Maybe you remember that old high school cheer, “Two bits, four bits, six bits, a dollar, all for (your school) stand up and holler!” If you don’t remember it, you’re either too young or I’m too old, but take my word for it. A bit in those days equaled 12.5 cents. Now a bit — as in bitcoin — has equaled as much as $64,824 this past April. Holy cow!

After trying to absorb what in the world this 2008 cryptocurrency invention called "bitcoin" is, blockchain enters the picture. Its technology was created in 1991 but was first used in 2009. These two, bitcoin and blockchain, are inextricably linked and have become a ubiquitous part of the financial lexicon, but can they be used effectively in the meat and poultry industry?

Maybe these two terms, bitcoin and blockchain, roll off your tongue with ease, but for me they are a bit (no pun intended) cloudy, and frankly a mystery.

I decided to try to find out more about them, get my head wrapped around how they are used (and abused) and what application there is, if any, for them in our meat and poultry industry.

Researching and studying these two terms, bitcoin and blockchain, I found the following definitions:

Blockchain — is a growing list of records, called blocks, that are linked together using cryptography. Each block contains a cryptographic hash or function of the previous block, a timestamp, and transaction data. Cryptographic simply means a way of writing something such that others can’t figure out what you are saying.
Blocks — hold batches of valid transactions that are hashed and encoded. Each block includes the cryptographic hash of the prior block in the blockchain linking the two. This iterative process confirms the integrity of the previous block all the way back to the initial block.
Bitcoin — is an electronic payment system that would eliminate the need for any central authority while ensuring secure, verifiable transactions or a new form of currency.

How can bitcoins and blockchains be used in the meat and poultry industry? It has been suggested that they can help solve that old nemesis, food source traceability. How so? With the building of the blocks at various points along the distribution chain, meat and poultry products could be tracked from their origins to stores and restaurants.

The ability to trace such products has never been completely embraced by consumers and certainly not producers. So, does blockchain technology solve a problem that doesn’t exist, at least for the meat and poultry industry? As for other foods, Walmart and IBM, using cloud technology, ran a trial of a blockchain-backed system for a supply chain of lettuce and spinach. How did it work? It’s still in process. One cited benefit of the blockchain system is that it could enable rapid tracing of contaminated produce, and extending that to meat and poultry for recallable products.

A caveat is important here. Are consumers really that interested in the traceback capability? We keep hearing that consumer want to know about the origins of their meat and poultry products. But are they clamoring for that information, or would it be nice-to-have — but not too terribly important — to know?

Another drawback to blockchain mining, which is the peer-to-peer computer computations by which transactions are validated and verified, is that it requires a significant amount of energy. One bitcoin transaction requires about 707.6 kilowatt-hours of electrical energy, the amount of energy the average U.S. household consumes in 24 days. Treasury Secretary Janet Yellin called bitcoin, “an extremely inefficient way to conduct transactions.” Even Bill Gates says that “bitcoin uses more electricity per transaction than any other method known to mankind, so it’s not a great climate thing.” But who listens to Bill Gates anymore (right, Melinda)?

Now you know a little about what bitcoins and blockchains are, so you can answer any question that references them the next time you take the SAT or LSAT or wax eloquently during your neighborhood cocktail party.

Although I hate to pooh-pooh any new technology, even one that may help leapfrog the meat and poultry industry, my conclusion is that the application of bitcoins and blockchains may be proven efficient, but their usefulness for our final meat and poultry arbiter, the consumer, may not be desired.

Bitcoin and blockchain — say what?

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