Blockchain: traceability back in favour?

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Blockchain: traceability back in favour?

After a (short) period in the wilderness, blockchain is making a comeback in the field of traceability. The development of the technology and the arrival of the European digital passport have clearly changed the situation.

After a (short) period in the wilderness, blockchain is making a comeback in the field of traceability. Developments in technology and the arrival of the European digital passport have clearly changed the game.

If I say chicken and blockchain, you'll obviously reply... Carrefour!

Some may remember the blockchain project for chicken traceability launched in 2018 by the French group. For those who may have forgotten, the aim was to enable customers to know and track the origin of the chickens sold on the shelves.

Six years after its launch, Carrefour is still using its blockchain and has even extended it in the meantime to several other products (oranges, tomatoes...), but it has to be said that success is far from there. Only some of the products are traceable, and above all the functionality is very limited.

"Nobody dares say it because we're talking about a big group, but Carrefour's blockchain is a failure", points out a good connoisseur of the subject. When contacted, Carrefour did not respond.

The reasons for this "failure" or "semi-success" - let's not be too harsh - are fairly simple to understand: the group headed even then by Alexandre Bompard chose, like many other companies, a private blockchain, IBM's (Hyperledger) for its traceability.

"The advantage of private blockchains is that you control the data and the costs," explains Quentin de Beauchesne*, co-founder of the company Ownest specialising in industrial traceability on the blockchain.

This system is obviously reassuring for quite a few companies. "But the downside is that you have to manage the infrastructure, update the software and, above all, it's a system that isn't open and interoperable," he adds.

Many failures

Is this why most of the projects launched with private blockchains between 2018 and 2020 haven't broken through? That's clearly what most experts think. "Take Boeing, Airbus, Rolls Royce, Renault... You can't count the number of major groups that launched their private blockchain before moving on for lack of tangible results," explains one of them.

In their defence, the technological landscape at the time was nothing like it is today. In 2018-2020, the alternative for traceability boiled down to: a private blockchain of the hyperledger type or a public blockchain via a layer 1 protocol like Ethereum.

"There weren't layers 2 yet which are faster and, above all, cheaper", explains Flavio Restelli, who has just left KPMG's blockchain branch to join Nicomatic, a French supplier of micro-connectors that has developed blockchain traceability solutions for its customers in the aeronautical world.

Layers 2 and ZKP

Besides the arrival of Layers 2, which are therefore faster and cheaper - transactions that cost less than a penny - the development of Zero Knowledge Proof (ZKP) solutions also offer prospects for businesses. "ZKP means that you can use a public blockchain with much greater peace of mind when it comes to data security," says a major French luxury goods group.

The development of homomorphic encryption, which enables operations to be carried out on encrypted data without first having to decrypt it, has also opened up new prospects. Three months ago, the French start-up Zama, considered to be one of the leaders in this field, raised a whopping 73 million dollars to develop its solution.

Meanwhile, traceability projects using blockchain are multiplying. "We are working with a number of players in the aerospace industry on a public blockchain solution that would give everyone a global view of their supply chain," explains Flavio Restelli. "Given that the entire industry works together, this makes sense."

The approach to traceability has also evolved. It no longer applies to exactly the same thing. "Still, we've made progress," quips Nicolas Bacca, co-founder of Ledger, who left the venture at the end of 2023 to launch his own project, Smooth. "Companies have realised that the most important thing is to know what you want to trace," he adds.

Two types of traceability

This finer-grained approach gives rise to two types of traceability. There is "upstream" traceability for manufacturers. This traceability concerns the manufacture of products, the management of parts and their tracking. "It's a question of internal optimisation. The aim is for the information to be available on the public blockchain and for us to be able to query the blockchain directly", explains Flavio Restelli.

Downstream, there is the traceability of finished products, those that will be in the hands of the customer: chickens, bags, shoes... "This is an approach that is not focused on the traceability of the product, but on the ownership of the product. Who owns it? That's what's interesting," explains Pierre-Nicolas Hurstel, co-founder and CEO of Arianee, which is one of the market leaders in product traceability on blockchain.

The digital product passport

Many players such as Arianee, Ownest and Nicomatic are accelerating on the subject with their sights set on the arrival of the digital product passport in Europe. This system is already available for batteries. It will be available for textiles by 2025. "All products are concerned", explains Pierre-Nicolas Hurstel.

The main challenge lies in standardising the data on digital passports. "There is still a lot of work to be done in this area," stresses Flavio Restelli. The aim is obviously to avoid fragmenting the market as happened a few years ago with private blockchains...

(*) Quentin de Beauchesne is a minority shareholder of The Big Whale in his own right

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