Breaking Open the Chain

The revolution of food transparency

Michele Fossi in conversation with Angel Versetti

Food and agriculture are some of the leading topics by which we can measure an increasing desire for sustainability. But it is also a field where transparency and quality are constantly threatened by an opaque system of production and distribution.

Ambrosus is the ambitious project of Lausanne-based entrepreneur and crypto-investor Angel Versetti, which aims to bring an unprecedented level of transparency to the ingredients that stock our kitchens and the meals that land on our table . Combining the blockchain technology fundamental to the operation of Bitcoin with that of the Internet of Things (IoT sensors), Ambrosus is at the forefront of this new challenge to the current state of the food industry, and considers itself nothing less than “the world’s first publicly verifiable and community-driven system to assure the quality, safety and origins of food”. Forget fidgeting with your glasses in the supermarket, trying to read the tiny writing on nearly unintelligible and rarely informative food labels: the revolution of food transparency has just begun.

Ambrosus founder Angel Versetti is a recognised expert and frequent speaker on innovation, technology, and economic development. Before he funded Ambrosus, the self-defined “blockchain enthusiast”,  led investments in startups, social projects and early cryptocurrencies through his partnership with Versetti & Co.  Angel holds a BA in History, Politics and Philosophy and an MA in Public Management (Excellence Scholarship) from Sciences Po, Paris. He was one of the youngest lead published authors and project leaders in the history of the UN and regularly sits on discussion panels for the Davos World Economic Forum, the Vatican, UNESCO, and COP21.

DUST met Angel Versetti to talk about the groundbreaking blockchain technology, decentralised control, and new possibilities for quality-conscious producers and buyers to fight the food corporations’ monophonic pressure.

 

 

Many improvements have been made over the last years for legislation in favour of more transparency along the food supply chain. But there are still many areas of opacity in the industry. Can you give us an impression of how transparent the food sector is in Europe today, and what is still occluded?

Europe is doing much better than most other regions in the world, regarding traceability and quality of food. There are stringent requirements on quality-assurance and origins, especially when it comes to imported products. At the same time, there are persistent reports of poor control and scandals taking place –  for example, the discovery of beef containing undeclared horsemeat in 2013, the widely contaminated eggs that hit the markets earlier this year, and the uncovering of the use of antibiotics in chicken farms. But actually, such public incidents are not the most significant threat, as they have direct and rapid consequences (exposure to bacteria and people getting sick). The more serious issue concerns the creeping hazards – those components present in food or food processing, which, when accumulated through several years of consumption, can contribute to the development of terminal diseases, such as cancer or Parkinson’s, or genetic mutations – those are serious problems.

That’s scary. Which contaminants are you talking about?

The literature on this topic is enormous. We know now that processed meats contain nitrosamines, which make the liver produce fats that are toxic to the brain. We know that a variety of sweet foods, such as high fructose corn syrup, lead to the slowing of the brain and memory loss. Many contaminants, like the polychlorinated biphenyls contained in farmed salmon, and the ubiquitous hydrogenated oils contained in processed foods, are linked to the insurgence of a variety of cancers. We know that nitrites, for example, a typical preservative in hot dogs and ham, can cause colorectal cancer;  Bisphenol-A (canned tomatoes, beans) is linked to breast cancer and prostate cancer. There is also a clear correlation between high-glycemic levels (white and pastry flours) and lung cancer. And there’s more: the frequent consumption of chicken heavily treated with antibiotics leads to antibiotic tolerance in human bodies, which means that after long-term consumption, humans will no longer be able to cure their diseases with antibiotics. An estimated 10 million people will be dying each year in the future from antibiotic tolerance and the inability to cure diseases. And of course it’s more than legitimate to be wary of GMOs: there have been no studies of the long-term effects of GMOs on a human organism; many scientists suspect GMOs may also lead to genetic mutations or new diseases.

We all know how hard it is for the public to get transparent and trustworthy information about food, when the industry can deploy considerable capitals to cover it or ‘dilute’ it, on both conventional media, and peer-reviewed science journals. French journalist, documentarist and activist Marie Monique Robin, whom we interviewed in DUST #8, called agro-business giant Monsanto “a machine of disinformation”.

Indeed. Private parties substantially finance most of the studies and research, and where the findings are worrying, they are suppressed by large companies. Consumers, on the other hand, should be aware of these things, but instead, have to rely on labels or regulations.

And labels are not exactly transparent. So you came up with the idea of Ambrosus. Before we go deep into the matter, can you try to give us a simple and intuitive definition of what Ambrosus is?

Ambrosus is a publicly-accessible repository of information about life-essential products, in which the information is stored once and forever, and nobody can delete or edit it. At the core, it becomes the trusted source of information about food and medicine; this is what our core protocol does; all around it, we develop various applications and software tools to permit integration of Ambrosus into different supply chains and industries.

