in order to improve traceability of the supply chain and with very low impact on transaction costs.
However, soon the price of currency of the Ethereum network, the Ether, soared rapidly and the financial speculation on the cryptocurrency threatened our solution. There were no alternative blockchains, so we decided to design a whole new infrastructure with suitable characteristics. The enormous R&D effort led to the creation of an innovative and unique blockchain, today known as Quadrans.
Quadrans blockchain shares various features with Ethereum; however, we introduced significant stability to the currency of the network, the Quadrans Coin. Considering that unpredictable prices have a dramatic impact on the performance and execution of blockchain projects, we decided to remove cryptocurrency price fluctuations from the equation in order to ensure stability in the long run and slash running costs. This makes Quadrans a suitable infrastructure for large systems, such as industrial projects and government applications.
In 2018, a decision was made to transfer our know-how on blockchain technology to Quadrans Foundation, a non-profit organization established under Swiss law. This allowed Quadrans to focus on technical R&D that enabled the open-source model for the community, including Foodchain.
Building on years of work by the first team, the Foundation now works with government agencies, institutions and businesses globally and is a chosen technical partner in international projects (such as the European Trick project “Product data traceability information management by blockchains interoperability and open circular service marketplace”).
More than 40 members are currently associated with the Quadrans Foundation and share the same vision on the role of blockchain in the digital scenario of the future. Among the members are top experts specialised in different implications of blockchain (technicians, lawyers, professors, etc.) including Professor Massimiliano Sala and TrueBit Founder Jason Teutsch who are respectively President and member of the Foundation’s Crypto Board.
In the last few days, the Quadrans Foundation has released the latest version of its Yellow Paper — a technical document unveiling the hard work of the Foundation’s Crypto Board towards the development of a hybrid blockchain based on PoS (Proof-of-Stake) and PoW (Proof-of-work) with a three level network and a new and innovative consensus protocol.
The possibilities for enhanced supply chain function via blockchain are endless. What real-world integrations is Foodchain most proud of tackling?
The real-world integrations of our platform are various and we deployed our traceability model into several industry sectors.
We are proud of the collaboration between Foodchain and the Citrus Productive District of Sicily, which involves the adoption of the Foodchain decentralized application (DApp) by various member companies and enables certifying bodies to record PGI (Protected Geographical Origin) information on blockchain.
We also contributed to the textile industry. We have been awarded a research grant through the Regione Lombardia funding scheme “FashionTech.” In collaboration with other three key partners — together we cover textile production and customization of software to provide a practical demonstration of how blockchain can be used to achieve exceptional results for product, process, and social sustainability.
We also applied our blockchain technology to the forestry sector to enable transparent and complete monitoring of timber production processes. Nowadays, forest certification schemes and European regulations demand an increasing capability for traceability of information along the supply chain of wood-based products. The “Wood-chain project,” funded by PEFC International, tests and stimulates the application of blockchain technology as an innovative IT solution for forestry and wood production applications. The scope of the project is to provide transparency and traceability to wood and timber products in compliance with PEFC Chain of Custody certification (CoC).
Blockchain can enhance the supply chain process at every level, from producers through manufacturers to consumers. What benefits are you seeing at each stage?
A first step toward the efficient deployment of our solution is always a comprehensive analysis of the context in which it will operate. Usually this is a great occasion for the company to look at the totality of procedures, improve processes, identify waste along the supply chain, estimate costs, and go digital.
Blockchain technology is a powerful tool for producers and manufacturers as it enables the creation of a digital passport for the products. This is used to improve the value proposition by adding value to information such as origin and provenance, technique employed during production, manufacturing processes, and distribution.
Information collected is recorded permanently on the blockchain ledger, providing integrity and security of data along the supply chain. Producers and manufacturers can leverage on these qualities to protect their brand from counterfeiting and back quality claims on the product with authentic information.
Blockchain-based solutions also represent a powerful tool to increase brand reputation and communicate an added value to consumers through transparency and integrity of information. Via tags such as QR codes, end consumers can access information recorded on the blockchain to verify claims and make more conscious shopping choices.
How can Truebit best contribute to Foodchain’s efforts?
We closely follow and are deeply fascinated by the achievements of the Truebit team. We see ground for collaboration on more than one aspect.
At the infrastructural level, we can dovetail Truebit technology with Foodchain architecture to provide interoperability between systems and speed up the adoption process of the technology. Quadrans blockchain is also fully compatible with the Ethereum network so the integration of Truebit is facilitated and provides a favorable environment for the scalability of operations at reduced gas costs.
Another synergy consists of developing new applications and strategic use cases that can bring value to the industry by enhancing the computation power of the system and tackling issues with a large-scale solution.
For example, we are looking at the implementation of new solutions that can integrate satellite imagery into blockchain. The wood and timber products traceability and the agri-food sectors are the most promising economic markets where blockchain is featured with Earth Observation (EO) data and can have a dramatic impact on the general quality of natural products starting from field monitoring and traceability, and as part of the increasing digitization of the sector.
EO data can be considered as a verifiable source of information representing an oracle itself — a third-party service that provides Smart Contracts with external information serving as a bridge between blockchains and the real world.
The Truebit protocol via Truebit tasks can complement Quadrans for the on-chain execution of complex EO data processing algorithms, ensuring data provenance and data validation obtained according to a standardization model (ontology like https://ontospace.wordpress.com/).
A Truebit task can create an on-chain proof of execution of EO data processing thanks to standardized data that can be used to create geospatial mapping services and products such as certification and traceability of natural products.
Another Truebit task can be applied to EO processed data ensuring data validation and data provenance enabling data feed to machine learning models used by agricultural companies and agencies for time series analysis for crop management. Some of the use cases identified for this type of application are:
For traceability and product origin:
- Product authenticity
- Product origin
- Product traceability
- Maximum harvest
- Water usage
- Pesticide use
- Compliance with the product specification
- Excess rain coverage
- Insufficient rain coverage
- Snow coverage
- Crop loss protection
- Fertilizer coverage
- Fire protection