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Deficiencies in Block-Chain Supply Chains

Rejected submission by cafebabe at 2018-05-24 20:25:39
Business

On Fri 11 May 2018, I picked up a hardcopy edition of the alleged newspaper, CityAM [cityam.com]. I wish that I hadn't. There was one article about Apple partnering with Goldman Sachs for payment systems. (Perhaps they'll use a squid [rollingstone.com] logo?) On facing pages, there were articles about non-financial use of block-chains. In the first article, De Beers plans to use a block-chain to trace the diamond supply chain. In the second article, Kodak plans to use a block-chain to provide image authentication.

In general, supply chain transparency should be applauded whether it is automotive/aerospace parts tracibility, medical tracibility, food tracibility, gem and mineral tracibility or digital authentication/non-repudiation. All of these are inadequate in the current form and many will remain inadequate in proposed forms. The classic limitation is known as the One Sandal Problem. A (hopefully fiticious) war photographer packed one child sandal with his photography equipment. After arriving at an abandoned village or similar, the sandal can be chunked into the scene prior to photography. The pictures on film or file are unedited but it gives a false impression that families left in a great hurry when no such incident may have occurred. Cryptography and/or block-chains do nothing to ensure that a scene is untampered before images enter a tracible system. Obviously, advocates do not make such claims. However, like the Fonejacker's George Agdgdgwngo [youtube.com] explaining salami slicing [wikipedia.org], the numerology of crypto and/or block-chains may dazzle or displace discussion of the One Sandal Problem.

Gemstone tracibility is worse. It is possible to have a diamond mine which meets international labor standards, international environmental standards or generally be one of the better employers in a given region. However, this doesn't prevent one or more unofficial mines also operating. How likely is this? In China, rogue iron smelting plants are a significant environmental problem but region government has financial incentive to allow them. Central government only knows the number and location of such plants due to analysis of aerial photography covering the whole country. It would be unreasonable to expect mines in Africa to operate with more transparency. Indeed, there is similar financial incentive for minerals in unofficial mines to be "found" in an official mine. This inflates the productivity of the official mine while keeping costs low. Or at least, the costs that cannot be externalized to the environment or worker prospects.

Food tracibility is worst. After the European Horsemeat Scandal [wikipedia.org], the quality of "minced beef" notably declined in taste and protein ratio as it more closely approximated minced beef. Understandably, before this incident, some countries had laws which only allow meat sold at retail to be minced in the presense of the customer. Although this ensures that the input of the mincing process approximates the specified species, it does not prevent protein bulking from another species. For example, chicken may be bulked with mechanically recovered pork. Likewise, it is generally legal to feed chicken remains to cows and cow remains to chickens. Regarding unspecified horsemeat, one executive was very forthright about the matter. Previously, it wasn't common practice to test for horse DNA and nor is it common practice to test for zebra DNA. More seriously, how much would you spend to get an answer that you don't want? And would you spend more than rivals?

Although it is possible to trace one burger to one cow, the pedigree of a cow may become meaningless before such tracibility becomes widespread. With cloned animals in the food chain, the descendants of cloned animals in the food chain and the possibility of cultured meat in the food chain (and the possibility of putting Wendy meat in Wendy burgers), cheap DNA testing will confirm a brand of meat. However, it will not determine a family tree of contaminated animals nor unlicenced sources.

Component tracibility is much more hopeful but this may incur limitations elsewhere. Parts tracibility allows a bad batch of components to be replaced before they become too problematic. Unlike the infamous recall formula, a block-chain may allow defect rates to be publicly scrutinized. However, in the case of open source software, we are aware of the limitations of public scrutiny. In the trivial case, parts tracibility allows metal fatigue to be identified before it causes a fatal accident. It may also identify a lack of scheduled maintainence. Although, it does not identify forged paperwork (as occurred in fatal accidents, such as the Potters Bar Crash [wikipedia.org]), it does reduce the scope required to maintain consistent lies. For example, if a fictitious serial number is used, it may also require a fictitious supplier and a fictitious purchase order. Also, a component with a serial number cannot be in two places. This is trivial to forge on paper but is more risky in a public, distributed database.

Laser etched serial numbers on chips may reduce counterfeiting. However, chip designers cannot resist secondary uses for serial numbers. Most often, this involves licence locking where programs or data may only be used on specific instances of hardware and with conditions which change with the whims of the licensor. There is also the significant limitation that serial numbers can only be read when a device is powered. If it can be powered remotely, such is the case with RFID sensors or product tags, it may infringe upon privacy. You may prefer to not be identified by your clothing. You may also prefer not to broadcast a kinky underwear fetish. With the whims of environmentalism, you may or may not prefer to broadcast the frequency, duration and quantity of clothing worn. There are also concerns about manufacturing. In common with mining, supply chain tracibility may improve working conditions for some people at the expense of others.

In summary, an object manufactured with a number may be traced; possibly at the expense of other desirable goals. However, commodities which don't have an intrinsic number aren't greatly improved by supply chain tracibility. The tracibility of files only extends to existence. It does not extend to any file being true.


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