At the core of Ambrosus we find the “blockchain” – the mathematical tool central to the functioning of cryptocurrencies such as Bitcoin, which allows for secure interactions between contractors without the need of mediating entities, such as notaries, banks, etc. What exactly is the role of this technology in Ambrosus?

In Ambrosus, blockchain plays several key roles. First of all, the blockchain technology allows for the immutability of records about origins of products, processing, ingredients used, as well as conditions used in distribution.

You mean that no one, not even the most talented hacker, can alter the information about food stored in the blockchain?

Yes, blockchain itself is immutable. Each new block of transactions refers to the previous block, which refers to the one before, and so on, ad infinitum. There is no way for hackers to hack the blockchain because they would need to recreate the entire history of all blockchain transactions, and then to persuade over half of the network nodes that their version of the events is the correct one. Mathematically, this is nearly impossible, and any attempt to do so would require hundreds of millions of dollars, and would also not go unnoticed. This is what makes blockchain so robust: it’s an immutable ledger of transactions. And that’s just one of the many advantages of using a blockchain.

What are the others?

Another important one is that the blockchain technology allows you to create an open-source ecosystem, since the blockchain protocol that we use, Ethereum, is open-source. This means that it is going to be straightforward for other developers to create new applications and build them on Ambrosus. We have also created a new cryptocurrency, called Amber, that will allow developers to monetise their solutions by integrating them into the protocol.

What kind of application could be built on Ambrosus, that could affect the information we have on food? Can you give us an example?

One application enables steaks to have their own certificate of history, about their origins, quality and storage conditions.

Another app is a marketplace where farmers can supply high-quality products and make direct sales.

Concluding the list of advantages of using a blockchain, probably the most important of all is that the blockchain allows Ambrosus to be an utterly decentralised entity. Can you tell me a bit about what that means?

Decentralised means that there is no single point of failure: no one authority who can claim what data is true and what is not. Ambrosus functions, instead, as a series of distributed network nodes that exchange information in a peer-to-peer fashion. They watch over each other, creating a robust network. This also means that other stakeholders and entities can continue building the Ambrosus ecosystem, independent of Ambrosus, so there is no part of Ambrosus one can shut down to stop the network. We create a movement for transparency and accountability in supply chains, and that movement persists whenever there are any computers or devices connected to each other; they can exchange information about crucial transactions. Bitcoin has been hated by many stakeholders who would love to shut down the network, but the signal goes everywhere, and the network is global. We intend to do the same thing with Ambrosus and with accountability for life-essential products. There are enough people in the world who believe that humanity deserves to know where their food comes from, and what’s in it, and they will support the network and its history of transactions.

The blockchain technology is just one of the pillars of Ambrosus.  What role do IoT (Internet of things) sensors play? What are they, actually?

They serve as sources of data about products. The sensors assess internal parameters and external conditions for food/pharma products and supply reliable data to the blockchain, where it is recorded. Ambrosus develops application programming interfaces (APIs) to integrate a wide variety of existing sensors into its ecosystem, turning sensors into what are called ‘oracles’ (trusted sources of information). It also leads R&D into the development of its own sensors, coupled with the ongoing research happening at EPFL (Swiss Federal Institute of Technology).

Let’s take the example of a salmon filet, and help me visualize these oracles in action.

When salmon is brought to a processing facility, the sensors analyse the quality of salmon, establishing that it’s wild and of high quality (texture analysis): this creates the birth certificate for the caught salmon and amber tokens that link the info from sensors to that particular salmon. For example, 10 tonnes of salmon is shipped in 20 batches of 500kg each, and each is followed by an amber token. During the distribution phases, temperature sensors assure that wild salmon is stored at the proper temperatures and the information is then relayed onto blockchain via amber tokens, adding new details to the history of the salmon; when it arrives to the smoking station, and the station wants to assure it is not using any dangerous processes for smoking or curing the salmon, it records proof of the process onto blockchain (proving that the batch of salmon has been properly cured, and that particular processes have been applied). Finally, the salmon is despatched to restaurants and premium shops, to which tokens are linked, storing data collected from sensors (who act as oracles, trusted sources of information) for blockchain.

Now let’s imagine this salmon filet is on my table.  How do I retrieve such information? Do I have to scan a barcode on the packaging of the product with an app on my phone?

Yes. Another similar technology would be NFC stickers, against which one could simply tap the phone to get the info to appear on the screen.

One of the project’s most exciting aspects is the fact that it aims to build a new, ambitious peer-to-peer system for food. Will we start exchanging food, skipping the commercial distribution, in the same way many of us used Napster and other P2P platforms to exchange music files?

Sharing digital files in a P2P manner is a lot easier than sharing actual physical products, especially perishables, which have a limited period of shelf-life and require particular storage conditions. What we aim to do, with our P2P marketplace, is create opportunities for farmers, fishermen and small manufacturers to have a wider selection of potential clients who wish to buy verifiably good-quality food, instead of being subject to a monophonic pressure of the big buyer, forcing farmers to go to extremes in order to make ends meet, and often sacrificing quality.

