Blockchain is used in many business sectors. It is now set to resolve previously unresolved problems of society.
by Dr Jakob Vicari
The conversation chain: the social network Twitter is an unbroken chain of global conversation. Nowhere else is blockchain discussed as intensively as on Twitter. Every minute, new tweets are posted about the technology and its sustainable use: by activists, scientists and Bitcoin traders. We have included some of their opinions.
The courier easily opens the luggage compartment of a parked car. He places a package inside and closes the lid, which then locks itself. The owner of the car had earlier granted the courier a temporary access authorisation – without a key, but with maximum security. The owner now receives a message on his smart phone, in realtime, telling him that the parcel has been delivered.
Unlocking a car for a specific person, on a specific day, at a specific time: Porsche is the first car manufacturer to implement blockchain technology in a vehicle and test it successfully. Porsche is working in cooperation with the Berlinbased startup company XAIN, which specialises in intelligent industrial applications. In just a few months, interdisciplinary teams were able to configure a Porsche Panamera with an energyefficient mining process by XAIN.
Tested application cases range from locking and unlocking via an app to new business models through encrypted data logging. Blockchain technology makes the sensitive issue of “access to the vehicle” faster and more secure: access authorisations can be sent to different smartphone users without any risk. Since the blockchain does not involve any detours via a server, the authorisation check is six times faster than usual.
The blockchain can also record the vehicle data reliably and securely, for predictive maintenance or autonomous driving, for example. Since vehicles are becoming increasingly networked, exchanging data with each other, this essential communication must be designed to be as well protected against tampering and manipulation as possible. Hacker attacks are nigh on impossible, thanks to the decentralised storage of data.
Originally developed to create digital currencies like Bitcoin, and intended for business models and processes for which there are as yet no other digital solutions, blockchain could change entire industries from the ground up – and much more: the technology is also setting the pace with regard to sustainability.
Some people see blockchains as continuously extendible chains of data records, which are used together in a network of computers, i.e. not stored centrally but with decentralised distribution. For Australian tech expert Jamie Skella, they are simply account books: as soon as a data transaction takes place between a sender and a recipient, a new item is entered in the account book.
Traceability, transparency and protection against tampering – the blockchain’s sophisticated code creates the most important interpersonal currency digitally: trust. As soon as a data record is added to the chain, it is almost impossible to make changes. Anyone who participates in the blockchain holds in their hand a complete directory of all transactions ever made and all transactions to come. Blocks, data packages or transactions that have already been saved are sealed. Skella explains it like this: “John gives Sue money. Thousands of people are watching. They confirm that John has given Sue the money. As soon as confirmation is received from the majority of members, the transaction is saved in a data block and, from that point on, can no longer be changed; it remains in the blockchain for as long as the Internet exists.” If anyone was to claim something different later on, the chain would know that they were lying.
Without trust, human cooperation ceases; progress ends. Yet interpersonal and institutional trust is eroding.— Jamie Skella (@JamieSkella) 6. Juli 2018
What if new systems enabled censorship resistance, permissionless participation and radical transparency?
That is the grand social experiment now underway: #Blockchain.
Transparency is the key to the chain, but there is a mystery surrounding the chain itself: the inventor’s identity is still unknown.
Using the pseudonym Satoshi Nakamoto, his manifesto was published in October 2008, disguised as a scientific essay looking into the problem of all currencies: how is it possible to prevent digital money from simply being copied and then spent twice? The solution he developed: blockchain. No longer would institutions like the state or the banks control money, but rather citizens with equal rights using their computers. On 3 January 2009 at 6.15 pm GMT, Nakamoto launched his own currency, which everyone has heard of by now: Bitcoin.
The unprecedented rise of this cryptocurrency and its subsequent extreme crash do not belie the fact that blockchain is a platform that can be used for all areas of the economy and society – regardless of sectors and cultures. Blockchain is like an encrypted logbook of events. Supporters believe that it can become the operating system of a transparent society. In addition to artificial intelligence and the internet of things, blockchain is considered to be a third technology that is blurring the boundaries between the virtual world and the real world.
The short term drop in #cryptocurrency price does not reflect any change in how impactful #blockchain technology will become. What matters is that we focus on the technology and adoption rather than the price, and build out a sustainable and adopted ecosystem for the long term— Skynet (@OpenSingularity) 20. November 2018
Now it is starting to answer complex social questions. With its help, companies can check whether their requirements in terms of sustainability are being met across the entire delivery chain. At the same time, blockchain promises solutions to some of the most serious problems of our time: corruption, financial inequality and the regulation of access to information. Blockchain intensifies the fight against hunger, controls financial risks, helps safeguard human rights and create fair working conditions – it promises a future in which every physical product is digitally embedded in its own history. It allows us to see clearly where a product has come from and who has processed it, in what way, where and when.
Supply chains are extremely complex and, due to the frequently ramified and barely controllable supplier structure, are only semitransparent. Blockchain switches on the light here. It begins when a producer registers the products he has produced in an app. Once this is done, all the steps taken by a specific product can be traced, based on its digitally specified history. And nothing more than a smartphone is needed to do it. This democratises the process: it can be used anywhere in the world, even in less economically developed regions.
