Tokenization of assets is expected to be one of the main trends in 2019. Anything from a pizza delivery service to an artwork can be subjected to tokenization. Together with AI development, tokenization gives mankind an opportunity to order goods and services carried out by autonomous machines and pay with tokens for the work completed. Here we take a glance at 5 facets of urban life that may be changed by the combination of digitized assets and blockchain.
1. Supply chains
Online shopping has been replacing traditional shopping. Changes in consumer behavior entail supply chain restructuring: warehouses and production should be located closer to city dwellers, whereas delivery services should hire more employees than offline stores. However, with the development of AI and blockchain technologies, such work gradually tends to be delegated to robots whose maintenance costs are expected to be lower than personnel costs.
In order to implement such a scenario, we should give robots rights to make decisions and to dispose of small amounts of money, namely, tokens. The Ethereum infrastructure allows for interaction between humans and robots, as well as between robots and robots in the form of a smart contract. For example, your smart fridge orders fresh milk to be delivered by an autonomous drone every morning.
In this scenario, the fridge acts as a buyer, choosing the lowest price according to specified parameters. If the milk runs out, it orders a delivery and pays for it through a smart contract. The delivery drone, in turn, acts as an independent participant in the same way. It is able to determine when technical support is needed, and spend a certain number of tokens for repairs. A milk factory also acts independently, with minimal human intervention. Automation allows it to keep the lights off during the work process. Such a smart factory, fridge and drone form a new type of supply chain, freeing up dozen hours spent on going to the grocer.
2. Product origin
Scandals often hit headlines revealing inhuman conditions in manufacturing environments for products consumed by the Western world. It was recently revealed that T-shirts produced for a charity initiative in defence of gender equality were produced at a factory in Bangladesh, whose employees were insulted and abused by the managers if they didn’t achieve production targets. Moreover, according to the source, any employee would have to work for 3-5 days if they wanted to buy one T-shirt. Similar stories relate to the production of food placed on our supermarket shelves.
Blockchain can help track a product’s origin, since each stage of production is recorded in a ledger and cannot be altered. The buyer can thus be aware of the product components, the country of origin and all production chains, including information about whether or not the product was produced in accordance with labor standards.
3. Consumer behaviour analysis
Producers of goods and services are often unable to predict consumer behavior in the long run. This may lead to a shortage or to overproduction, with billions spent on building real estate which ends up being unclaimed and abandoned.
A feature of the above-mentioned smart devices is their ability to record and analyze data obtained from each other. This data is based on ever-changing consumer behavior. Machines may notice that you drink less coffee and lower your milk intake. If millions of people are seen doing the same, it gives manufacturers a signal that they need to be prepared in advance to reduce or refocus their production.
4. Environmental monitoring
Robots equipped with sensors to monitor the quality of water and air are becoming more and more popular. The current systems for monitoring water quality are mainly procured and monitored by states and municipalities. The research these authorities conduct is largely expensive and ineffective due to the low speed of data collection and processing. However, it is of real importance for city dwellers to be aware of what kind of water they drink.
Autonomous drones connected to a blockchain are now taught to draw water from a reservoir and measure various chemical compounds the sample contains. The machines are independent and capable of accepting tokens for fulfillment of assignments and the provision of data received.
One of the recently-trialled projects utilizes Libelium’s water sensors in combination with the Robonomics Network created by developers specializing in smart cities and Industry 4.0. A solar and battery-powered water drone is able to measure water temperature, pH, dissolved oxygen, water conductivity, NH4+ and NO3- ions.
A controller takes measurements during its trip across the reservoir, sending this information to an on-board computer via USB. The computer is responsible for sending the information to the system through the protocol on Ethereum over 4G, to make data public and connected with a certain agreement in the form of a smart contract.
The project has been deployed in Russia where 70% of drinking water comes from the surface. Since up to 60% of this water does not meet sanitary standards and more than 10 million Russians are currently lacking access to quality drinking water, pollution remains a major issue in the country.
Similar drones can perform a variety of tasks to help environmentalists and emergency services. This is mainly through the observation of the territory from the air to prevent forest fires, illegal deforestation, unauthorized land seizure or excavations.
Combining blockchain, robotics and IoT allows autonomous drones to communicate with one another and offer their services to customers. It enables people and machines to negotiate and reach “smart agreements” without intermediaries.
5. Opening new markets
Blockchain opens access to markets previously available only to professionals or those who artificially retained their monopoly on expertise. In addition, tokenization allows the creation of an equivalent of any value, including assets that have not previously been expressed in a digital form.
One of the most notable examples is carbon units, acting as the equivalent of CO2 emitted into the atmosphere by enterprises. Until recently, trade in these units was opaque and slow. Now blockchain allows them to be freely traded. This opens up a green capital market for countries, businesses, and even individual smart buildings for keeping records of their emissions.
Perhaps the main takeaway from this discussion is that blockchain technology and digitization of values creates decentralized markets for data, goods and services. This enables direct communication between humans and robots, frees up a huge amount of time, eliminates routine and gives access to markets previously closed to laypeople.