By opening direct channels of supply to hotels, restaurants, premium shops, or companies sourcing quality products, Ambrosus aims to create opportunities for quality-conscious producers to be financially rewarded. This is enabled through our growing partnerships with various industry players.

Some examples?

Ambrosus has partnered with Cantone Group and Hospitality Group International, who import and export high-quality food products for European and American premium hotels and restaurants. Through these partnerships, the Ambrosus marketplace finds the receptive buyers for produce, fostering adoption of sustainable techniques to produce food.

Do you think Ambrosus can help small producers sell their niche products, such as rare varieties of cheese, organic wine and olive oil, at a fairer price than the one usually granted by large-scale distribution?

Yes, we are working on a reputation system for individual users, aiming to create opportunities for farmers with niche products. Producers can earn reputation points and find more buyers (or higher prices) for their products.

So, in other words, you are trying to build the equivalent of Airbnb reviews, or Ebay reputations, for food production…

Yes. The current situation, where a lot of agricultural products are bought by powerful buyers at very low prices, incentivises farmers to keep their prices down. There is no incentive to produce higher quality products, unless the farmers create their own distribution channels, or travel to cities to sell their products, which can be complicated, and a lot of work for them. With a reputation system, one could indeed differentiate between those who deliver quality products, offer excellent services and create opportunities for them to make more money. When others see that their quality-sensitive peers are earning more, they will also be motivated to switch to better agricultural practices and to move the market towards quality-conscious, sustainable farming.

Food transparency is particularly important to religious people following specific dietary rules, such as halal and kosher food for Muslim and Jewish communities, respectively. I heard you already ran a case study for halal food. Can you tell us more about this unusual experiment, bridging one of the most modern and talked-about new technologies with a centuries-old religious tradition?

We developed a use case for halal food ahead of our visit to the UAE, where we met policymakers from the Dubai authorities, who have very high ambitions for Dubai in 2020. For many, food quality derives from health concerns or positions related to ethics and sustainability, whereas in the Islamic world, there is also the element of spirituality. Therefore, it is essential to assure people that something concerning their religious life is verifiably following the best practices. Often this is not respected by the distributors. For instance, halal products are supposed to be entirely segregated from non-halal products, but in practice, some distributors are ignoring this requirement to try and save costs. With nobody to monitor this, it goes unnoticed. We are aiming to use the blockchain to give people faith that this technology is diligently protecting their faith and preferences.

Although Ambrosus’ primary focus at the moment is improving supply chains for life-essential products – specifically food and medicine –, do you think the protocol can be applied to almost any complex supply chain, bringing transparency to the market as a whole?

Yes, we are creating a general-purpose protocol for assurance of quality, safety and origins of products. While food and pharma are industries in which we have an existing speciality, we are hiring experts in other relevant sectors – such as precious metals, chemicals and fuels – as our solution can also be applied in those industries.

If widely diffused, do you think a peer-to-peer trust system, like the one implemented by Ambrosus, could affect the price of food? In particular, do you think it might affect the price gaps between organic and conventional food?

A P2P system can positively impact the price of food in several ways. More producers will be able to showcase that they follow the best practices, developing new standards of quality that will blur the gap between organic and non-organic food – for instance, nowadays there is a lot of organic food containing GMOs, which would anger consumers if they knew about this, but most just assume that organic means GMO-free. We also create more competition, by offering direct sales channels to producers; this means that the middlemen, who are mainly rent-seekers in supply chains, will not be able to manipulate the prices as much as they can today. There will be less distortion in the markets, and, as a result, prices will reflect the actual demand and supply of products. Finally, Ambrosus can automate quality control, supply-chain management and distribution processes, driving down the costs of food manufacturing and distribution, which can then be passed onto the consumers in the form of lower prices.

The Bitcoin supporters foresee a world without banks, where the money will be freely exchanged in a decentralised, peer-to-peer and trustless fashion. Do you foresee, analogously, a food world without supermarkets and big distribution?

As someone who studied history and political theory, I do not believe that the entire breakdown of power structures is possible. What is more likely is that some entrenched institutions will be disrupted by the new technologies. Its already happening. Those who are unable to adapt to the change will disappear and be replaced by the new structures. These new structures, however, will also have powerful stakeholders. This is the nature of any development. People – despite anything they might claim – love power and money. They do not let go of either easily. Banks might transform, but they will still be there. Similarly, in the food industry, it is most likely that large distributors and supermarket chains will continue to exist, and that in it is not a bad thing – that being said, we do hope to encourage more local economic interactions and the creation of regional opportunities for food manufacturers. The real abuse occurs when these distributors and supply chains are entirely unaccountable and do not serve the interests of the community. They always need to be checked and counterbalanced by a powerful technology, but they don’t necessarily have to disappear.