Compliance-as-a-Service on the blockchain
How the blockchain can enable growth for a gigantic sector that’s ripe for technological disruption.
What is
Organizations, products, brands, contractors, all need to be compliant with a set of standards and reference processes to signal their commitment to a set of working practices, social and environmental concerns, or requirements by a hiring partner. Standards bodies (such as ISO) have arisen out of this need and certification agencies are paid good money to ensure the description of these standards is met. Once met, they’re reevaluated within a certain timeframe and organizations get to proudly display their certification badge. Buyers can use this information to make qualification decisions and it is common that in the public sector, for example, it is a must-have requirement for applicants.
Codifying Compliance
One thing blockchains can do that’s unique to them is to codify compliance into the protocol via smart contracts that can be made fully auditable. With descriptive smart contract languages, we can ensure that the following process is followed:
1) A smart contract is digitized in natural language and follows the descriptive ruleset that is the body of the original certification. That becomes the digital twin of the physical process.
2) To be validated, the smart contract needs a) evidence to be submitted and signed by the applicant and b) evidence to be validated (and signed) by the certifier. This can happen automatically, at a maximum predetermined interval, or manually before the contract expires. I
3) The accumulation of enough evidence to trigger the issuance of the certificate, as part of the smart contract, with a timeboxed validity.
Forking Compliance
The fact that these are written in natural language, that the rules of the certification and its validation process are committed on the chain and thus codified as contracts, make them not only fully auditable but also accessible by third-parties, allowing them to scale them, apply them, remix them and repurpose them. This allows compliance to evolve faster and new versions to emerge given a clear governance model (as in who can submit and approve changes) or to result in completely new, more robust certifications with a new partner ecosystem supporting them, creating an evolutionary system based on buyer validation.
Designing & branding compliance
Finally, an ecosystem of apps and services can emerge out of this protocol. Certification marketplaces, procurement services, auditing, e-commerce applications, and APIs can all feed off this codified protocol and turn into a set of user and business-friendly applications.
Learn all about it
We’ve been working on a set of apps and services that consume this smart contract technology and expose it as an app and API for the organic & sustainable product industry. We’ve started with the winemaking industry, one of the richest, most productive and export-focused ones in the Portuguese landscape, and are now certifying products using the blockchain and some of the biggest brands in the country have begun to use this tech to have bio-certified products. Find out about one of these examples more here.
