Can Blockchain Improve the Dietary Supplement Industry Transparency?
You may have heard the term “blockchain” before, but you may not know what it is or how it can improve your life. Blockchain is an online ledger that automatically records and shares information across networks of computers without a central authority. It allows for high levels of transparency and trust among users, especially in industries where these qualities are lacking.
That’s where blockchain comes in. By providing a decentralized system for managing data, blockchain improves transparency by allowing users to see who owns any given piece of information.
With that knowledge at hand, consumers can make better-informed decisions about their purchases and ensure that they’re supporting ethical companies through their purchases. It can mean buying food from sustainable farmers or investing in companies with good environmental practices.
What is Blockchain?
The blockchain is a distributed ledger technology (DLT) that gets managed by a network of computers rather than a centralized authority. In this case, the network of computers gets referred to as nodes that get distributed around the world. When you make a transaction on the blockchain, it gets stored in blocks and then added to an immutable chain.
This sounds pretty familiar, right? It should because this is exactly how cryptocurrencies like bitcoin work! They also use DLTs to track their transactions and create trust between users. So why can’t we apply this same technology to our dietary supplement industry? Let’s find out!
How Blockchain Improves the Dietary Supplement Industry?
The blockchain is a distributed database. It’s the technology that allows bitcoin to be a decentralized currency, and it can be used in many other ways. And that makes it extremely valuable for the dietary supplement industry.
The blockchain has certain features that make it ideal for storing information on dietary supplements, including:
The blockchain creates an immutable record of transactions. Once information gets added to the ledger, it cannot get deleted or altered without leaving proof of tampering (that’s why people use blockchains for cryptocurrency).
If a company wanted to lie about what ingredients are in their products, they would have to do so publicly and openly. A practice no company would want to be associated with its brand image!
The Current State
The dietary supplement industry is a multi-billion dollar market. Unfortunately, this also means there are many problems with the current system. Dietary supplements do not regulate like drugs, which means they can get mislabeled or contain dangerous ingredients.
They can also be sold illegally and contaminated by third parties who may not follow the same health standards as the company selling them. The lack of transparency in this industry has been a major cause of concern for consumers lately—and rightfully so!
In 2021, 80% of Americans used dietary supplements (and millions more around the world).
Benefits of Blockchain for the Industry
- Blockchain provides a solution to the poor transparency in the dietary supplement industry.
- It allows consumers to track the journey of their dietary supplement from its source to their shelf.
- This increased trust between manufacturers and consumers leads to greater sales as well as brand loyalty.
- It also makes it easier for consumers to verify that their dietary supplements are authentic or not (by looking up the origin of ingredients).
Top Challenges of Implementing Blockchain
The promise of blockchain technology is clear. It will help overcome several challenges before it can get implemented in the dietary supplement industry.
The first challenge is cost. While blockchain technology has been an economical way to share data, it does come at a cost. The decentralized nature of blockchains requires all participants (in this case, manufacturers and suppliers) to maintain their copies of information and transaction history on their computers.
You can check this cost by looking at the crypto markets. The popularity drives many to join the craze and thus creating blockchain use. Polkadot is a relatively new currency that uses this technology. You can learn more about Polkadot and make an informed decision when you look for an answer to the question – “how to buy Polkadot?”
It drives numerous support from the tech perspective. It means that not only do you have to buy expensive hardware for these purposes, but you also need trained developers who can handle the programming work required.
Another challenge is integrating blockchain into existing systems. A task that isn’t always easy or possible due to technological limitations or regulatory restrictions on data sharing across different platforms (e.g., pharmaceutical manufacturers).
In addition, there is still no standard set for how blockchains should function within industries like health care. Therefore, each organization needs its system with its own rules for governance and compliance. It requires even more time investment from both parties involved!
To overcome these challenges we recommend:
- Educating consumers about what exactly “blockchain” means
- Working with regulators who understand how this technology works so they can develop appropriate rules around using it
- Having skilled developers build out new applications using open source code available online
- Collaborating with other companies sharing similar goals so everyone isn’t reinventing wheels together
Barrier to Adoption
Despite the potential benefits of blockchain technology, there are several barriers to adoption in this industry.
- Lack of awareness: Blockchain is still a relatively new concept and most people don’t know what it is or how it works.
- Regulatory uncertainty: Most countries have regulations for food safety and quality control but not for dietary supplements.
Blockchain technology can help improve the transparency of the supply chain for dietary supplements, but it’s not a cure-all. Blockchain technology could provide benefits such as:
Improving trust and safety across the supply chain by recording every transaction in an immutable ledger. Reducing costs by making audits more efficient. The technology allows multiple parties to review transactions at once without a physical meeting or sharing documents from different sources, which would take up time and resources.
Improving efficiency by tracking all data related to a product throughout every stage of production, shipping, or consumption. Updating that information instantly so stakeholders can access it as needed via smartphone app or web portal.