Covid-19, blockchain, crypto and masks … lots of masks and other medical supplies.
By José Reis Santos | 6th of May 2020
- Corona / Covid-19
The last time I wrote, Corona was a Mexican beer that was drank with a lime, or a player from Porto – depending on our choice. Many of us were thinking about what to do over Easter, what pre-season bathing diets to do, on the final days the championship, about the Euro 2020, or about the next summer holidays or festival, or which destination to choose for any upcoming weekend trip. This world, and these plans, collapsed live and simultaneously in March, suspending lives, projects and futures. The 25 of April in Portugal was celebrated by a single person represented us all, and the 1st of May filled the Alameda as if we were in Pyongyang. The planet, hyper-globalized in recent decades, has closed itself in nationalist, self-isolating cups, states of emergency and suspension of rights and guarantees. The economy, rampant these past years, and dispersed by an extended economic fabric from tourism to startups, from services to creative industries, is now reduced to the international business of medical materials, food delivery platforms, online streaming and little else. Millions have already lost their jobs, thousands closed companies, and many others are in the quasi administrative limbo of the lay off, not quite knowing what to count on, how to pay the rent after the summer, or how to organize with the kids at home, 24/7. The planet, once colored in a bright rainbow, is now a monothematic gray Covid-19. Everything revolves around a pandemic that has put our eyes on us. And it made us, immediately, pessimistic specialists in epidemics, contagion processes, the use of masks and ventilators. In people without beach or dinner, without drinks or live music, buzz, traffic or hugs. And how sad it is to be without hugs, hastening the orientalization of our customs while choosing the tones of the shelf and décors to use in zoom calls.
- Post-Covid I: Blockchain.
Perhaps because its currently my trade, but I have been thinking about ways in which blockchain technology can be used to manage and overcome the current crisis, essentially with regard to two sectors that I believe are essential to restore confidence in the future: logistics / supply chain and issues related to sovereignty and digital identity applied to technological pandemic control (such as a Covid-free passport), both of which are subjects of much debate these days.
With regard to the networks of world logistics, and as the World Economic Forum has very well pointed out, we have recently seen the dismemberment of many lines of distribution chains due to the collapse of international trade and the close and tight control of national borders. Therefore, hundreds of industrial sectors, totally dependent on long and interconnected logistics and supply chains, are today without primary and / or secondary raw materials, leaving them no choice but to close, go into lay off or look for supply alternatives. The safe report by the World Economic Forum refers that this can be an excellent opportunity for entire sectors to put their logistics chain on the blockchain, digitizing it and allowing them a better control over the origin of their raw material, benefiting as well from a better commercial relationship with their first and second line suppliers with the implementation of smart contracts.
To this example I would add the debacle and lack of control in the access to certain medical supplies (PPE’s), verified by the purchase of material with no quality and of doubtful origin (the majority with forged certificates). And we are talking about purchases made by States, such as Spain, France or the Netherlands, in principle institutions capable and capacitated of handling due diligence in a convenient way. Now if these products were on the blockchain, one could have access in a transparent and verifiable way – at the right time of the operation – to all the documentation and certification corresponding to the product in question, immediately confirming its legitimacy without risks or uncertainties. In the same way that the end customer could follow the path of their product live, properly geo-referenced, they could activate through smart contracts a set of commercial obligations that they had assumed (since transportation and freight forwarders, customs clearance or even the execution of forms of payment, including using cryptocurrencies). All just a click away; a click that would take a lot of headaches to the final buyer, clean the market of vultures, brokers and fishers, providing the final consumer with the necessary guarantees of product quality and veracity, saving valiant euros to the coffers of the State and taxpayers, without mentioning time savings, this so important variable when dealing with essential goods such as individual protection in health matters.
