Coke and Blockchain

Tony Kappen - 1B Electrical and Computer
Posted on: March 25, 2018

If you bought shares of Bitcoin when it was still a couple of pennies (congratulations, by the way), then you probably have a fairly friendly outlook on the blockchain technology that makes Bitcoin work. Yet did you know that it can do more than letting you make a quick buck and live out your dreams of leaving school and traveling the world? Yes it can, in fact, be a powerful tool for fighting poverty and making the world a better place. Who knew?

For example, Coca-Cola—by partnering up with the US State Department and the cryptocurrency companies Bitfury Group and Emercoin—intends to use blockchain to combat forced labour within its production network. According to the International Labour Organization, almost 25 million people work in forced labour environments, with a large percentage of these people coming from Asia (47 %). Coca-cola and beverage companies like it have in recent years come under fire for failing to adequately protect the rights of the workers that harvest their sugarcane.

A large part of the problem is the presence and need for middlemen between the beverage company and the workers they need to harvest sugarcane. These middle companies are the ones that hire the workers and pay their salaries. The beverage companies must rely on these middle companies honouring their contracts with their workers.

This is where blockchain comes in. For those of you unfamiliar with the technology, blockchain consists of a distributed, decentralized, digital ledger that can keep track of transactions without the need for a central, arching entity like a bank (or in this case, the laborer’s employers).

Here is how Coco-Cola intends its system to work. Coca-Cola will provide the data in more than two dozen countries via its labor force. Meanwhile, the US State Department brings its experience in labor relations and protection to the table. Both Bitfury Group and Emercoin will be responsible for various aspects of building the blockchain technology that will log workers and their contracts into the registry. Lastly, the nonprofit Blockchain Trust Accelerator will use this opportunity to further the use of blockchain for social good.

What makes this system revolutionary is the presence of smart contracts, which were first used to create the Ethereum coin. Smart contracts are protocols that help with the verification, facilitation, or enforcement of a contract. In plainer English, and to be specific to the sugar supply chain workers included in this blockchain study, these smart contracts define the scope of work, pay, and employment period for these workers.

This essentially brings the work done in secret by middlemen into the open. The transparency in workers’ contracts allows their employers to be held accountable when they don’t keep their side of the bargain.

As this project is set to launch, it is also important to keep in mind some of its possible challenges. First of all, even though this provides transparency for workers and gives them control over their identities, it still relies on these workers having access to technology such as a smartphone to ensure that their contract was being followed by their employer. As most workers rarely have the disposable income needed to buy a smartphone, this might prevent workers from using this technology to their advantage.

Another huge test to this program will be in its ability to scale. Blockchain has proven successful in a few non-currency related projects, but it has yet to be tested in a large, 28 countrywide project like this one. What will happen when it is faced with the pressures of the real world remain to be seen.

At the end of the day, one can only wait and see how this project will improve the lives of workers around the world. At the very least, the next time you chug a bottle of packaged sugar water and special sauce, you can do it with the knowledge that it is now more likely to have been made ethically and beneficially to all those involved. Hopefully.

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