Rutger van Zuidam of Dutchchain and Winners of the 2018 Blockchaingers Hackathon.

On April 10th, Mattereum hosted the third Internet of Agreements® (IoA) conference at the Google Campus in London. IoA® is a vision for global supply chains and logistics, integrating national laws and regulation with international commerce through the application of technology such as blockchains and smart contracts.

Rutger van Zuidam’s talk centered on the Blockchaingers Hackathon, and the philosophy and ideals which inspired it. He began by unpacking the notion of trust-abundant systems, using urban traffic as an example of a collaborative environment whose infrastructure and protocols are built on trust. He then emphasized how the blockchain/DLT space is not only an ecosystem but a movement: projects and initiatives in the space can allow stakeholders and users to reach consensus on purpose and intention. He then outlined three phases of development: the Deep Dive which establishes purpose, the experimental Hackathons and MVPs in which the idea matures, and the Venture phase in which capital enables the work to accelerate and achieve its goal. He then described the structure, development tracks, and rating system of the Hackathon, before inviting the winners of the Identity track on stage to present their project.

Berit Fuss and Jelle van der Ploeg presented their winning project, an application built in 48 hours that provides transparency and provenance to the medicine supply chain. Berit provided some context to the tremendous amounts wasted in the mismanagement of medicine: $30 billion due to counterfeiting, $60–90 billion due to late delivery, and 10% simply lost. Jelle then gave a step-by-step walkthrough of the project and how they simulated various distribution centers in Africa, and laid out the short-term roadmap.

Van Zuidam concluded the presentation with an announcement of the EU Blockathon taking place June 22–25 in Brussels.

Video:

Transcript:

Rutger: Thank you so much for having me here — the reason is probably not just because we just did a hackathon. I think the most important reason is that we had the global digital identity track as one of our global digital identity track. It’s extremely exciting for me to be here, because what we want to do is interconnect all the international networks and ecosystems that are actually building stuff and basically gain momentum.

Quite a few people took part in the hackathon, we had over a thousand visitors throughout the weekend, over 700 participants in seven tracks. I’ll take you through why we are doing this, as part of the largest open ecosystem-driven innovation program in Europe, as well as how the hackathon actually is let’s say an exponential innovation instrument and what came out of it, and then finally we’ll have the winners of the global digital identity track presenting their cutting edge solution here on stage with me.

Let me start by explaining why I think this Internet of Agreements is so important. I really believe that in order to get to the next level, let’s say in international collaboration, we need an abundance of trust in order to solve all the global challenges that we are facing as a global society. If you look at how we coordinate our society, how we coordinate our planet, you could say that we use an operating system to “run” our society, and that operating system is rooted in the past century, where trust is still based on institutions and paper. That’s why we have the lovely IT infrastructures that we have now, where everything is based on databases and the organisations running those. And that’s okay, but we clearly see that we are moving away from that, and that we need a new kind of operating system run by us, that we are going to use to coordinate everything we want to do on this planet in a much better way.

Let me ask you a question: if we talk about trust, can you give me an image of trust? What does trust look like?

Vinay: Seatbelts.

Rutger: Seatbelts.

Vinay: They never fail.

Rutger: Thanks to Volvo for opening up that patent, right? Any more images on… I mean, it is easy to have an image of a tree, but trust, it is so important, it is the crucial thing for any type of human collaboration. What does it look like?

Comment: Stepping off the edge of a cliff.

Rutger: And then?

Comment: And trusting!

Rutger: That you will encounter gravity? [laughs] Yeah, okay. [laughter] Who is in a trust business here? Are you involved in generating trust, facilitating human collaboration? Who here drives a car? Think about this: if you enter a car, you participate in a traffic system. Do you encounter acquaintances, do you meet acquaintances down the road a lot? No.

Trust enables us to collaborate without the need of knowing each other, and this is exactly what we do in the lovely system, in the collaboration we do as humans, which we call traffic. How do we organise trust in the system of traffic? Let’s start with infrastructure: we maintain it, we have a safe infrastructure. Then we have a protocol, it’s the same for everyone, we have rules. Also, if something goes wrong, we need insurance, to make sure that things get fixed. We also have ambulance, we have police governing the rules. We also audit drivers, we audit vehicles, we certify them… There are all kinds of organisations and certificates that are added to the system which allow us to take part in this system of traffic autonomously and trust each other. All you have to do is plug in a key and drive off and then you’re in the system and it works. That’s something to keep in mind when we are designing these new online, collaborative ecosystem I think, is that the trust is not a 1 or a 0; it’s a certain amount of trust we create, in order to make these systems run smoothly and better.

When we say we are moving away from the old operating system, because it is basically failing more in our interconnected world, and we’re moving to networks of trust, [05] we also need a new kind of mindset and a way to approach this. Any good blockchain “project” or initiative that really works is more like an ecosystem, it’s more like a movement. There are all kinds of different values that were important in our past, but in our current operating system moving to other values where we can get this exponential leverage.

