Why is proof of location important for digital assets?

AgriDigital has partnered with Kiersten Jowett from the Lay of the Land to present to you a fun and engaging interview with the brilliant Emma Weston.

Listen in as Emma talks about her background, proof of location, blockchain & more!


Listen in to the full conversation:

Read the full transcript:

Kiersten Jowett: How important is location for your business?
Emma Weston: It’s completely fundamental to what we do because if we don’t know where an asset is at any point in time, it may as well not exist…. to be frank.

Kiersten Jowett: Hi, my name is Kiersten Jowett. I’m a Proof of Location Specialist and I’m your host for Lay of the Land. My guest today is Emma Weston, CEO and Co-founder of AgriDigital. Welcome, Emma.
Emma Weston: Thanks for having me, Kiersten.

Kiersten Jowett: Your background is fascinating. It’s in AgTech and also as an entrepreneur. When did you see the connection between your different experiences and first think about AgriDigital?
Emma Weston: I guess that I’ve had throughout my career an intersection with agriculture. I really haven’t really varied that much. Although I started off life as a lawyer, very quickly after becoming admitted as a lawyer I moved into Agribusiness as a lawyer but really found that I had an affinity and a love for agriculture and for the people that were involved in agriculture. So, my whole career has really been spent interfacing into the agricultural supply chain into the farming sector. In the latter part of my career, really in the past 10 years or so, that’s been involved with my own businesses either as a founder or as a co-founder.

Kiersten Jowett: Has there been a common thread or consistent lesson that you have been able to take away from your different entrepreneurial experiences and your background in law that have informed you in your work at AgriDigital?
Emma Weston: Well, I think the common thread is probably one that many entrepreneurs talk to and that is the importance of building a great team. “We” that’s being my co-founders and me, knew from the start that we didn’t have all of the skills, all of the knowledge that was required to complete the mission at AgriDigital. So, we knew that we had together fantastic people around us who were passionate about purpose as well. And I think that’s been something that’s been pretty common throughout my whole career is surrounding myself with good people. I think I’m actually quite good at finding people that have a common mission to me. To really want to work hard to solve the problems in the agricultural sector.

Kiersten Jowett: That’s really wise advice for anyone building something new!
Emma Weston: Well, I think that you can’t do it alone, right? So, anybody who thinks that they’re going to be able to solve some of these really tricky problems, particularly when we’re talking about supply chain, there are just so many moving parts. But I do think that the other thing that’s really important is domain knowledge. I don’t think you can come to the problems that are in the supply chain without actually having understood in a really intimate way how supply chain works and that probably means either having worked in supply chain or have been, you know, in some way deeply entrenched either as a participant or you know, as a very, very close bystander. So just coming from technology I don’t think is enough.

Kiersten Jowett: Yeah, I can see your point. So you need to know how all the cogs work in the engine. Exactly. At least at least have some exposure to that.
Emma Weston: Exactly and particularly if you want to build that team around you, you need to know where to source that skill set.

Kiersten Jowett: So how is this engine working? How is it built? What is AgriDigital doing?
Emma Weston: It’s a great question. So maybe I’ll talk a little bit to the genesis of AgriDigital and those of your listeners who don’t know who we are and what we do. So I’ve got two co-founders, Bob McKay and Ben Reid. We’re all farmers as well and collectively, the three of us have, we actually get a little bit embarrassed about this, we’ve got so many grey hairs in this industry, we’ve got about 85 years of collective experience in the agricultural supply chain, as farmers but also as traders, logistics, export, you know, you name it. We’ve really worked across the gamut of the agricultural supply chain and we had the privilege to build businesses previously that we were able to exit successfully and then have another chance to have a look at global agri-supply chain and say, you know, from a blank sheet of paper, what would we want to work on, what problems will you want to solve if we could.

