Major industries in New Zealand including e-commerce, logistics, and information technology have started to adopt blockchain technology to secure and process data in a decentralized manner.

In March, New Zealand Post and multi-billion dollar dairy conglomerate Fonterra entered into a strategic partnership with Alibaba, the Chinese e-commerce giant, to utilize blockchain technology in preventing counterfeit food from entering large-scale supply chains.

At the time, Alibaba stated:

“It is envisaged that this framework will be piloted in Australia and New Zealand and form the basis of a global supply chain model that will be applied across all of Alibaba Group’s market. The project will enhance traceability models and introduce new technologies to stop the production of counterfeit and fraudulent food products. This will include the development of a pilot blockchain technologies solution model to be used by participants across the supply chain.”

Since then, the demand for blockchain technology and decentralized applications in New Zealand has been increasing at a rapid rate, with leading companies demonstrating an interest in using blockchain technology to automate certain operations and processes to reduce costs.

In an interview with Stuff, Aaron McDonald, the co-founder of Centrality, a blockchain startup based in New Zealand, emphasized that startups in New Zealand have been focusing on integrating the blockchain seamlessly so that users do not have to think about the underlying technology when using decentralized applications or platforms.

“Users shouldn’t really need to think about the blockchain per se. Just like most people don’t understand how the internet actually works or how a cloud service actually works,” said McDonald.

But, seamless integration of the technology is difficult at the current stage of blockchain development because of the underlying scalability issues of public blockchain networks such as Bitcoin and Ethereum. For permissioned ledgers or blockchain networks that are decentralized to a certain extent, but are not fundamentally distributed, it is easier to scale and expand capacity depending on the demand from users and flow of data. For purely decentralized networks, it is significantly more challenging to scale to a point wherein millions of active users can be hosted by decentralized applications.

Famously, in an interview with South Korean finance news publication JoongAng, Ethereum co-founder Vitalik Buterin noted:

“I would say two to five [years to fully scale], with early prototypes in one year. The various scaling solutions, including sharding, plasma and various state channel systems such as Raiden and Perun, are already quite well thought out, and development has already started. Raiden is the earliest, and its developer preview release is out already.”

Because of the scalability issues of open-source public blockchain networks, it is not efficient for large-scale conglomerates to process all of their data through a blockchain network like Ethereum. However, companies could utilize permissioned ledgers and peg them to public blockchain networks, taking advantage of the security of open-source blockchain protocols and the flexibility of permissioned ledgers.

Still, McDonald explained that it is important for blockchain-using companies to develop non-custodial applications for security, even if that could result in the loss of control over user information. Centrality, for instance, refrains from holding any personal information of users because the storage of sensitive data could allow the platform to become vulnerable to hacking attacks.

“We don’t hold the information ourselves, and we don’t have access to it unless we are given access by the consumer.”

In the upcoming months, through partnerships such as the collaboration between Alibaba and Fonterra, and the emergence of unique blockchain networks by startups like Centrality, major industries in New Zealand will continue to test, adopt, and implement blockchain technology to secure and process information.

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