Then the question becomes if you want to take everybody with you on your road, because we’re talking about the fabric of our society here, so it’s not like we can just develop something new and have that disrupt our society. Because it’s not just ecommerce, it’s not just information or just media, like we have done up until now with the Internet; this is about our society and every process that is linked to it, this is serious business.

How do we explore new land without maps? That’s where we thought of our open innovation program, which is really ecosystem-driven. You need all players, all stakeholders on board, like Michael and Vinay just discussed. We need to create movements where all stakeholders, including the end user, are involved, and find common ground to be able to get towards understanding, and then get into a collaborative mindset with each other. These connections are forced so to speak, not by just talking and sharing ideas and opinions, although that’s of course still very important, but by actually collaborating with each other and building new stuff. Because this next operating system is not just owned by the government, private businesses; it’s owned by everybody.

This is why we developed a base in the ecosystem: we have a preparative phase, where thousands of people participate, then we have the momentum, and then we have the part where we accelerate. Kind of by accident, we did the largest blockchain hackathon in the world, I expected 200 people and 500 showed up, and that’s when we did it for the first time, and believe me, you learn a lot from an event like this. This year we kicked off the innovation program in the Dutch National Hall of Knights. Vinay was there.

Vinay: It was held in the throne room of the Dutch Crown. Imagine a 600-person blockchain meeting in Buckingham Palace. This is how far things have advanced.

Rutger: Yeah. This also shows how strong the partnership is with the Dutch government, but also I think the willingness of the Dutch government to invite the international community and discuss at this conference what we should do this year together in order to move forward to the next level. What that next level is depends on everybody, so this is really a collective effort to get to a common understanding of that.

Then we are entering the deep dives: on a technical level, on the legal and regulatory level, we did that in collaboration with financial markets, how do you fund initiatives, but also on specific topics. As I said, we had seven tracks, global digital identity is one of them, so we did one of the deep dives on identity at the Ministry of the Interior and Kingdom Relations, and they take it pretty seriously, opened by the Dutch State Secretary. We do that on health, on the future of pensions, on the energy transition, on digital nation infrastructure, the machine-to-machine economy, and I think public safety and security, we do that with the Dutch police, and there you can see all these different parties involved.

What we also do is deep dives with our Members of Parliament. Because, like it or not, you do need some politicians in the movement as well, especially when it’s about trust. You need to connect with the representatives, and the other way around as well: they need to connect with the ecosystems as well.

Last Friday we kicked off the largest blockchain hackathon in the world, and I want have the pleasure to show you the after movie which we edited yesterday, so it’s really, really fresh, it’s not even out on YouTube yet… There you can see Vinay having a lot of fun [laughs], he’s really taking it in.

A little bit about the hackathon: it’s three days, but actually it was four days, because we had 11 masterclasses where everybody could really boost their knowledge, whether it is about Hyperledger or Ethereum or Ocean protocol, one last chance to get the latest knowledge from everybody, we had the pleasure of Mihai Cimpoesu as well doing a masterclass on Ethereum.

Then, what is really important at a hackathon, is that you have a lot of roles that support all the teams. Imagine, there are 20 people from the largest pension fund provider in Europe, managing 400 billion Euros of pension fund money, 20 people from them working with the teams so that it can get all the knowledge from the pension chain and the pension domain they need to create those new solutions. And it’s not just about problems. I think if you only look at solving problems, you miss all the opportunities that arise where you do something new, and just all kinds of new opportunities arise from there, and you will see at least one example of that, where the world completely changes because there’s an introduction of a new building block.

We developed our own canvas, it’s a derivative of course of the business model canvas, because you want to get from idea to prototype really fast, and you need a canvas that helps you in a collaborative space. This is open source, so feel free to use it, we have all the canvasses of all the teams on the website, [18] and we use a really appreciative approach in scoring all the teams. Because it’s all about the solution and the team on one hand, and then of course it’s about the potential of the team and the solution after the hackathon, and also the impact the solution can have.

It’s a second edition, we’ll probably do more. [applause] Thanks for that. I want to invite the winners up here, a big round of applause for the winners of the identity track, ladies and gentlemen, Jelle van der Ploeg and Berit Fuss! [applause] They are part of the acceleration program, and we fit that on each of the winning team, we take them to a lot of international stages and connect them, try to really get them going, because you want to reach from the prototype level towards the first 100 users within a couple of months and see how that would work, and there’s all the funding and support that’s required in the ecosystem.

Berit: Thanks for Rutger’s nice video, which I hadn’t seen myself, so I don’t think I have to a really long introduction. The problem we wanted to solve is the fact that in the distribution of medicine, especially to low and middle income countries, in our case we were specifically looking at African countries, a lot of medicine gets stolen, completely lost, we don’t know where they end up, probably on a black market, but also counterfeit medicine is being put back into the distribution channel. The yearly cost of this is huge, $30 billion a year of medicine gets counterfeited, medicine that gets delivered too late, $60–90 billion wasted because of non-transparency, and on top of that, more than 10% of all medicine gets lost.