Another blockchain application, as or more important in my opinion than the previous one, has to do with the security of the good use of personal data to provide guarantees of individual and collective immunity in a post Covid-19 scenario. In specific, I refer to projects and proposals that aim to collect and use a set of data collected through which each of us volunteers for the network, and through a cluster of integrated peripheral tools that pass through the information generated passively in our systems of smart phones and Apps, and the entire existing digital surveillance and institutional data collection network. I believe that this is the meaning of the applications that the Portuguese Government (and others, including the EU) want to develop, seeking at first to identify, track, contain and manage the pandemic, and then – I hope – to use these same platforms to restore the necessary confidence so that the population can return to the public space and to work, use the street and the public space, restaurants, cinemas, theaters, beach, stadiums, etc., in a safe way in real time so that we know that these spaces and people around us offer us the necessary security conditions. It will, moreover, be decisive that this sense of security is achieved quickly, if we want part of the national economic fabric to recover in the coming summer months, especially the one related to the tourism, Horeca and services.
It remains at this point to understand who will lead the development and implementation of such projects, who will be responsible for controlling, managing and storing the generated data, and how this framework will respect the GDPR and issues related to the individual protection of digital data. It is strange that in this matter there is no one addressing this issue in a perspective that guarantees the user full control over their data, through a decentralized and encrypted systems, such as those that can be provided using blockchain (preferably public) under the tutelage of institutional entities certifiable and verifiable. This is a pressing point, in my opinion, since multinationals of the caliber of Google or Apple should not, with all their goodwill (read ironically), keep a gigantic database for free, and for future enjoyment.
This weekend at Expresso, for example, there were several articles and news about the use of Apps in the context of Covid and post Covid-19, and none speak of blockchain. Ricardo Costa did indeed rise up against what seems to be the imperative to put Google and Apple at the forefront of this type of solutions, but I do not think I read in his column any concrete proposal on how to solve the situation of the future dependency on these technological giants, nor how we, the citizens, can guarantee, simultaneously, that our digital identity, as well as the digitally produced data, are protected, safe and under our control. This is because if we think of using any type of Covid-Free digital passport to return to normal (and I am sure that many private spaces will use technological forms of control), it should be certified by (public) entities that will have first of all to ensure that the digital sovereignty of its users is fully safeguarded, and under their tutelage. Which can be easily achieved using blockchain.
- Post Covid II: Cryptomonedas.
In the same sense as blockchain, the use of cryptocurrencies has also become an issue in this world dominated by the business and trading of medical supplies, especially if we follow the trail and the adventures between Europe and China, and verify not only some of the conditions in the acquisition of such materials (50% at the time of order and 50% when it is ready to ship to Portugal, 100% upfront for ventilators) as the difficulties in ensuring that certain payments arrive on time at their destination. For this purpose, let me remember the odyssey of the Portuguese government in guaranteeing 500 ventilators from a Chinese supplier, which was a motivating theme for several articles and news in Portugal.
According to what was printed, the Portuguese State, in order to ensure these life-saving machines, had to guarantee that between Friday afternoon and Monday morning a guarantee of payment had to arrive in China, a financial operation with the necessary twists and turns to operate outside office hours, which involved Sonae Sierra and BNU in Macau. Only with this support, and benefiting from the good name and Portuguese access in lands of the East, was it possible to guarantee that such an order would not follow other destinations (which are said to be Canada). Now if the Portuguese State could pay in cryptocurrency, say Bitcoin, this transfer would be made in a couple of minutes, almost immediately, with very low operating costs and disregarding any formalistic impediments such as closing during the weekend or other specificities of operation, since cryptocurrency transfers – if accepted by the parties – not only have the same capacity for carrying value, but are independent of any intervention by a third party (bank), and the respective abilities to charge services on which they should not have such capacity. In the case of these ventilators, it was not necessary to use “alternative” ways of payment, but it remains to be seen what the total financial cost of such a fast operation was, and how many deals were left to be done due to the inability to guarantee that a given transfer would reach its destination in proper time and hours, and without an exorbitant overhead.
