How using blockchain can help communication and build circularity
As part of Circulate’s collaboration with the Disruptive Innovation Festival, we’re featuring insights from the lineup, in advance of their performance at the DIF. Find out more at thinkdif.co, and don’t forget to tune into this session on blockchain for the circular economy, live on 20 Nov, 2017 14:00 – 14:45 GMT
The circular economy has become a priority for state authorities and businesses across Europe. However, most organisations that want to embrace the circular economy cannot achieve fully it by themselves. While cooperation between different entities to achieve a higher goal is certainly not new, everyone can agree that there are problems to overcome and agreements to be made. These problems can relate to areas as broad as legislation, culture, transparency or retaining a competitive advantage.
One example in which lack of cooperation between stakeholders limits the transition to a circular economy can be found in the Electrical and Electronic Equipment (EEE) industry. As one of the fastest growing waste streams, more e-waste than ever has to be processed by recyclers. In order to make the most of this stream, recyclers often pre-sort the waste manually, e.g. on battery presence, printed circuit board (PCB) size, etc. This sorting operation, however, could benefit enormously if recyclers had the right information on products in the first place. Instead of opening products one by one to manually inspect them, recyclers could make automatic sorting decisions based on information that is provided by other stakeholders, for instance the manufacturer.
However, there’s an elephant in the room. Unfortunately, most stakeholders are not keen on sharing this data, as often times that is what gives them their competitive advantage.
The goal of Circularise, an EU funded startup, is to solve these communication barriers in the value chain and enable a circular economy for everyone. Circularise is being developed as an open source platform where relevant stakeholders can come together and have direct access to any critical information they might need.
While this information exchange is inherently linked to issues around trust, traditional solutions to overcome inertia often lack the foundations needed to support transparent cross-stakeholder collaboration.
Circularise is approaching this issue in a novel way, by using blockchain technology and zero-knowledge proof – in which a stakeholder can prove a statement without sharing any other information than the fact that it’s true. This allows any stakeholder to retain ownership of information, while at the same time allowing others to ask so-called “smart questions” to the data. To relate back to the previous example, the recycler can now ask this system whether a product contains a battery, a large PCB, or any other component, and the answers will be generated on the servers of the manufacturer.
No product information is shared, only answers that can be trusted. Moreover, the model doesn’t rely on users trusting Circularise as a company. The code is open source, and the system is built in such a way that even the developers of the platform cannot see secure data either. What’s more, the entered information cannot be altered without leaving traces, making it a tool that could be used in other applications, such as regulatory audits.
Like a true blockchain startup, to make use of the Circularise platform, participating organisations will need to own CIRQR tokens. These tokens are used to pay for the utilisation of the system and to generate labels which are then applied directly onto products. Tokens can be exchanged for CIRQR labels by engaging with a smart contract on the Circularise platform.
Now fast forward seven years into the future, and your product reaches its end-of-life. The CIRQR label is scanned by the recycler, the materials and components are identified, and are properly reintroduced into the value chain. The recycler (or any other party that can close material loops) has the ability to unlock the CIRQR tokens that were stored in the smart contract, and to resell (or recycle…) them back to producers. This means that even the token itself is circular.
We have the technology available today to accelerate the transition to a circular economy, but in many cases these processes are too inefficient or are yet to be deployed at a practical level. During the Disruptive Innovation Festival, Jordi de Vos and Mesbah Sabur, the founders of Circularise, together withTU Delft Senior Research Fellow Dr. David Peck will hold a session on “Using Blockchain to Merge the Physical World with Digital Information”. During this conversation, they will give you a glimpse of what Circularise can do for the circular economy, and show how different organisations are already using it today.
Make sure to join the Google Hangouts session, live at thinkdif.co, on 20th November at 14:00 GMT.