Those are monetary problems, but another big part of the problem is the fact that when a patient over there gets a box of medicine, he’s actually not sure whether that medicine will work, because he doesn’t know that it’s real. So what we tried to do is we tried to create not just transparency throughout the whole supply chain, by recording each and every handover moment where a medicine passes hands from one party to the other, but also we created an application that at the end of the track allows you to establish provenance, to tell whether or not there’s real medicine in the box.

I think Jelle will take you through our demo. We were not able to bring everything along in our small suitcases this morning, so Jelle and some of my other colleagues were working up until late last night to at least create a video of the demo, and Jelle can talk you through it.

Jelle: Yeah — thanks Berit. Let me just quickly explain a little bit about the demo scenario that we have set up. Nigeria is where the downstream part of the medical supply chain starts. The upstream part, from the manufacturer of the drugs to the national distribution centre in Lagos, is managed quite well through ERP systems, and there’s not really a lot of lack of trust there.

So the starting point was from the ERP system the medicine arrives to the national distribution centre in Lagos, and there we have de-serialisation data available on the palettes, the boxes, and the boxes inside the boxes of the medicine. In the middle we have the governmental centre of Nigeria, Abuja, in the middle of Nigeria, and a smaller city called Minna, west of Abuja, where a healthcare facility is. What we’re going to mimic here is the supply chain from the national distribution centre to a regional distribution centre to the healthcare facility in Minna. What you see there are four Raspberry Pis, we’ve added NFC readers to the Pis. Pi is just a small microcomputer with an added NFC readers on top of it, the device costs about 20–30 euros so they are rather inexpensive, and if you harden them a bit you could actually apply them in these more rural areas as well.

What we did then is on the medicine boxes we applied these NFC tags, these are reasonably tamperproof NFC tags. Lastly, and this was actually an idea of another team that we kind of made an exchange with: they were allowed to make use of our API and we were allowed to make use of their ID to camouflage the medicine, kind of like they do with secrets but for a completely different purpose. The idea is to not show on the box what is actually inside the medicine, so reducing the incentive to actually steal it out of the supply chain. What is on the box is a QR code with which we can scan the medicine, to see at the end of the supply chain whether it is a counterfeit medicine or not. What happens there is the healthcare professional at the end of the supply chain, or the patient himself, can scan the medicine and can see the whole provenance of the medicine in the chain, and actually make sure that this medicine was also there when it came onto the chain as de-serialisation data into the blockchain.

Like Berit said, last night we set up this demo environment. This is my colleague Sven, he’s going to take the steps to guide the medicine through the supply chain very nicely in a medicine box over there. The first step is to take a palette of medicine, that you see there, now being checked out and now being checked in again in the regional distribution centre, and then we de-serialise it. We go from the big box to the palette to smaller cases, which we check out of the regional distribution centre and we check in again at the healthcare facility, so you see it nicely popping up on the map as well. And then lastly we scan it with just a regular QR code reader and it takes us to a Web address, and this is what the healthcare professional would see if he scans it, and he can see the provenance here, the registration events, check in and check out in which location and which date, and then he can decide to dispatch the medicine to the patient. This is what it looks like, green means it’s not counterfeit medicine. With the registration events and when he dispatches it, we see here the whole provenance that the medicine took up until being checked out at the healthcare station.

That was the demo that we did, and we managed to build this in 48 hours. Of course we did a little bit of prep work mainly around the NFC reader, just to make sure that that would all work, but the whole effect of doing this over the weekend… Like I said, we borrowed an idea from another team, and we got a lot of inspiration from the track sponsors and the track mayors as well, so the environment that we’re in to actually produce this greatly helped.

What we’re going to do next with this is we hopefully will sign on a client soon with which we can bring this into a pilot, and we will harden our solution a bit better, so do a little bit more with the NFC text, do a little bit more with the QR codes, to also make those tamper-proof, which is possible, and hopefully start piloting this in Nigeria. That’s the idea. [applause]

Rutger: Awesome — Jelle and Berit, thanks so much! I want to present one opportunity to you all, because we are also taking this to the EU level — it might be a bit sensitive here in Britain, but I would say let’s keep collaborating. Imagine you could have an intercontinental impact on the entry level in the market, so the EU is basically presenting that opportunity to everybody who wants to make a difference with a team.

Work with manufacturers, work with customs, work with logistics partners, ports, airports, work with retailers, how can Amazon prove that their third-party sellers aren’t selling any fake products, and work with customers. Blockchain or identity by itself isn’t going to change anything; you have to use it, and people will make that change. Therefore, I invite you all to become blockchaingers — thank you very much! [applause]