Efforts to bring blockchain into the real world got a significant boost after a Commonwealth Bank-led consortium used the distributed ledger technology to track 17 tonnes of Australian almonds being shipped internationally.

The almonds journeyed more than 16,100-kilometres from Sunraysia, Victoria to Hamburg, Germany.

CBA’s experiment saw the bank work with Internet of Things (IoT) specialist LX Group to facilitate a supply chain comprising almond producer Olam Orchards Australia; logistics intermediaries including rail operator Pacific National; port operator the Port of Melbourne; stevedore Patrick Terminals; and shipping provider OOCL Limited.

The companies participated in a purpose-built Ethereum blockchain that was designed to store a range of attributes about the shipment as it progressed through its journey.

These included logistical support – for example, bills of lading, certificates of origin and other customs documentation – as well as environmental quality measures taken by IoT devices that monitored the shipment as it travelled.

The resulting blockchain record attests not only to the contents and origin of the product, but all of the contractual conditions related to the trade and the condition of the stock when it arrived at its destination.

The origin of a product has become increasingly important as high quality goods are swapped out or replaced by counterfeits and passed off as the real thing.

Combining digital and physical

Successfully incorporating Blockchain into a real-world supply chain was a significant milestone for the technology, which has generally been used to track non-fungible virtual tokens such as Bitcoin and CryptoKitties.

Using a different class of blockchain known as ‘asset tokens’, Commonwealth Bank head of Blockchain Sophie Gilder said at FST Media’s recent Future of Financial Services conference that this had been a focus for CBA’s multi-pronged research efforts “because we’d like to build a bridge between the physical and the digital, using IoT devices to track the physical, whilst having a digital instance of that particular asset on a blockchain.”

“If you want to capture all of the operational flows around that, the IoT will tell you where it is,” she explained. “We think it will be a much more efficient method of managing physical assets in the digital world – increasing transparency and liquidity, and enhancing governance – because you can transfer the electronic title instantly.”

Although it relates to just one carefully contrived supply chain, the underlying mechanism of the CBA supply chain project is a step forward for efforts to adapt blockchain technology for enterprise uses.

In 2016, Australia was chosen to lead an international ISO committee for developing international blockchain standards.

That designation drove a fast-growing local community in which a raft of new blockchain-based start-ups – including diverse interests such as service-digitalisation firm Civic Ledger, cryptocurrency exchange platform Bit Trade, e-voting venture XO.1, blockchain venture capitalist Kosmos Capital, and initial coin offering (ICO) venture-capitalist Mayfair 101 – have rushed to develop the technology in different ways.

“It’s like the beginning of the Internet in that everyone wants to be on it,” said Karen Cohen, general manager of the Melbourne-based blockchain Centre, a shared working and educational centre that is helping blockchain start-ups find their footing.

It’s too early in the market to worry about competitive forces, she continued, noting that the support of a large entity like the CBA would be critical in helping blockchain solidify its legitimacy in enterprise applications.

“People are looking at all of their technologies and trying to work out the fastest, safest, least complex way to get on the blockchain,” she explained.

“It’s easiest right now for someone with the weight of a bank behind them, but it will get easier as there are more players, and smaller players, moving into the market.”

Local blockchain start-ups have good company: recent months have seen an explosion in Blockchain ventures as IBM’s work with ‘stablecoin’, Oracle’s release of its Oracle Blockchain Cloud service, and the Singapore-based NEM Foundation’s $100m establishment of Blockchain centres of excellence in Brisbane and Westport, New Zealand.

Still very early days

Industry may be throwing big money at blockchain – and successes such as the Department of Health’s recent ‘data diode’ success are paying off for some – but Gartner recently offered a reality check on the technology, which has become massively hyped based on the explosion of Bitcoin.

Just 1% of enterprises in a Gartner survey said they had already invested and deployed in blockchain, with 8% in short-term planning or actively experimenting with it.

Fully 77% of companies had no interest or no action planned regarding the technology.

David Furlonger, vice president and Gartner Fellow, warned in a statement that companies must be prudent in building strategies based on the “massively hyped” technology – taking time to evaluate deployments of the technology before they make “rash decisions”, waste their investments, or potentially reject a “game-changing technology” before its prime.

Gartner has separately predicted that blockchain will cross through the ‘trough of disillusionment’ in 2024, with the technology reportedly delivering $US176 billion ($A231b) in business value by 2025 and $US3.1 trillion ($A4.1t) by 2030.