Blockchain: Serialization and Proof of Existence


Blockchain: Serialization and Proof of Existence

By Maurizio Greco, CTO, Chronicled

[This excerpt is taken from a blog Greco recently wrote that isn't specific to agriculture, but the parallels can be drawn fairly easily. See this link to read the full article, “Does Proof of Existence establish Provenance?”.]

Blockchain can deliver enormous value for enterprises. We are at the beginning of the journey and best practices need to be established. In this post, I talk about provenance, a problem that we might consider to solve with Proof of Existence, a popular blockchain-based primitive. I will also introduce a couple of alternative solutions to establishing provenance.

The language used for a problem statement might be misleading because it is formulated already from the point of view of a possible solution. As an example, I want to walk you through a problem that the regulator requires the supply chain of the pharmaceutical industry to solve.

The goal of the regulation is to enable instant verification of provenance of items and to prevent counterfeits from entering the supply chain. This regulation is called the Drug Supply Chain Security Act (DSCSA), which outlines steps to build an electronic, interoperable system to identify and trace prescription drugs. One of the early milestones of the regulation required the drug manufacturer to implement “serialization”: all produced units have a unique identifier, a serial number. The industry is now actively working on the next milestone, which is described as follows: “Verify the unique product identifier of returned products intended for resale.”

A large number of drugs are returned by pharmacies to distributors, which must verify the serial number of the drug before reselling it to another pharmacy or hospital. The industry has already identified solutions to this problem using technologies that do not require the blockchain. Such solutions involve the discovery of verification endpoints (e.g., an HTTP address) published by drug manufacturers that allow distributors to query a serial number to verify the existence of a serial number and its validity. However, the industry is struggling to bring all together on a common, standardized system. Many industry professionals shared the intuition that all the players can be brought together on a neutral blockchain-based ecosystem.

Reading again the problem statement together with the goal of finding a solution in the blockchain space, what really stands out is “serial number verification”. We have many players that need to collaborate, we need to establish truth and trust, and we need an integrated system accessible to the entire industry. The blockchain fits the bill. Further discussions with domain experts will reveal another important business requirement: the system cannot leak any business intelligence about the participants. Production volumes, transactions amongst trading partners, names of the trading partners and everything else must remain secret.

It is a pattern that we have already seen: we need to keep the serial numbers secret while we need to verify their existence. We just need to hash and store them on the blockchain. This is a use case for Proof of Existence!

Proof of Existence was one of the first blockchain use cases — if not the first — conceived after Bitcoin and built on top of the Bitcoin blockchain. This gave a glimpse of how the blockchain could have been used for use cases beyond Bitcoin. Proof of Existence (PoE) consists of hashing data (e.g., a computer file, a data string) and committing such hash on the blockchain in order to prove that such data existed without disclosing the actual data itself. The hash is a one-way function. There is no function to revert the hash value to the original value and the blockchain provides an immutable ledger which creates a tamper-proof timestamp of the hash. The hash and the blockchain timestamp combined together prove the existence of the data, data string, or document at a specific point in time.

Read the full blog here.