Chemical barcodes at the intersection of blockchain and chemistry
What if there were an immutable and tamper-proof blockchain counterpart in the physical world?
Supply-chain solutions are one of the most obvious applications of blockchain technology, and it's become the first port of call for a number of companies that aim to break into the blockchain space in a profound and lasting way.
Some of IBM's more prominent blockchain flagships are focused on supply chains, Citizens Reserve started with "supply chain as a service" in its goal to blockchain-ify one industry at a time, and the World Trade Organisation is keen to see blockchains take off. Meanwhile, supply-chain blockchain solutions can quickly save lives in fields like food safety and pharmaceutical tracking.
On the whole, blockchain solutions are widely regarded as the bee's knees in the context of reinventing supply chains and tracking things across their entire life cycle. But stumbling blocks remain.
For example, the veracity of a blockchain is only as good as the data that goes in. A blockchain might be immutable and tamper-proof, but if you can still mess with its data inputs, it's not actually tamper-proof. In that vein, there are enormous benefits to being able to track goods themselves across their entire life cycle, rather than just tracking a bunch of RFID tags or vehicle GPS signals.
One might even say there's not a lot of chemistry between the blockchain and the physical world yet, but what if there could be?
"I'm not going to invest the dollars invested in me building blockchain systems," said Haggai Alon flatly. "Our model is not to create our own blockchain monster. Other companies are doing it better than us."
Haggai Alon is the CEO of Security Matters, an ASX-listed Israeli firm that's more about molecular engineering than blockchain engineering.
Security Matters aims to create a system of customisable and uniquely identifiable "chemical barcodes." It's based on a method developed by the government of Israel over the last decade or so, Alon explained. He acquired the license to bring it to market. The idea is that Security Matters' chemists create uniquely identifiable molecular combinations that can be baked into anything and then read with handheld devices. This data runs through Security Matters' software and IT systems and can then be deployed on the blockchain systems created by Security Matters' blockchain partners.
Alon wasn't prepared to say who exactly those blockchain partners were, but he did emphasise that the blockchain side of the Security Matters solution is coming from a "big player" hailing from the established tech sector, rather than being a blockchain or cryptocurrency-specific startup.
The reason for going blockchain, Alon said, basically boils down to the fact that blockchain is most likely going to be the fabric of supply chains in the future, so anyone looking at that space needs to start thinking about blockchain now.
"We use blockchain for two reasons," Alon said. "A: To promote clients' capability to be leading and innovative in their segments. We are kind of like an external to internal means to push the technology and make them adopt it faster. B: We are using it as a means to enable the technology to be a dominant technology on supply chain, integrity, and all things related to supply chain liability."
The work is currently being done on Ethereum, primarily because it's popular and widely used enough that developments on Ethereum can be ported to other protocols where needed. This might be essential for a company like Security Matters that aims to work precisely to any kind of client requirements, which might include building a solution for a specific blockchain.
"The good thing about Ethereum, it can converge very easily to all other ledgers," Alon said. "Kind of like a basic common ledger that is very easy to transform, because we do not plan to dictate to our clients what kind of platform to use... Ethereum was a good base to work with."
The customer is always right
Beyond accounting for varying client preferences in blockchain platforms, Security Matters wants to be extremely flexible in the types of chemical barcodes it creates. One client might want something that can dissolve without a trace, while others might want something that sticks around through a product's entire lifecycle, come what may.
In the case of its work with the Hazera seed company, for example, one of the main challenges is to create an identifier that can allow for the tracking and identification of each and every seed. The identifier would need to be robust enough to stick with the seeds throughout their shipping and other rigours, but then completely and safely dissolve without leaving any trace after they've been planted in order to comply with regulatory requirements.
"You cannot interfere with the growing process and the nutritious part of the seed. The challenge here was to create a barcode that completely dissolves when the seed is planted," Alon explains. "Because this is how regulations and safety protocols are."
There's "no limit" to what can be done with these molecular combinations, Alon emphasises. "We let the client determine what his needs are... we let the customer walk us through it."
Most cases aren't like Hazera though, Alon notes, and on the whole, he expects more clients to want a signature that stays not only for the whole shelf life, but the whole life cycle of the product.
The place to be
Different products and materials are subject to very different requirements, and so require very different chemical barcodes. Ceramic, stone, metal, plastic, gases, chemicals of all kinds, grains and other foodstuff – and all the subsets within those material types – will call for different chemistry. The company is literally assembling unique new combinations of molecules to bake into literally anything (within reason), which naturally requires a range of specialised skills, especially because Security Matters will need to keep making new ones.
