Block by block, things advance
By José Reis Santos | 2nd of August 2020
Recently Professor António Costa Silva presented his Strategic Vision for the 2020-2030 Economic Recovery Plan, where he outlined a set of reflections that seek to answer the question of: what to do in the day after? The day after in the sense of the impact of the Covid-19 pandemic, we should understand. This vision is broad, as it should be, and broad enough to contemplate a wide range of options, mostly strategic (although some are quite specific), with a global reach and national impact. Such was, in fact, the intentions of this set of strategic visions: pointing the way indicating a set of good-light headlamps painted with good ideas and concrete notes. One more for the files, say a few; lets see if this one is different, say others. As far as I’m concerned, I enjoyed to see the set of references to the importance of the exploration, implementation and dissemination of blockchain technology, which incidentally reinforce what had already been written for the electoral program of the Socialist Party, and then transposed to the program of the Government. In other words, it is a theme that is gaining its place in the public (and political) plaza, which we are seeing addressed more and more regularity, but perhaps not yet with the desired regularity, I would say.
In particular, António Costa Silva identifies that «the new digital technologies associated with the fourth industrial revolution, such as artificial intelligence systems, 5G technology, cloud and proximity computing, blockchain technology and the Internet of Things, are constituted , as a whole, as one of the main foundations of the ongoing digital transformation, in order to facilitate the fulfillment of the long-term goals of carbon neutrality, in line with the guidelines of the European Ecological Pact and with the Government’s strategic challenge related to the response to climate change ”(p.38). In other words, blockchain is placed at the center of the 4.0 revolution, as one of its pivots and foundation stone of the new systems, which must run on such technology for the sake of transparency, the immutability of information and its total traceability, and with the State to be an assimilated player and stakeholder, I would add.
Ahead of the same text, blockchain is again identified, now in a more practical and demonstrative sense of its applicability, when referring to the relationship that Portugal must develop with its natural resources, namely the so-called high impact minerals (those that will have high demand in the energy transition), such as lithium ‘. At this point, «two main lines of action are mentioned: prospecting to identify exploitable resources in a sustainable approach, and exploration planning (if the political decision is taken to move forward), involving all stakeholders in the mineral production chain and ensuring minimization environmental impacts, water footprint, reduced energy consumption and investment in recycling and the circular economy». In other words, full compliance with the purposes of the Green New Deal and with the United Nations Sustainable Development objectives, and well, noting that «it is necessary to implement the blockchain concept on the ground» to guarantee the «tracking of raw materials from the origin to the final destination in order to guarantee the sustainability of all processes» (page 93). In other words, António Costa Silva not only identifies the general use of blockchain as an engine and one of the bases of Revolution 4.0, but he still devotes some time to identifying how it can be used in a specific use-case, bringing transparency and full traceability to a sector many expose to this same lack of information and control mechanisms, as well as fraud and less clear situations, such as raw materials with (very) high added value.
In any case, and notwithstanding these references, I believe that António Costa Silva could have gone a little further, and multiply not only the examples where blockchain can be applied, but point out a way on how to get there, ie, refer to the role that the State and companies can, and should, play in the search for these solutions. And at this point the text is manifestly silent, as it could identify other areas – namely within the public administration – where the government could bet on developing MVP’s and other sandbox environments. It could also refer to the importance of training the national economic fabric and ecosystem with the specific tools that would provide the qualifications to work in these areas, as well as a set of fiscal and economic support these specific areas, or creating the experimentation environments / sandboxes where the State, and the public and local administration, were active partners in the promotion of pilots using blockchain technology. And I give a couple of examples.