Emma Weston: And that was really the genesis for AgriDigital. So at AgriDigital we’re really focused around three core problems and that is payment security for sellers in the supply chain. We start with the farmer, of course, we really want to make sure that the farmer gets paid for what they deliver when they deliver, and we want to remove that counterparty risk for sellers in the supply chain, but we realized that particular problem is really connected to the access that buyers of goods in our supply chain have to supply chain finance that can be delivered on a just-in-time, convenient basis and in a way that comes with their supply chain transactions. We can dig into this a little bit further, but effectively in the supply chain, trade flow and finance flow is completely different at the moment and our vision is to bring it together.

Emma Weston: So there are two of the problems that were really focused on and the third one is being able to solve for the massive amounts of data fragmentation that exists. I mean, we have massive amounts of data across supply chain but it’s just completely fragmented or siloed and we don’t know how to pull it together into a cohesive whole that’s meaningful at any point. Whether it’s a transaction point or it’s a participant looking in and saying, I want to know something about my food, my fuel, my fibre, where it’s come from, how it’s being produced, how it’s been transported, where is it, which has really topical for the conversation we’re having today. So we’ve built out a commodity management platform that delivers on all three of those. It really works into the space of transaction and payment security because it’s a transactional engine for the movement of a physical commodity through the supply chain. It has embedded supply chain finance and then obviously collates aggregates and represents data about that physical good as it moves through the supply chain.

Kiersten Jowett: Wonderful. Can you tell us why blockchain?
Emma Weston: Yeah, it’s a really good question. The reason that I came to blockchain was that I was looking at these three problems and saying, is there some kind of emerging tech that is going to help us? Either unpack those problems so that we can understand their component parts better or obviously look to solve for that and you know, this was in 2015. Blockchain was starting to get pretty topical and move away from being associated purely with Bitcoin to standing in its own right as a technology. It also was starting to emerge as a philosophical concept, I guess for looking at distributed systems and supply chain is a perfect example of a distributed system where you have many actors who don’t know each other, who do not operate on a basis of trust but are in relationship and fundamental relationship payment, value exchange and so forth with each other and therefore they need to have some kind of underlying thread or record system that reconciles that relationship and that transaction space and that’s really how I came to blockchain.

Kiersten Jowett: Okay. That’s what you saw was missing and that blockchain could solve that.
Emma Weston: That’s the question I asked myself. I didn’t kind of just accept that a blockchain was the answer and really even now I see blockchain as being a tool in our toolkit. It’s not a silver bullet in and of itself but it opens up possibilities for us to be solving those problems and offering a more secure, safe and I think ultimately an easier supply chain to participate in.

Kiersten Jowett: That’s great. I’m sure that’s what people want and, and the visibility and the transparency that comes with that.
Emma Weston: Some people do Kiersten. I don’t think everybody wants transparency. That’s one of the challenges.

Kiersten Jowett: Oh, interesting. And now that gets interesting. Who wouldn’t want it?
Emma Weston: Well, if we think about traders, most traders have evolved through having access to information that no one else has access to and be able to create profitable trades or exchanges of value on that basis. And that’s really what arbitrage is. And so they look for opportunities to take advantage of early-stage information or have insights that others may not have. And so for some traders transparency is going to be quite challenging I think, and sort of in many ways challenge the traditional trading model.

Kiersten Jowett: Is it better for customers in the end?
Emma Weston: I think it’s better for everybody in the end, even traders and I think that they’ll come to see that as well, that they can be more efficient because they’ll have better access to accurate information and they’ll have reliable data sets that they’re working with that auto reconcile into a ledger that is replicated across their relationship base and they’re trading base. So I think everyone will see in the long term that this is actually to their benefit.

Kiersten Jowett: So, can you talk about the different areas of business that AgriDigital touches? So it touches traders, farmers and storage facilities?
Emma Weston: Exactly, you’ve got it. So our primary customers at the moment are the first handler of the commodity and we’re really focused on grains — so all grains, wheat, barley, Durham, oats, whatever it may be and also cotton.
Emma Weston: We really come in at the point where the first buyer or the first handler of grain interacts with that physical asset. So that’s typically a farmer selling to a buyer or a farmer delivering into a storage operator or an elevator as it’s called in North America.