Blockchain connects tea farmers from Malawi with buyers in the English retail sector. It tracks the production of a designer jumper from alpaca farmers in the Andes to a popup store in Denmark, and, in supermarkets, answers the question of whether a food product has been produced under fair working conditions and how significantly its production and transport affect the environment.
And it does all this phenomenally quickly. A team in the USA set itself the task of tracing a package of chopped mangos back to its origin. The team took exactly 6 days, 18 hours and 26 minutes. The blockchain was able to check the fruit’s journey from a farm in Mexico to the US supermarkets in 2.2 seconds.
I think there is something profound about the idea of creating new markets with morality as starting point. #blockchaingovernance— ARWEN SMIT (@ArwenSmit) 26. Juli 2018
More efficient production, modified through blockchain, could also have a significant impact on sustainability. “Almost every economical gain in efficiency also promises improved sustainability,” said Gilbert Fridgen, a business economist at the University of Bayreuth and founder of the Fraunhofer Blockchain Lab.
The prerequisite is comprehensive documentation of the process and the ability to retrieve the information in real time. This direct traceability enables monitoring and an immediate response, e.g. the support or cancellation of a supplier relationship, if a contractually defined criterion is not met.
Software governs this brave new world, and humanity shifts into the background. If you take humanity out of play entirely, you end up with a forest that manages itself sustainably. It fells trees at exactly the right time and organises their resale.
Science fiction? Terra0 is the name of an interdisciplinary forestry project funded by the German Federal Ministry of Education and Research. Researchers want to find out the extent to which blockchain can be planted in forests. They are developing a spectacular code chain that collects and evaluates data in a section of forest and organises itself. Satellite images show which trees are diseased and must be felled. Autonomous drones distribute new seed. Terra0 was launched by three students in Berlin as an
art project. In the meantime, the Forschungszentrum Informatik (FZI Research Center for Information Technology) in Berlin is coordinating the programme.
New #terra0 project: Flowertokens is an experimental project centered around the tokenization and verification of natural commodities, and a first attempt at creating a combined crypto-collectible physical asset. https://t.co/TEqX8QoYGI #flowertokens pic.twitter.com/p3iEJDkA5M— terra0 (@_terra0) 5. Juni 2018
“Sustainable blockchain will only be successful if companies cooperate,” says Fridgen. The keyword here is platooning: this is when several vehicles drive very close together in convoy, communicating with each other autonomously – without a central coordinator.
To ensure that nothing happens, sensor data shoots here and there in real time. This allows the vehicles to drive closer together, saving fuel in the slipstream – an attractive model, which is both economical and ecological.
Platooning is organised and accounted for using blockchain. “There are advantages for every car, except for the one in front,” said Fridgen. “But the vehicles could compensate for that through a blockchain transaction.” All vehicles have a wallet that the coupled car pays into. When switching to a different formation, the car in front can reuse the credit it has earned.
IOTA, an acronym comprising “Internet of Things” and “Tangle”, goes one step further. Machines join forces for the purposes of sustainability. The project builds on the next generation of blockchain. Tangle links several chains together, instead of simply stringing blocks together.
In the internet of things, connected devices process transactions together. Take the example of autonomous emobility: at the charging point, the charging pedestal and car communicate with each other and interact independently. “Blockchain establishes trust between the machines,” said Fridgen – which is the basis of the “Machine Economy”.
Used properly, blockchain holds immense potential. It can contribute to greater sustainability – but it cannot satisfy this demand by itself just yet.
The constant generation of new blocks devours computing power – and thus energy. The Bitcoin network alone, currently the most computationally intensive blockchain, devours 60 terawatt hours of electricity per year – the equivalent of the energy consumption of the Czech Republic.
And who’s responsible for this immense energy consumption? The socalled miners. These computers compete to solve hashtag puzzles – whoever calculates the right value first can enter a new data block with transactions in the blockchain. In return, the re spective miner receives a reward from the network, paid in Bitcoin.
However, many public blockchains are based on energysaving proofofconcepts. With the proofofstake consensus mechanism, transactions are validated using the user’s capital rather than burning computing power. Geothermal energy in Iceland or hydro energy in Austria are favourite energy sources for Bitcoin mining.
Blockchain technology might still be in its infancy, but its contri bution towards a sustainable future is already clear: in energy networks, for autonomous driving, in transparent delivery chains or even put to use in the fight against poverty and climate change. That’s the power and strength of blockchain technology: a tool that was developed by progressive thinkers, for progressive thinkers. They might come from different sectors. But their solutions turn industries upside down – including in terms of sustainability.
However, business economist Fridgen warns against measuring blockchains solely based on their direct energy consumption:
“If you don’t include the intermediary institutions, you’re also elimi nating their computer technology, office buildings and employee journeys to work.”
Dr Jakob Vicari is a scientific journalist and creative technologist. His focus: the journalism of things. He brings together issues from the economy, biology and technology for various magazines and daily newspapers.