Community NdT Blockchain Use Cases

This article summarizes the most recent use cases developed by Network Partners of the NdT Community. Although they operate in very different industrial sectors, all the Partners have the same objective of giving concrete form to blockchain projects after having "put their nose" in the technology.

All these use cases will be presented by their proponents at the Community NdT Blockchain Business Case Forum next 27 June in Milan.

A first experience comes from the Italian Customs Agency that is deepening the adoption of blockchain technology to involve, in a uniform growth path, those technologically advanced companies that are still moving in a scattered way when implementing projects to integrate blockchain into their ERPs. With the aim of using blockchain-based solutions to prevent fraud, the Agency is inviting these companies to think together on how to use blockchain. In fact, it is very likely the risk that if a company implements a proprietary blockchain system in isolation, the regulatory body will not be capable to carry out legal controls on that same system. The company will inevitably incur in additional costs that will negatively impact the return on investment of the blockchain project, further aggravating its position in the obligations towards the public service administrations. To lead companies towards a path of innovation and encourage investments, the Customs Agency proposes itself to take the role of non-invasive guidance and control.

Another noteworthy example of practical application of blockchain has been suggested by the World Food Programme, a United Nations humanitarian agency for the fight against world hunger and food assistance in emergencies. The blockchain project "Building Blocks" allows refugees in a refugee camp to buy food from local retailers by activating the payment transaction through a biometric scan of their retina for individual recognition, registering the transaction on blockchain. The use of cash, bank cards or paper vouchers has been made obsolete as refugees do not need to share sensitive data with banks or mobile operators. Instead, refugees benefit from increased security and privacy through an immutable and secure blockchain. At the same time, blockchain ensures the certainty that the daily allowance for each refugee is spent exclusively for the purposes for which it is provided, typically food and clothing.

The round up continues with the project, still under execution, of a U.S. importer of Italian wines. To consumers that want the choice of niche and authentic products from small Italian producers, the proposed model offers a blockchain-based exchange platform that optimizes the supply and distribution chains and makes it easier to discover Italian food and wine, putting buyers in direct contact with product and producer stories. The proposed exchange platform includes some features that take full advantage of blockchain. For example, during the engagement phase with the producers the consumer can verify with certainty the truthfulness of the information about the methods of cultivation and production. Furthermore, the traceability of the wine along the supply chain is made undisputable, as is the streamlining of the export process that remains always transparent and verifiable. The certainty of the information about the shipped goods not only reduces insurance costs but allows innovative and sustainable financing models. The inventory of shipped goods can be financed through funding providers.

Lastly, a significant community of law firms has grown within Community NdT. They are addressing the subject of the applicability of blockchain solutions from a regulatory point of view. They have set to themselves the goal of identifying and suggesting the possible use of blockchain using the laws in force, and to point out those aspects that are not yet regulated and therefore to be managed carefully. The current conclusions are that, from a legal point of view, blockchain can guarantee automatically, and at low costs (not having to refer to any guaranteeing intermediaries), the steps of a contractual flow. The chain of blocks in fact manages automatically the registration of the fulfilment of the obligation, or satisfaction, of the right. Furthermore, blockchain acquires an even more juridical value if used as a technological basis for the development and use of the so-called smart contracts: These are software programs capable to automatically proceed the parties' obligations and to determine the concatenation of their respective obligations. Besides, the smart contract does not necessarily have to run the execution of the entire set of bonds arising from a contract but may just regulate one or more aspects of a complex agreement, recalling, where specifically designed, other smart contracts capable of integrating the flow of activities.

The key point that the legal experts have yet to solve lies in assessing the "documental" nature of a smart contract. That is, the probative value of a smart contract in the event of a dispute. In fact, the transactions of a smart contract are based on digital signature schemes which, from a legal point of view, do not satisfy the requirements of the form necessary to attribute the document to a specific subject. This problem is due to the "pseudonymity" nature of the addresses used in blockchain transactions, thus leaving open the question of the traceability of the addresses with respect to the subjects involved in the transactions. Some solutions have however been suggested: to identify a third subject (e.g., an exchange); to resort to a signature service by one of the two contracting parties by managing the contractual conditions "out of blockchain"; to use certified access management (e.g., through authorized digital signature certification bodies).

In conclusion, through continuous interaction with its Network Partners, Community NdT is witnessing that blockchain projects are leaving the phase of experimentation typical of proof-of-concepts (PoCs) to arrive at a much more robust and responsible phase made of: Search for stable and repeatable use cases that give rise to "best practice"; creation of aggregation centers that allow the creation of interest groups to solve common problems; search for interoperable, scalable, and stable technologies.