How Bitcoin and blockchain technology can benefit the waste management industry

Written by: Mike Jackson | Published:
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Well written and interestingly informative. I can see the future of crypto platform being used to ...

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By now, you have nearly all heard of Bitcoin, but maybe you are not aware of the huge impact this sometimes fantastical-sounding new technological development may have on our working landscape.

I hope to get you up to speed on first what Bitcoin is and some of the potential uses and pitfalls, and to also explain the technology behind it and how this could be used to help develop our industry.

What is it?

Bitcoin is just one of many digital currencies often referred to as cryptocurrencies. The original concept of Bitcoin is to replace currencies that have a central controlling system, for example, governments. The system is completely decentralised, which means no-one can control it or change it.

How can you use Bitcoin? Well at least this bit is pretty easy to explain, given it is a currency. The grand idea is that Bitcoin replaces all world currencies so that the entire globe can transact with each other using it. At the moment you will be able to use your Bitcoin in a few hundred different retailers or companies across the UK.

In the waste industry, Prismm Environmental accepts and pays for material for waste and recycling in Bitcoin; as does our partner shipping company Jay Phillips Partnership. Other countries have taken this payment method to different levels; for example, Japan has ATMs for Bitcoin.

If you don’t fancy flying to Japan to use an ATM, you can buy Bitcoin from an online exchange.And don’t worry, you don’t have to buy in multiples of one Bitcoin; you can buy £1 worth of Bitcoin if you want – the choice is solely on the purchaser.

Once you have a Bitcoin, it is extremely easy to make a payment transfer to anyone in the world. Depending on how you do this, there will only be small charges as a result of making a transaction.

These will be far below normal bank charges, especially if you factor in having to convert money to different currencies. Each transaction is verified within the system and takes minutes to complete instead of the days banks can often take.

The major challenge for the practical day-to-day use of this currency has actually been its own success. The value of Bitcoin has risen from $1,000 to $15,000 in one year. This sounds great, but it reduces the likelihood that Bitcoin will be used as payment, rather than to keep as an investment.

In the past couple of months, the price has stabilised quite nicely at around $15,000, but this does go up and down by a few thousand each day. You have got to be mad to predict the value in a year’s time, and I personally believe Bitcoin will get to around $25,000 and then stabilise by the end of 2018.

As such, many people who have purchased Bitcoin use it for investment and trading purposes, rather than as a currency to pay for goods and services.

Blockchain technology

The technology behind this new currency is called Blockchain. Fundamentally this is a distributed ledger, which means the system is decentralised. Instead of having one big server for your office (or a bank) storing data, you have multiple individual computers running within a network all consensually witnessing, sharing and synchronising data.

It is also computer-coded. Now, you may be thinking, “I don’t want everyone in the network to see my data.” To counter this, the system encrypts all public data, so technically there should be less chance of hacking issues under this system.

Blockchain also uses a consensus technique for validation. In simple terms, all computers within a network act as an individual validator of the information within the system.

For example, if you have 1,000 computers in a network and 10 validations are required to change a piece of the blockchain, the system will pick 10 random computers to check that the information in the blockchain is correct. This makes hacking and loss of data almost impossible.

Given the above characteristics of the blockchain, you can probably already start thinking of situations it will be very useful for. Basically, anything that requires trust, accuracy, security or efficiency.

Weight recording and paperwork

Does everyone in the supply chain always trust weights from a waste contractor? It is a sad fact that the old-school ‘tricks’ of waste contractors have left a lingering feeling of mistrust with many customers.

Weights measured by vehicle weighing systems and weighbridges linked to blockchain technology will be validated across the entire network of users and therefore there is far less opportunity for manipulation of figures.

Meanwhile, the UK authorities still insists on one A4 piece of paper being placed in every shipping container – even if that container is carrying 25 tonnes of A4 paper.

A blockchain solution to the Annex VII would mean all parties in the supply chain could enter information once and not have to send a single email or print a single piece of paper. The authorities would be given access codes to view the movement of each individual container.

Trials have already been done to test this, and it works. The only problem is that we as an industry would all have to agree to adopt this and then push the Environment Agency to agree and accept.


Data analytics and the PRN system

In a world of big data and machine learning, there is a huge challenge around the security of that data, who owns it and potential misuse. If the data were collected within a blockchain system, then a lot of these fears could be alleviated.

We could then collaborate on improving systems across the industry, for example household collections, and not have to worry about sensitive data ending up in the wrong hands.

Meanwhile, I don’t think I’ve met anyone in the past five years with a positive thing to say about the current PRN system. It’s clumsy and an old hat, at best. At worst there are many whispers of corruption and fraud rife in the process.

Unfortunately, current reform ideas and papers I have seen to date have not considered the use of blockchain technology – which would be perfect. A blockchain system could monitor the life of all materials from start to finish, on what day it moved from where and who had possession at each stage.

To take it even further, we could create our own crypto coin and get the system to regulate the financial transactions that need to take place between the supply chain.

It would take a lot of work, but it’s possible.

The future

I have provided a few examples of how this new technology can potentially be used and this is clearly just the tip of the iceberg. Fortunately, there are a lot of people far smarter than me already designing new systems for various industries, including waste and recycling.

There is a potential that blockchain systems will replace nearly all other software systems at some point in the future. Bitcoin and blockchain technology is a complex subject which requires much more explanation, but I hope I have helped you put the foot in the door.

Mike Jackson is managing director of Prismm Environmental.


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Comments
Well written and interestingly informative. I can see the future of crypto platform being used to power the waste industry; the traditional waste management system has failed to operate in manners consistent with ecological restoration of the planet. Leveraging the power of decentralization of management systems could do more to empower the communities across the world and compensate them for contributing to waste management in units far beyond what our current system can deliver. Thanks Mike and kindly advice me on how to deploy this idea to help the community i m currently working for in the Philippines to come up with a good white paperwork for a academic proposal. Thanks.

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