Blockchain and resource management

This month my blog posts are around trending tech issues. We hear a lot in the news about technology and a few trends were mentioned briefly at the NZPI conference. It got me thinking about how we connect these big tech news stories with what is happening in our lives and professional practice.

This post:

Blockchain and Resource Management 

Blockchain will allow us to have accurate and reliable data transfer relating to activities, environments, resources and environmental effects. Monitoring information collected by the consent holder’s scientists could be seen instantly by the consent holder, the affected parties, the council and other agencies. How would this change compliance and monitoring? Simply put it is a game changer both for the process as we know it today, but also the expectations of our communities in the speed and responsiveness to detecting and acting on effects.

Blockchain started to be applied in 2009 to crypto-currencies. In 10 years it has come some way, but I think it will need 20 years under its belt to be a practical tool for planners, unless other industries prompt its use in a way which we can piggy back on. The key potential prompt here is in relation to growing demand from consumers about transparency in the production chain. Consumers want to know in particular where their food comes from and whether it is ethical. This may lead to the need to record data about aspects of food production such as water used, contaminants discharged and food miles traveled. These consumer driven values are also inherently about environmental effects. If companies incorporate blockchain technologies to track this information for consumers, we can expect to have useful data made available to us in our processes.

The plans we write today will be in use in 10 years time, when we may see some blockchain data coming in to our work. More to the point, knowing that such technology is coming, how do we prepare our plans to make the most of these new technologies to get better environmental results.

To read my other blog post which discusses blockchain click here for NZPI conference 2018 keynotes (see section on Ian Proudfoot’s presentation) and also my PQ article on the Internet of Things.

Read on for some further explanation including what is block chain and what are the opportunities and problems with it.

So, what is Blockchain?

IBM explains it here.

Basically, today we rely on banks and other companies to keep ledgers of our transactions and handle the transfer of funds between the two parties involved in a transaction. This is based on the concept that an independent intermediary is needed to keep an accurate and reliable record for the parties. Blockchain is a new answer to this age old economic problem. It is simply a distributed ledger which records transactions in a way which is very secure and incorruptible. Transactions are recorded and verified across a network of computers. Any party involved in the transaction can see the record at any time and all records stay current. No-one can delete the information and no single party ever has sole control of the record.

We most commonly hear about blockchain as the computing concept behind crypto-currencies. Key crypto-currencies are Bitcoin, Litecoin and Ethereum. Blockchain requires powerful computers to do the processing and it is an emerging technology. Therefore it makes sense it has first been applied to currencies where those involved can be rewarded by something of value. Yet it can and will be applied to other sectors which also need forms of secure record keeping.

Opportunities with Blockchain

Blockchain has the following potential benefits:

  1. Data is accurate and nearly incorruptible – each ‘block’ of data is added to the chain and once added cannot be deleted or amended.
  2. Avoids the need for intermediary agencies – “Middlemen” pop up all throughout the economy to facilitate transactions between distant parties.  This can provide significant cost savings if many of the normal steps in the process can be bypassed.
  3. Can track production chain and given consumers transparency – Blockchain can verify the whole production chain of a product including resource use along this journey. In the globalised economy this has been virtually impossible to track up until now leading to consumers not understanding the environmental effects of the products they consume. So called Food Fraud is a global problem with 10% of food likely to have been deliberately misrepresented or had ingredients substituted.
  4. Supports decentralised IoT devices – It is estimated that 20% of internet of things devices will have block chain services enabled (NZ IOT Alliance, The Internet of Things: Accelerating a Connected NZ, pg 62). This allows these devices to authenticate each other without the need for central servers.
  5. It is new and starting out – It has only been put into practice for just under a decade, therefore has a long way to go to show its potential.

 

Problems with Blockchain

Blockchain was a positive tech story in 2017. Bitcoin absolutely soared in value during last year. We also saw more mainstream discussion on Bitcoin and some effort to spread a message that blockchain is far more than a crypto-currency technology. This year, the coverage has been a little more measured. The current ‘downsides’ of blockchain include:

  1. It is specialised and not really understood yet – It is beyond the comfort zone for most businesses. Most businesses have outsourced many functions and it is not in the interests of these consulting organisations to promote blockchain to clients, as it does the intermediary out of business.
  2. It needs a lot of computing power – It has multiple copies of the same blockchain across many computers and is updating and verifying every few seconds or minutes. Normally Bitcoin checks every 10 minutes for new transactions to verify and record. Its competitors are doing this more frequently.
  3. Consumes large amounts of electricity – The computing power needed results in significant electricity use. Therefore it is only used when the cost of processing these transactions warrants this sort of security i.e. financial transactions.
  4. Transaction speed is slow – As Bitcoin has grown and the number of transactions increase, backlogs start to occur. With the frequency of verification, this starts to snowball to greater delays when it does start to happen.

 

It is worth keeping an ear out for blockchain related stories in the media, besides Bitcoin and the like. Other applications of blockchain such as increasing the security of IoT devices are an application of this technology which may bring change to our profession over the next decade. It is important to understand how this can give us new ways to manage activities, environments, resources and environmental effects. It is likely that this technology will not be designed specifically for our fields, but that it will become part of the business process for many of the major resource users and activities and therefore the potential to use it in resource management will become possible.

Next week my post will be about artificial intelligence (AI).

 

 

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