Yesterday we had the annual EIT Digital Conference showcasing some of the results achieved by the Innovation Activities in 2016. Today we are starting discussing ideas for Innovation Activities to run in 2018. Among the many topics in the Digital Infrastructure area is the application of relatively new technologies like blockchains to strengthen value chains in several areas.
This is why I was reminded of an article that appeared on Wired a few weeks ago with what I thought at that time was an interesting, although unexpected, application of blockchains technology.
Blockchains have made the headlines in association with Bitcoin and from that they have been considered as a tool to protect, certify, financial transaction. They are able to trace in a secure way, several hands over through a complex value chain with each transition being recorded through independent distributed mechanisms that cannot be hacked.
Hence they have potential application interest in several "chains" where it is important to monitor the handover.
Indeed, this is also the case for diamonds. Some diamonds "mines" are in war zones (blood diamonds), like it has been since the end of the 90ies in Congo. Diamonds are mined and exchanged for weapons and ammunitions, sometimes mixed with drug smuggling. In the end they finish on a ring, bought by a person to show his love to his partner, yet ignoring the blood trail behind that diamond.
By using blockchains to track the "story" of a diamond, from its mining to its casing on a ring through the many hands that handled it, it is possible to provide a certificate that shows that diamond to be clean. At the same time a market demanding "clean diamonds" undercut the value of bloody diamond. In practice is like saying that in addition to the GIA (or AGS, EGL...) certificate ensuring the quality of the gem you have another certificate proving that the gem has been dealt through legal channel all the way to your finger.
Our economic structure is very complex and it is bound to become ever more so also because of digitalisation. This latter is making much more difficult to appreciate the quality and history of a product (a bit is a bit), hence technologies like blockchains are ever more important. Notice that at EIT Digital the focus is not on the technology itself, the innovation is sought in the way of applying the technology to create new products/services and evolve existing processes. In a world where technology offer actually exceeds demain the real challenge is to find the right match between a technology and the market, knowing that success depends of several factors, most of them independent of the technology.