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Quite a few times I've heard the line that blockchain can revolutionize supply chains, but I still don't understand it. Since you're dealing with physical good

by luhn 7y ago

Quite a few times I've heard the line that blockchain can revolutionize supply chains, but I still don't understand it. Since you're dealing with physical goods, you're relying on the participants of the system to enter data truthfully and accurately, which defeats the purpose of a "trustless" data store like blockchain.

Anon84 7y ago
You're missing the IoT component. The devices themselves do the data "entry" on the blockchain so the whole system is automated, distributed and tamper proof (assuming you don't hack the devices, of course).
- Kpourdeilami 7y ago
  How can you ensure the devices are not hacked though? If someone has physical access them, would it be possible to limit them from tempering with them?
- cortesoft 7y ago
  But the IoT device will have to be attached to the actual good. How can you know the device is attached to the actual good and not something else?
- LiquidSky 7y ago
  >so the whole system is automated, distributed and tamper proof No it's not. It all still depends on people honestly and accurately implementing the IoT component. It's just pushing the problem back a step. All of these schemes ultimately fail because they face two challenges that inherently involved messy humanity and physical reality: the oracle problem and the enforcement problem.
- albertgoeswoof 7y ago
  But if you have to trust that the devices aren’t hacked why can’t you just use a database and give each device a private key?
  - scott_s 7y ago
    This is the key question to any blockchain-for-X proposal: explain why you can't just use a secured database. My personal suspicion is that all commercial activity already requires enough trust that using a secured database is tenable and vastly easier.
- ska 7y ago
  That just punts on the problem. It's basically not solvable - at some point you have to trust humans anyway. The only reason this works well for, say, bitcoins, is that they are a digital "asset" created on the chain themselves. Everything else trying to tie a physical asset to a chain has the same problem, you can't do it without relying on trust outside the system.
  - JumpCrisscross 7y ago
    > Everything else trying to tie a physical asset to a chain has the same problem Agree that “blockchain for supply chain” is inherently flawed. But there are hypothetical (if currently unfeasible) use cases. For example, derive a cryptographic key from a carcass’ DNA. Now you have a good physical-digital nexus. Or, for electronics, measure some random and hard-to-replicate analog jitter.
  - frm210 7y ago
    Sure, but you have to trust less humans. You only need to trust the source, without needing to trust the middle-men.
    - hef19898 7y ago
      So in case of e.g. a fridge the source would be some copper mine in Africa and the other end be Amazon Logistics that delivers the fridge to your house? When you draw the line somewhere else the issue to be solved it balancing transparency, trust, willingness of the channel master to share information and the tendency for powerful entities to form.
  - blotter_paper 7y ago
    I think you're fundamentally correct, but with the caveat that trust inside the system can be the basis for trust outside the system via Zahavian signalling and/or escrow. As a simple dumb example, if an institution sends a million dollars to a burn address then I can probably trust that institution to handle half a million dollars in assets at a time without screwing over their customers (if they didn't intend to act fairly and make back that money over time through sustainable business practices they wouldn't have burned it in the first place). It's trickier than that -- you have to consider whether this is a sunk cost in a given context, if all customers are on the same page about what assets the institution is handling, etc. -- but the basic idea is there. Escrow is more clever than a burn pile, but could lead to some weird situations where one side attempts to extort the other for most of the escrow's value, and simply making both sides pony up doesn't obviously solve this (though it goes a long way).
- dragontamer 7y ago
  If you have a tamper-proof, automated, and distributed, 100% trusted devices providing statistics for your supply chain, why do you even need blockchain? I dunno, this seems like the one-time pad thingy. If you had a mechanism to transfer a 10GB one-time pad to your friend in a secure manner... why not transfer your 10GB of "protected" data in that secure manner instead? Just because a technical solution "technically works" doesn't mean its useful.
  - kosievdmerwe 7y ago
    The OTP has the benefit that you can delay the 10GB transfer until later. For instance, you might be able to transfer 10GB safely today, but tomorrow you or your friend might go off to a dangerous place and you can no longer do the transfer and the data you want to transfer can only be generated after going into the dangerous place. That all said, I still don't know what problem blockchain solves. Other than crypto-currency.
- hef19898 7y ago
  The biggest issue I see is to match the virtual information, Blockchain or not, with the physical goods. Once this link is broken Blockchain is definitely dead in that environment. And once you solved that problem Blockchain doesn't that much value.

by luhn 7y ago

Anon84 7y ago

You're missing the IoT component. The devices themselves do the data "entry" on the blockchain so the whole system is automated, distributed and tamper proof (assuming you don't hack the devices, of course).