Kiersten Jowett: Thanks and we’re starting to move into the physical part of your work. How important is location for your business?
Emma Weston: It’s completely fundamental to what we do because if we don’t know where an asset is at any point in time, it may as well not exist… to be frank. We have to know where physical assets are in order for them to have a value. Believe it or not, grain does not have the same value all over Australia. It depends upon where it’s located, it depends upon the quality of the grain, depends upon the season. There’s a whole lot of variables, but location is fundamental both in terms of origin as well as destination and the ability to track and trace between the two and also to be able to at any point in time value that good. So it’s an absolutely fundamental part of the puzzle.

Kiersten Jowett: Wow. I had no idea that its value changes with location. Why is that?
Emma Weston: So if we think about grain stored on your farm, and we think about, I’m based in Sydney, Australia, but let’s think about a typical farm either in North America or Australia. In fact, I’m quite often that psalm is quite far away from a port or from a consumption point, so either an export point or a consumption point and in order for it to be worth something to a buyer, it actually needs to move through the supply chain. So, logistically that physical commodity has to move from the farm gate down to port or to the consumption point. And there’s a difference in value which is based upon the price at the farm gate, plus the logistical movement plus where buyers are bidding for that grain in a competitive draw zone. And so the price will change for those sort of factors.

Kiersten Jowett: I see. Okay. And right now, how do you prove the location of grain?
Emma Weston: Right now it’s basically done through a mechanism of recording a delivery at a particular site and so it’s in within the transactional platform itself, such as AgrriDigital or a similar transactional platform and that’s largely done through human data entry. So I’m really in some ways what we’re seeing is this is an assertion that has been made, that grain has been delivered into a particular location and it hasn’t been moved from that location. The proving up of that hasn’t been done historically in our supply chains.

Kiersten Jowett: So right now it’s just trusting the receiver of the grain to put the data into the system?
Emma Weston: That’s correct. So what we do at AgriDigital is wherever we can. We integrate with the scale or the weighbridge and when the truck delivering that green crosses over the weighbridge, we then create a digital asset in our system and that digital asset can be recorded on a chain as well, and that then becomes the asset itself. Location is part and parcel of that information set that sits with the asset and that moves with the asset. So geolocation and you know, kind of a lat/long view of the world is really important.

Kiersten Jowett: It adds to the identity of the grain?
Emma Weston: It does.

Kiersten Jowett: And the value?
Emma Weston: Yep, absolutely and that is fundamental when we’re looking at that second problem that I talked around supply chain finance because no financier should really finance something that they don’t know where it is. First of all, they should know what their financing that they should know, where that asset is that are financing and that they should be able to track that in real time and that’s not available in the supply chain at the moment and that’s part of the mission that we have is to open up the underlying value of the assets so that any asset holder can actually achieve and get access to cash flow or some other form of borrowing on the basis of the asset itself.

Kiersten Jowett: Yeah, that’s really interesting! There’s a lot of protocols right now that are suggesting that they will be able to have other witnesses besides let’s say the receiver of the grain, other witnesses along the supply chain witnessing the trucks moving through different zones with that grain and then eventually arriving at the location. Is that something you would do an experiment with at some point?
Emma Weston: Yeah, absolutely! We’re really interested in physical monitoring. So, whether that’s static monitoring it site or it’s moving through Geolocation beacons at different points upon a transit, there’s a number of different solutions that are being looked at. We’re yet to see which one is the most cost-effective, I guess, you know, because it’s, it’s the very early stages, but we’re definitely interested in particularly looking at once a digital asset has been created, which for us is on the delivery to an elevator, at that point, how do we track and trace that asset through the supply chain and how do we make that information available to those who need to know.

