Via Long Hash, an interesting article on the potential for blockchain to help save water:
In May, temperatures in Hong Kong soared to record highs. Residents grappled with sweltering heat, and low-income families struggled to gain relief, highlighting the desperate conditions of Hong Kong’s poor.
But the scorching days forced another issue to the forefront as well. The 15-day heat wave illustrated the urgent need for water security in a territory that relies on the increasingly unreliable Pearl River Delta (PRD). Hong Kong, Macau, and China’s Guangdong Province all get their water from the PRD, and its flows could drop by nearly a quarter in just over 50 years.
Patrick Suen has a front-row seat to Hong Kong’s water drama. His company, WATERIG, is part of the MIT Solve program and is developing a pilot program there that will use blockchain technology to tackle some of the key factors contributing to the area’s water insecurity.
“Hong Kong is one of the most water scarce locations in the world,” Suen says. “But the Hong Kong government is able to apply their financial muscles to secure a line of water directly from the source. They pay a lot of money to have that priority access […] and they create an illusion for the consumer that water is abundant.”
No region of the world is immune to issues of scarcity. Cities from Beijing to Bangalore to Miami face impending water crises, and London may see shortages by 2040, according to the BBC. As portions of Jakarta, Indonesia, sink below sea level, the city struggles to provide safe water due to poor infrastructure and corruption while also coming up against the fast-encroaching effects of climate change. By 2030, worldwide demands will exceed current capacities by 40 percent. In developing countries, the gap could grow to 50 percent.
The effects of climate change are undeniable in the scarcity problem, as is the influence of aging infrastructures. But politics and corruption play a role as well. Flint, Michigan, for instance, provides a tragic case study of the ways in which a community can be devastated by a lack of a clean water supply and negligent government leadership.
Last month, Cape Town, South Africa, narrowly avoided running out of water but continues to suffer from a three-year drought that’s forced limitations on water usage. The crisis is by no means fully averted, and critics say bureaucracy, dysfunction, and “willful ignorance” led the city to the brink.
“Water scarcity can be driven as much by politics as by drought – as is alleged with regards to South Africa’s current water crisis – and corruption can intensify water scarcity,” says Emma Weisbord, water issues expert and former governing member at the International Water Association.
“Blockchain has the potential to provide more transparency to the sector with regards to spending, contracts, supply chain management, [and] payments and pricing, thus reducing corruption to ensure that everyone receives fairly-priced clean water and affordable water services,” Weisbord explains.
Decentralized Solutions
A decentralized water treatment system, such as WATERIG’s pilot program in Hong Kong, could help Flint and other communities suffering from poor infrastructure and insufficient municipal action.
“Blockchain is kind of a new way of organizing relationships and trust,” says Suen. The decentralized structure of blockchain technology safeguards against centralized manipulation of data and it makes systems more resilient against catastrophic events, he explains. Data stored on the blockchain is distributed rather than being stored on a central server, significantly decreasing the chances of vital information being lost.
Suen’s company is taking advantage of those features to create a platform that allows for decentralized water collection hubs and exchanges. Rather than relying solely on government-controlled pipelines, Suen and the WATERIG team envision hybrid solutions in which residents are more actively involved in water supply management.
The company is developing collection points that can be used to capture, say, rainwater during heavy storms. These hubs would be connected to systems for processing the water and directing it into applications like vertical farming and greenhouse projects. Because the system is decentralized, different communities can decide which modules suit their needs and can use the blockchain for crowdfunding their own water hubs.
Theoretically, blockchain would allow for fast, transparent transactions that will allow for better use of water resources. It could also alleviate strains on existing collection and treatment infrastructures. And that’s important, because deteriorating infrastructures — exacerbated by population growth — are a growing factor in water scarcity.
“We can bring a whole lot more people to create more water at the place of need and create more entrepreneurs, more hands for the task, more technologies being used – all through the blockchain,” agrees Riggs Eckelberry, co-founder and chairman of WaterChain.
In particular, he sees on-site facilities as a means of capturing and processing water that typically goes to waste. As more companies and individuals are able to process their own wastewater, they’ll be more motivated to recycle it and even create small businesses that cater to that need, Eckelberry believes. And rather than appealing to traditional investors, businesses transacting processed wastewater on the blockchain will be able to raise capital through cryptocurrency tokens.
To that end, WaterChain is developing a blockchain approach that includes a cryptocurrency that could create a reward system for new water producers. The company is also developing a pre-fabricated treatment system that will work out of the box, significantly lowering the barrier to processing wastewater.
According to a 2017 UN World Water Development Report, eighty percent of wastewater never gets processed, which represents health risks and missed opportunities. The World Economic Forum also reported last March that wastewater can be used to cool and power factories or to create fertilizer, alleviating some of the stress on the global supply.
“The people of Flint, Michigan are hostage to the municipality,” says Eckelberry. “But what if, through the process of a water coin, you had an entrepreneur in Flint, Michigan, who provides clean water for his neighborhood, makes a little bit of money, has a small business. Maybe he could get a microloan and boom!”
“Why not treat our own country and South America and other places that don’t normally get aid as places that could use a leg up with an economic opportunity, with technology that is specifically suited to small, agile water treatment as opposed to the big, hulking systems that we are accustomed to?”
The Coming Water Wars
Change is difficult to enact, and blockchain companies face uphill challenges in implementing their solutions. Funding new blockchain systems, integrating old infrastructures with new technologies, future-proofing digital platforms – these are areas companies will need to address before substantial change takes root, says Weisbord.
In addition to infrastructure and wastewater management, blockchain companies will also face the challenge of educating the public to save more water.
“Everyone’s running out of water, but people don’t realize it yet,” says Ravé Mehta, founder of Water Ledger and partner at Flow Capital. “We’re about to come up against a really fast-moving global water epidemic and there’s not enough movement happening to prevent this.”
In fact, some water rights regulations even reward wasteful behavior. Mehta offers the example of states such as Colorado, where “use it or lose it” laws incentivize water rights holders to use more water than they need to avoid having their privileges revoked. If they don’t use enough of their allotted supply, the state can revoke their rights and grant them to another rights holder. The laws have eased in some places in recent years, in part because of water scarcity, but the issue remains contentious.
Mehta says that while most consumers are unaware of how water is processed and delivered right now, everyone will be forced to confront the issue as “water wars” break out in the coming decades. Already, conflicts over valuable basins in the American Southeast and other parts of the world have become heated. Water shortages reportedly contributed to instability in Syria and Yemen, and scarcity could drive food prices up and GDP down in highly-stressed countries.
Solutions such as Water Ledger, which aims to provide a blockchain platform for “tracking all things water,” can help bring transparency to water usage, quality, and conservation efforts by enabling a connected water marketplace, Mehta explains. He notes that in areas such as the Colorado River Basin, which include many different jurisdictions, Water Ledger’s blockchain platform can allow for better, more efficient collaboration in managing water rights and supplies.
“As water shortages begin to permeate throughout the world, water will quickly become one of our most valuable resources,” he says. “There needs to be a system that’s trustworthy by all stakeholders that can first create a comprehensive ledger for who owns what water rights and then enable a marketplace across borders that’s secure and efficient without it being controlled by one side or the other.”
On the upside, there’s a great deal of innovation happening in the water security space and the people solving these problems seem clear on what’s at stake. Competitions such as the Water Abundance XPRIZE raise the issue’s profile and attract smart, motivated minds to solving it. The bad news is that the general public doesn’t realize the extent of the water crisis – or even know that such a crisis exists.
Blockchain innovators are in a race against time and the environment. And for all of our sakes, let’s hope they win.
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