In the area of public procurement, a hot topic this summer due to the examples of complaints on the misuse of public money in the purchase of protection material (PPE’s), for example, a number of pilot-projects could be strengthened in areas where it can be predicted that there will be no major conflicts or bureaucratic-legislative nature, nor technical complexities. Test the concept of placing the information of a set of acquisitions of three or four municipalities that could reflect the country (North-Center-South-Islands) on a blockchain, thus allowing immutability of the data, clear and transparent access, informative dematerialization and procedural digitization, thus seeking to safeguard, in a publicly verifiable way, the acquisitions that these groups of municipalities would make, in a given sector, and for a certain time. At this point, and in my view, there would always have to be a solution that does not require too much from a technical point of view, that is, in due articulation and dialogue with the institutional culture in question and that does not cause a massive disruption in the the way in which these institutions deal with these matters (for various reasons), in the same way that a project of this nature should be conducted in a supplementary way to the existing processes (and not immediately move forward with their replacement).
Another example could be to place a set of certificates on a blockchain, such as those coming from academic institutions, which can be easily accessed, legitimized, and used in a digital and secure way, thus seeking to streamline and simplify their use both for the users of these same certificates (often lost, forgotten, etc.) and the institutions that produce them, and ultimately the State (in the case of its university institutions). In this way, proof of completion of a bachelor’s, master’s, etc., could be presented and verified immediately, with no need for those presenting it to request duplicates, wait, pay, etc. And whoever wanted to check this information, would know that being on a blockchain, it is neither corruptible nor altered, on the contrary: it is fully demonstrable. One last example, as it could leave you more, could be to put on a blockchain the relevant information from the wine sector, from the harvest (or even earlier, when planting the vine) to when we take a bottle off a shelf. In this case, in the same way as in the certificates, or even the Lithium example presented by António Costa Silva, placing this information in a blockchain would enable the final consumer to know exactly, in a reliable way, and within the reach of a click, a set of information about the wine one would be buying, the lifeline this same bottle took until reaching one’s hands, its ecological footprint, the characteristics of the wine, its certificates, prizes, etc. For producers, such information is important for valuing their wine, fighting counterfeiting (particularly for foreign markets, where they are most exposed), and having access to a set of analytics, in real time. And if we add smart contracts, we can also optimize a set of commercial and legal relationships with its suppliers, regulators and the State sector, since the conclusion of this type of relationship (bill payments, taxes, transport of certifications, etc.) would be automated in these smart contracts. As in the examples already mentioned, this project should also be as less intrusive as possible, using existing technology. Thus, although it would be possible to develop smart sensors to place in the bottles (which, for example, are capable of detecting the ambient temperature), it would not interest us at this stage to force partners to make such an effort. Instead, we would always propose a set of solutions that use the potential of QR codes and / or bar codes, for example, as I am an advocate of an integrated transformation process, ie, as a product of a prospective dialogue between the surrounding parties, respecting cultures and the times of adaptation to the new, to the potential disruptive process. And of course, if we refer to the wine sector, we could refer to alcoholic beverages, or any product that benefits from these mechanisms of transparency, real-time tracking, and automation / optimization of commercial relations between partners, customers, consumers, regulators and the State.
One last reflection to point to the need, in my opinion, for blockchain technology to suffer more attention and governmental intervention and focus some of its attention on Startups / SMEs that work in this ecosystem, as not doing so is declaring the will to consecrate a technological dependency in relation to the large multinationals that occupy this space, increasingly with dominant positions. I am not one of those who believe that the areas linked to cutting-edge technology should be outsourced to the private sector that governs and already manages a large part of our systems under a licensing regime. On the contrary, I am one of the ones who argues that for some matters, and for some sectors, the State should be trained to be an active player and a full partner, as this is the only way it will be able to maintain some control and independence with regard to technology, simultaneously allowing it to be an articulation beacons with the local ecosystem. And on these last points I think that Professor António Costa Silva’s Strategic Vision could have gone a little further, despite recognizing that blockchain is a theme that is achieved block by block, step by step. I already consider the relevance given to blockchain, both in general and in particular, to be very positive, as I also consider very positive the openness to the public contribution posted on the government page (here), and the email dedicated to receiving such ideas (plano.recuperacao@pm .gov.pt). I know that I will send here the ones I write here (and maybe a few more), and I invite you to do the same. Even if only to see that we don’t let another positive reflection on our country to be shelved.
(Published online in Revista Visão on August 2, 2020)