Kiersten Jowett: Great. That sounds like a very valuable experiment.
Emma Weston: With that type of experiment of knowing where an asset is at any point in time. And so proof of services for us are really important in terms of proof of location, proof of quality. The two of them are really fundamental in and proof of quantity of course. But those three components are really what determines the value of the asset. And so in order to direct supply chain, we need to understand what the value is of that asset at any point in time so that we can finance that, we can ensure it, we can build, you know, risk management products and services that cater to the needs of the participants. So they can either get further down the supply chain and they are at the moment or so that they can participate in new markets.

Kiersten Jowett: Oh Great. So you’re enabling the farmers to broaden their opportunity?
Emma Weston: Absolutely! There’s the first funding that we did in market this year was with cotton farmers and we were enabling the cotton farmer to instead of having to make a sale decision for their cotton up country, before the gin, to finance them all the way through to the export point. And in order to do that we had to be able to track and trace those bales and know where they were at any point in time, as the financier, because we don’t just provide the transactional platform, we also provide the supply chain finance with that transactional platform. As the financier, that’s just fundamental to our risk management model.

Kiersten Jowett: And if you don’t mind me getting a little bit techie at the moment, I’m doing a proof of concept with wool working with a designer and a property to trace the origin of single origin wool for the farm to fashion. Can you talk a little bit about the bales and how you actually track them? Is there some sort of technology? Do you use RFID or…?
Emma Weston: Yeah, so for each bale is given a bail number and were able to effectively record that bell number as it goes through key location points or key transaction points in the supply chain. And that enables us to build up a model of where that bale has come from and to ensure that we’ve maintained integrity all the way through the supply chain to the destination point. That’s a fairly crude way of doing it. It fits with the physical supply chains such as it exists at the moment, but we’re seeing a lot of innovation in the tracking or in the physical monitoring space. Right down to DNA analysis and being able to undertake DNA analysis at key points within the supply chain or it could be, as you said, I’m more simple methods such as RFID, uh, or some form of tagging system or labelling system

Kiersten Jowett: So when you need stronger proof about an asset, you need DNA, but I suppose you can just dial up and dial down how much information you need?
Emma Weston: I think it depends on upon the requirements of the supply chain and ultimately probably off the consumer. So you know, what we might want to do with respect to diamonds could be very different from our expectations with respect to grain that turns into bread. We’re going to have different types of data validation and verification models and different services and costs of service for certification at different points in the supply chain. And I think this ultimately is going to be market driven.

Kiersten Jowett: Yeah. So it’s what the market wants, what it needs.
Emma Weston: Absolutely. I don’t think it’s going to be, you know, here is the best practice for supply chain management and proof of location or proof of services and we’re going to apply that to every single good in the supply chain. That just probably is not going to make economic sense.

Kiersten Jowett: I’m kind of interested in that then. So you think that maybe standards I was going to ask you if you feel that you’re making standards or you’re following standards. I would suggest you’re making standards, but what is your answer?
Emma Weston: Yeah, I think it’s a really good question. I think that we would love to be in some ways being able to, implement standards, but the reality is in many of these areas there are no standards or there is no cohesive approach to how to create a digital asset, in particular, that’s a representation of a physical asset. What type of data we attached to that digital asset, so how we make it data-rich, how we maintain and permission into that data and what we do with that digital asset through its life in the supply chain. So when we’re thinking about creation, transformation transmission, and the extinguishment of an asset in the supply chain, these are in effect new standards that we are creating, probably drawn from best practice examples across other supply chains, but we’re just implementing them in digital form and on chain for the first time.

Kiersten Jowett: Okay. And do you think… so, there’s nothing globally, no ISO standards for you to follow?
Emma Weston: There are ISO standards for supply chain and there are obviously emerging standards for blockchain that are being developed at the moment as you’d be well aware. Um, but with respect to thinking about digital assets themselves and how we create digital assets and how we create and validate data with respect to that digital asset, this is really a new field.

