How does blockchain really work in forestry?
Prior to discussing how blockchain works we have to first come to understand the concept of “hashing”. What is a “hash”? A “hash” is simply the output of a program called “SHA256” that creates a unique string of letters and numbers for any given input. The string of letters and numbers it creates will always be the same as long as the inputs are the same, so its a good way to make information private but still track the information through a process and link it back to the original event. An example of a “hash” would be if you put the gps coordinates (38.904105, -77.047081) into the SHA256 hashing program you would get: “98101e11025bec27fca5dab3cf10cd32289be665b8ecccc53aa91ac381f7a082”
The useful thing about SHA256 for our purposes is that this output is unique to the gps coordinates we gave it. No other lat/long coordinates on the planet would produce the “hash” we got for those coordinates. However, the information is also private, because if some random person were given the hash “98101e11025bec27fca5dab3cf10cd32289be665b8ecccc53aa91ac381f7a082” there is no way they could determine what the inputs were. A detailed explanation of how blockchain works in forest product supply chain transparency is provided by the video at https://youtu.be/f053RxmmwwI, but briefly, the Catenaut blockchain system can be thought of as a georeferenced work order verification system. Although its much more complicated in practice, the theory behind our blockchain system is that each GPS device from our Forest Management Compliance system can generate a hash when a load is delivered to the mill; a “load hash” if you will. This “load hash” is essentially a unique ID number that not only identifies the load in the mill accounting system but also contains within it information about the lat/long of the forest of origination. The load hash is added to the pool of hashes available to the mill and is consumed, more or less at random, by the mill work order system as the mill’s fiber inventory is consumed. The process of consuming the load hash generates a new “finished product hash” that is then affixed to the finished product’s label much like a Chain of Custody certification number. The “finished product hash” from the primary manufacturer that is affixed to the finished product’s label like a Chain of Custody certificate number then becomes the “load hash” for the next customer down the line. So, for example, a pulp mill receiving a load of wood generates a hash for the wood, which is then consumed and becomes a work order hash, which then becomes a finished goods hash on the bale of pulp, which then becomes the raw material hash for the paper mill that purchased the pulp, which is then consumed by the paper mill and becomes a work order hash, which then becomes a finished goods hash on the roll of paper, etc etc. Because each of the hashes in the supply chain are recorded by the producing mill, the consuming mill and Catenaut’s blockchain server, we create a closely distributed ledger of accounts that, because the information is just thousands of hashes, is completely anonymous and secure. In addition, the distributed ledger aspect of the system eliminates any possibility of fraudulently misidentifying forests of origin or using incorrect Chain of Custody certification information. Another way to think about it is that, essentially, the GPS unit on the log truck generates a bit coin when the logs get delivered to the mill. Within this bit coin is the lat/long of the forest that was cut down to make it. The mill receives the bit coin from the logger and then uses it to make their product (pulp, paper, what have you). In the process of making the product, another bitcoin is created out of the bitcoins that were used, and this bitcoin is then passed on to the customer, who then uses it to make their products, etc etc. The only difference between our blockchain system and the real bitcoin system is that we are creating bitcoins by hashing a GPS signal instead of mining them; otherwise the rest of it pretty much works the same way. If you have any questions or would like to investigate creating a blockchain system for your needs please feel free to contact us at www.catenaut.com. Thanks : )