Kpourdeilami 7y ago
How can you ensure the devices are not hacked though? If someone has physical access them, would it be possible to limit them from tempering with them?
cortesoft 7y ago
But the IoT device will have to be attached to the actual good. How can you know the device is attached to the actual good and not something else?
LiquidSky 7y ago
>so the whole system is automated, distributed and tamper proof No it's not. It all still depends on people honestly and accurately implementing the IoT component. It's just pushing the problem back a step. All of these schemes ultimately fail because they face two challenges that inherently involved messy humanity and physical reality: the oracle problem and the enforcement problem.
albertgoeswoof 7y ago
But if you have to trust that the devices aren’t hacked why can’t you just use a database and give each device a private key?
- scott_s 7y ago
  This is the key question to any blockchain-for-X proposal: explain why you can't just use a secured database. My personal suspicion is that all commercial activity already requires enough trust that using a secured database is tenable and vastly easier.
ska 7y ago
That just punts on the problem. It's basically not solvable - at some point you have to trust humans anyway. The only reason this works well for, say, bitcoins, is that they are a digital "asset" created on the chain themselves. Everything else trying to tie a physical asset to a chain has the same problem, you can't do it without relying on trust outside the system.
- JumpCrisscross 7y ago
  > Everything else trying to tie a physical asset to a chain has the same problem Agree that “blockchain for supply chain” is inherently flawed. But there are hypothetical (if currently unfeasible) use cases. For example, derive a cryptographic key from a carcass’ DNA. Now you have a good physical-digital nexus. Or, for electronics, measure some random and hard-to-replicate analog jitter.
- frm210 7y ago
  Sure, but you have to trust less humans. You only need to trust the source, without needing to trust the middle-men.
  - hef19898 7y ago
    So in case of e.g. a fridge the source would be some copper mine in Africa and the other end be Amazon Logistics that delivers the fridge to your house? When you draw the line somewhere else the issue to be solved it balancing transparency, trust, willingness of the channel master to share information and the tendency for powerful entities to form.
- blotter_paper 7y ago
  I think you're fundamentally correct, but with the caveat that trust inside the system can be the basis for trust outside the system via Zahavian signalling and/or escrow. As a simple dumb example, if an institution sends a million dollars to a burn address then I can probably trust that institution to handle half a million dollars in assets at a time without screwing over their customers (if they didn't intend to act fairly and make back that money over time through sustainable business practices they wouldn't have burned it in the first place). It's trickier than that -- you have to consider whether this is a sunk cost in a given context, if all customers are on the same page about what assets the institution is handling, etc. -- but the basic idea is there. Escrow is more clever than a burn pile, but could lead to some weird situations where one side attempts to extort the other for most of the escrow's value, and simply making both sides pony up doesn't obviously solve this (though it goes a long way).
dragontamer 7y ago
If you have a tamper-proof, automated, and distributed, 100% trusted devices providing statistics for your supply chain, why do you even need blockchain? I dunno, this seems like the one-time pad thingy. If you had a mechanism to transfer a 10GB one-time pad to your friend in a secure manner... why not transfer your 10GB of "protected" data in that secure manner instead? Just because a technical solution "technically works" doesn't mean its useful.
- kosievdmerwe 7y ago
  The OTP has the benefit that you can delay the 10GB transfer until later. For instance, you might be able to transfer 10GB safely today, but tomorrow you or your friend might go off to a dangerous place and you can no longer do the transfer and the data you want to transfer can only be generated after going into the dangerous place. That all said, I still don't know what problem blockchain solves. Other than crypto-currency.
hef19898 7y ago
The biggest issue I see is to match the virtual information, Blockchain or not, with the physical goods. Once this link is broken Blockchain is definitely dead in that environment. And once you solved that problem Blockchain doesn't that much value.