Kiersten Jowett: So, do you feel that you’re forging a path that others can follow?
Emma Weston: I hope so. I hope so. Part of our strategy is not to do this alone. So we’ve obviously accumulated at AgriDigital, a wealth of experience over the past three years and we’re direct practitioners, you know, with respect to, with respect to blockchain, but also the application environment that sits on top of the blockchain and is the access point for users and what we’ve decided to do is to take that blockchain, intellectual property and experience and transfer that across to a foundation so that we can open source that to the wider market because I think that is the way that we’re going to see not just adoption but, but proliferation of this technology and I think it’s much more valuable in the hands of many than in the hands of only a few.

Kiersten Jowett: Wow. When you say wider adoption, do you mean other companies in the grain industry or do you mean really wide?
Emma Weston: I guess I mean really wide. So we have created a commercial protocol, uh, for the trade finance and traceability of agri-commodities. But we’ve tried to do that in a way that can effectively be a standard for any type of commodity and any type of supply chain, be it niche, or abroad. So we’ve had approaches from the oil and gas industry, from the metals industry, but also from very niche industries like the Pearl Industry, the Tapioca Industry in Thailand.

Kiersten Jowett: Oh my gosh, wow!
Emma Weston: Yeah, a number of industries that, and I was saying at the beginning we were having this conversation about the importance of domain expertise, and what we realized is we don’t have and we’re never going to have domain expertise in this, you know, in this global marketplace. Therefore what we can do is create a really simple way of accessing blockchain for those who can see the benefits and we can help with onboarding and you know, doing that will enable a new community of users beyond just the market we’ve been working in grain and cotton, but also just beyond technology companies and developers and out to the broader user.

Kiersten Jowett: Wow. That’s so exciting. What’s the roadmap for this vision and the timeline for other participants to follow in your footsteps?

Emma Weston: So the protocol we’re calling GEORA, so that’s g-e-o-r-a and we just finished the MVP on Friday actually. So that was very exciting.

Kiersten Jowett: Congratulations!
Emma Weston: I know it’s been a really huge effort by the team. So we’re obviously going into a heavy test phase now for release one and starting prepare for release one. So we should see that in the new year and we have a really great pipeline of large and small companies and projects wanting to road test this out. So I’d say 2019 for GEORA will be, very much, assisted onboarding of new companies and projects and getting a lot of feedback on the protocol. Hopefully, it’s very easy to use and you know, that’s the way it’s being designed, but we’re really interested in obviously putting it into the wild and, and see what happens. There’s a single API layer so actually, anybody could onboard themselves but they may need some assistance. We recognize that. So that’s kind of on the blockchain protocol side. But then if we think about AgriDigital, where we really are going to play is to be the best application, uh, for interfacing into a protocol like GEORA and ultimately into the blockchain. And so as the CEO of AgriDigital, I’ll be focusing on ensuring that we have a really complete product as well as tech stack from the application layer above. I see our role as opening up the user interface, uh, to the blockchain or to the digitisation of supply chain and that’s what we’ll be focusing on over the next 18 months. We’ll be continuing the work we’ve done in Australia, but were a growing into North America and so we’ll be establishing an office over there and once again, working with farmers, buyers and elevators to undertake digitalization of supply chain. And then to look at how that interfaces into the blockchain.

Kiersten Jowett: Oh, that’s really exciting!
Emma Weston: It is exciting.

Kiersten Jowett: And what blockchain are you using? And is it permissioned or permissionless?
Emma Weston: So we’ve been working mainly with Ethereum or Ethereum deviants, so forked versions of Ethereum. One of the most successful areas of application for us has been with Quorum, which is a JP Morgan built blockchain. It is permissioned. The vision that we have is that we would be able to achieve and move over to a public chain in time. But we need to solve for some of the key aspects around privacy, confidentiality and an appropriate consensus model that enables, a scaling of transactions that works for this supply chain market and so we need a reasonable ability to achieve volume, um, and we just not quite there yet technically as well as commercially with a public chain Ethereum. But I remain hopeful.
Kiersten Jowett: Yeah. It sounds like a lot of the standard problems that applications are grappling with at the moment.

