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  • 05.08.15

How Bitcoin’s Technology Could Soon Shed Light On How Products Are Made

The same tech that prevents fraud with Bitcoin also can provide a chain of custody for products.

How Bitcoin’s Technology Could Soon Shed Light On How Products Are Made
[Illustration: Ron Dale via Shutterstock]

When shopping online or at the mall, it’s easy to figure out a product’s price and the basic materials from which it’s made. It’s much harder to find out where it came from and how it was produced. Filling that information gap is the goal of a startup called Provenance, and it’s using the technology that underpins Bitcoin to do it.

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“We are a software company. We don’t sell any products, we’re not a certifier or anything. Our real mission is transmitting information,” says founder Jessi Baker, a 30-year-old who has a background in manufacturing, design, and engineering.


Many companies are working to clean up their supply chains today–or at least be more open about them. Intel is ridding its chips of conflict minerals. Unilever won’t use rainforest-destroying palm oil. More and more, clothing manufacturers are promising strict standards for working conditions in their foreign factories. These are pledges often spurred by activists, socially-responsible investors, and, in some cases, regulators, as well as the growing number of ethically-minded consumers who care about how their purchases are sourced.

Baker, who finished her PhD at the University of Cambridge (sponsored through a fellowship from Intel), believes there’s a need for a more independent, easy-to-use system for companies to transmit details about their supply chains, as well as better ways for consumers to learn the stories behind the products they buy, especially when shopping online.

With Provenance, she is building software that will help progressive companies gain a competitive edge by sharing the processes and materials that go into their products. The site will look friendly, with photos and text where consumers can track, for example, how their t-shirt was made, from cotton field to freighter ship to store shelf. Companies that use it will be able to embed the stories into their product sales pages.

The interesting piece of the platform is on the backend. The stories won’t just be the glossy marketing materials that are provided by the company trying to sell the product or centralized databases maintained by an industry group. Nor will they be obscure third-party certifications that are not transparent themselves (and often confusing to consumers).

Provenance’s approach is different. The system is built on Bitcoin’s blockchain technology, the main innovation that allows the decentralized cryptocurrency to function. Before Bitcoin, digital records were easily copied and open to fraud (that’s why a digital currency couldn’t exist). A blockchain creates a public ledger that tracks each transaction in a linear, chronological order–each computer on the network has a copy of the transaction database, so fraud isn’t possible.

In the Bitcoin context, this applies to digital money changing hands. But working with a kind of Bitcoin 2.0 collective in the U.K. called Ethereum, Provenance is taking the underlying idea and applying it to mapping how a product is made. Each player in the supply chain, whether a farmer, a mining company, a factory owner, or a consumer brand, can register an account, creating a unique identity on the network. The system then create a chain of custody of sorts, where each player verifies its role in the creation of the product.

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“Think of it as a reputation system,” says Jutta Steiner, a mathematician who is the COO of Provenance and is involved in the Etherium project. “It’s what would work in a small town if you know everyone who is a part of the supply chain. This enables us to facilitate transparency without [Provenance] having to become an all-powerful central actor.”

The Provenance system obviously is all voluntary and relies on a company’s desire to be more transparent. A firm that doesn’t want to participate won’t (There will also be an option for any player in a particular supply chain to remain anonymous, so a company can report part of its supply chain publicly and part internal.) Still, Baker thinks more and more companies are interested in this trend. Already, several small businesses in the UK are participating in a beta period, such as the eyewear company Kite and the jewelers McCaul Goldsmiths. As Provenance builds out its platform and aims for a bigger launch this Spring, it hopes to sign on much larger firms with more complex products.

Provenance is not the only firm that sees the potential of the Bitcoin protocol to be used for non-financial applications. The wine collectors blog Vinfolio published a recent article detailing how bitcoin technology could revolutionize ownership records for very high-end collectors bottles. The Ethereum collective is working on a much larger idea: creating a truly decentralized Internet that cannot be censored or monitored. Fred Wilson, a prominent venture capitalist, believes that non-Bitcoin blockchain applications will be major investment opportunities in the future.

Baker envisions a future where it is as easy to see the story behind a product as it is the price tag. “The sort of systems and data handling going on in supply chains is far from cutting edge,” she says. “It’s definitely ripe for disruption.”

About the author

Jessica Leber is a staff editor and writer for Fast Company's Co.Exist. Previously, she was a business reporter for MIT’s Technology Review and an environmental reporter at ClimateWire.

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