- Masks, masks and more masks …
Due to being involved in the (international) world of Startups, in blockchain, crytpoassets, and now neuromarketing, biometrics and neurofeedback, I have managed to cement contacts in various areas and sectors, and in various places around the world. In this sense, when Covid arrived with a snap, I found myself speaking directly with several suppliers and factories in China, with whom I have tried to put interested parties in direct contact, thus providing this access to those who need it the most. Let it be clear that I do not place any of my companies in these businesses, nor did I create or associate myself with any company of gifts and other office supplies. I did try to put real prices within the reach of institutions and private individuals so that the public purse is not squandered on account of a set of vultures with privileged access. And, to my regret, I realized that for the Portuguese market such an attitude has been shown to be incapable of breaking with some lobbies and privileged relationships, as this is the only way it is understood that there had been several direct adjustments for values far above the real market value, with evident damage to the national taxpayers, who are ultimately paying the exorbitant profits placed by a few for their own benefit. We always have this habit of giving profit to those who always take advantage of us.
To get a sense of what I mean, and for the attention of the Court of Auditors, let me just mention a couple of recent examples: (1) the much-vaunted centralized purchases within the Metropolitan Area of Lisbon, which have served the surrounding municipalities from the capital, were always attributed by coincidence by direct agreement to a single company, Enerre, a specialized company in gifts. To make it even more specific, I can also say that I knew in advance of the needs exposed in a contract awarded for 3 million and 600 thousand euros (plus VAT), and that the AML knew about the prices of my contacts in China beforehand, claiming we would be considered for the bid, which we never were. Now ask yourself how much was our price was for this order … 2 million euros! In other words, in this adjustment, AML managed to waste around 1.6 million euros. How and why I was never consulted I never knew, as I was always guaranteed that all the information from my side was properly compiled and made available to those who made these decisions. I did successively check that this Enerre was able to close all contracts, always with values far above those we presented, and always with evident financial loss for the municipalities of the Metropolitan Area of Lisbon.
In the way (2), another public institution also referred to me having placed the order for 1 million simple surgical masks at 1 euro each, when those would be around 0.40 cents, which makes a difference of 600,000 euros that could have been used to benefit the population and the users of this institution. This institution also has our contacts and our prices, but it has also preferred not to carry out any consultation with us. And believe me, this will be another case that does not seem to me to pass the cotton test, if there is someone interested to do it.
And I could tell you another story from Portugal, one that left 7 million masks in China: 2 million ready to board a plane that I was told was in the air from Portugal to China, and another 5 million in stock and ready to be delivered in the space for a couple of days. All because I was contacted on a Friday after lunch by someone who said he was articulated with the Portuguese State (and Ministry of Health), and who wished to see by the end of that same working day a solution capable of solving this order. And so I did, preparing the 7 million masks, duly certified, only to be told later that after all the Ministry had jumped out of business, first, and that the certificates we had sent were not in compliance, which I later proved not be true. In any case, and without trying to be boring, I later came to verify that the Ministry of Health did not know about the existence of any aircraft, nor of such an order. It was also mentioned to me by several intervening parties that, after all, I could be facing a situation in which the broker who had contacted me wanted only to have the certificates and contacts from the factories in his possession, so that he could then go directly to the pot, and come out before a potential buyer as the sole representative of these same suppliers. In any case, being this matter for another more detailed article, the Portuguese were deprived of 7 million masks, at a time when Covid was galloping in the national territory.
More stories like these, unfortunately, I have been accumulating over these weeks, verifying (in most times) that whenever it regards to human nature in situations of collective emergency, backstabbing and greed always end up overcoming solidarity and the will to contribute to the common good. I just hope that this time it will be different, and that these wise-asses will not be offered the freebies so often offered to them, not only because we talk about many millions pocketed at our expense, but because we are preparing for one worst economic and social crises in our recent history.
I also hope, in conclusion, that it will be possible to start looking towards the future with discretion and a sense of opportunity, and that the various actors with capacity and responsibility (State, private, institutions and other organizations) will be able to be consistent in the way they will seek to launch the basis for what we hope will be a frank and quick post-Covid societal recovery. And as in so many other times of crisis, that we will know how to take the opportunity to introduce a set of measures and projects that enhance our collective future, as I believe will be the digitalization procedures and exploration of blockchain technology in areas so decisive for the re-entry into the new normality as are sector of logistics / supply chain – which literally feeds us daily – and the issues related to the next generation of Human Rights: full sovereignty and the ability to manage our digital identity.
(Article published online at Visão on 6 May 2020)