Emma Weston: Yeah, absolutely. I know we’re not alone in that and we certainly want to keep contributing to not only the debate around what we should be building and, and what we should be prioritising but obviously contributing to the build itself. And that’s also one of the reasons for putting the GEORA protocol into a foundation so that we can have a more open contribution than what we’ve been able to do to date in AgriDigital. But we have to acknowledge that there is some way to go and we’re all going to have to pull together and think about the way that we can iterate to get where we need to go. Um, because it’s not going to be a complete shift from the current world to the new world. We’re going to have to, you know, we’re going to have to think about the steps and the stages to get there.

Kiersten Jowett: It takes time and careful planning and implementation.
Emma Weston: It does. And we need to see successes, you know, we need to see small wins along the way. This is, you know, we’re dealing with real things, real money, real people, real livelihoods, and they need to be convinced that in order for them to rely on this technology as an underlying piece of infrastructure, that key aspects such as privacy, such as, uh, the way that data enters the chain, such as how they can off-ramp if it’s no longer appropriate, such as legal and regulatory issues, that all of those types of challenges are being advanced if not completely solved for at least being addressed and advanced.

Kiersten Jowett: Yeah. You’ve got your work cut out for you in the next year with AgriDigital and GEORA. Sounds like you have a tight roadmap. What about the next five years? How do you see your businesses and proof of location in an ideal world in five years?
Emma Weston: I’d like to think that in some ways we’re not talking about blockchain anymore. I’d like to think that it’s become a recessive technology and instead we’re talking about the services that have been enabled through the implementation of blockchain and these are services like proof of location, like plug and play consensus models, for example. So you know, five years from now I hope that the GEORA protocol has been completely set free and is, you know, a community-based protocol which has high utility for supply chain across not just grains and cotton, but the broader supply chain environment, even out of agri. From an AgriDigital perspective, I would like to think that we’ve been able to complete our mission with respect to making the grains supply chain, in particular, digitized all the way from the farmer through to the consumer. And that means that we’ve been able to provide transactional services for a commodity to move all the way through the supply chain to be able to finance all the way through. And fundamentally that means we need to know where that asset is at any point in time on a live basis, and to have cost-effective solutions in place to do that.

Kiersten Jowett: Brilliant. That sounds fantastic. And where can people go to find out more about your work?
Emma Weston: I love people to contact us. You know, as I said, I love building a team and I’m really passionate about the community. So if anybody’s interested in what we’re doing or they think that they can help in any way, please feel free to contact us at Agridigital.io. So, that’s A-g-r-i digital, all one word “.io” or reach out to me on twitter. I’m at Emma M Weston; E-m-m-a-M — W-e-s-t-o-n on Twitter. I’d love to hear from you.

Kiersten Jowett: Thanks, Emma. That’s fantastic.
Emma Weston: Thanks so much, Kiersten. I’ve really enjoyed chatting.

Kiersten Jowett: Yeah, it’s good to have you on today and hear more about AgriDigital on your plans for the future. Good luck!
Emma Weston: Well, I’m loving the podcast. So, thanks so much for putting this out there. I think it’s really important to talk about specifics around location. It’s just going to be a fundamental piece of the, of the landscape going forward, so I think it’s really important.

Kiersten Jowett: Thanks, Emma.
Emma Weston: Thanks, Kiersten.

Kiersten Jowett: This podcast is not financial advice. You should consider seeking independent legal financial taxation and other advice to check how this podcast relates to your unique circumstances. The makers of this podcast are not liable for any loss caused, whether due to negligence or otherwise arising from the use of or reliance on information provided directly or indirectly in this podcast. The mention of any company, currency, exchange, or person is not an endorsement of that entity.
Kiersten Jowett: See you next time on the Lay of The Land.