"It's about the ability to create a flexible and different sequence of molecules," Alon explains. "You can picture the DNA sequence – that's not what it is, but you can picture what it is – to create a different sequence of molecules each and every time, which is built to fit the substrate, the matter, the regulations, the safety protocols, but most importantly the commercial process we are providing for clients."
There's no chance of running out of unique combinations though, Alon assures.
And while it's tough going initially, as the team gets its head around different industries, it's going to get much quicker and easier to do certain materials the second time because there will be a modifiable template to work from, and they won't need to build it entirely from scratch.
The importance of building out this molecular library is also one of the things that brought Security Matters to Australia. It needed a country with a diverse range of industries to sharpen its teeth on, and for that reason and others, Australia fit the bill.
"Israel is not a good ecosystem to grow the technology," Alon observed. "Because Israel is very small and there's almost no basic manufacturing industry [or] processing and mineral industry. Europe is multilingual and highly regulated, America is expensive and big... Australia, put aside the distance which is nowadays less of an issue, is one language, [has] regulations which are very similar to American regulations, and in one country you get all dimensions of the economy from minerals to chemistry to processing to finished product...all segments. Australia is a perfect market to scale the technology."
It helps that "there's a lot of savvy tech investors in Australia after the end of the mining boom," Alon added. Plus there definitely aren't too many places in the world mining uranium, and it's probably a good idea to track that stuff.
Getting things done
Reading these molecular barcodes is also relatively easy, which was one of the key practical considerations behind Alon's decision to license the technology, and Security Matters licensed them along with the molecular signatures themselves.
"The readers are unique energy-based readers that are part of the X band family... this is part of the tech we got the license for," he said. "The thing about them is it can also be a handheld portable device, and it can be in any kind of commercial environment which makes it very appealing to any kind of commercial application that's around.
"I'm not the inventor, but this is one of the things that convinced me to take this technology, because the limitations and restraints are fairly nonexistent. And the reading is – it's pure science. It's stable; it's working. It can be scaled up so we can really make a business out if it."
And it's only going to get easier, Alon reckons. Creating the first unique barcodes for certain types of application is extremely difficult, but the second one is much easier. It's still very much in the applied R&D neck of the woods, which can make it tricky to predict the costs and time frames associated with the creation of specific signatures, but once Security Matters is over the hump, it will be much easier to turnaround client requests quickly and predictably.
If all goes well, a year from now, Security Matters will be able to take in a client and get a solution out the door in just a few months, Alon says, and the main part of that is getting its head around different materials and industries.
"Part of it is really learning to do it in such a way that fits the client's regulations, safety regulations, manufacturing protocols – creating it in such a way that is efficient – so when the solution is really deployed, it's fast and very easy and efficient."
There are a few essential areas that Security Matters wants to crack into first, but between them they might encompass just about anything you'll ever touch, starting from the heavy chemical roots of mass production before moving on to "everything related to any plastic products" including packaging and covering all industries from agriculture to electronics.
Security Matters is also paying attention to some specific use cases which could yield strong and relatively quick results, such as "everything related to ethical mining and conflict minerals."
For a sense of just how much room for improvement there is, it's worth noting that at their peak, conflict diamonds are estimated to have accounted for some 15% of the world's supply, and that number only dropped because the wars stopped, not because the tracking and "conflict free" certificate system was working especially well. Smugglers were getting around it simply by smuggling diamonds to other diamond-producing countries where they would be mixed with the less-bloody diamonds and entered into the economy.
The prevalence of conflict diamonds might be more dependent on the state of Central African politics than any existing tracking systems, and barring the development of an entirely new and much more effective system of identifying and tracking diamond origins, conflict diamonds aren't going anywhere.
From a strictly commercial perspective, this kind of system could also be a major win for Australia's diamond mining industry. For perspective, it's worth noting that Australia's Argyle mine single-handedly accounts for about 10% of the world's diamonds.
Conflict diamonds flood markets with more products, while undermining the reputation and revenues of the legitimate side of the shiny rock industry. Provably conflict-free diamonds attract a premium, and the ability to verify every single natural diamond in Australia as actually having originally been mined in Australia – no matter where in the world they go – would be extremely valuable.
Similar benefits can apply to almost anything else. For example, the system could be used to verify that wagyu beef is actually wagyu beef, that free-range eggs actually came from the chickens on a specific farm, that the medication you're taking is the real deal or that your fake Rolex is a 100% guaranteed fake.
And that's just scraping the surface. The idea is that any physical thing – solid, liquid or gas – can be verified in any way imaginable. If you get creative, which many people are, there are some enormous applications.
One example is a system to verify the legitimacy of physical IDs and paper documents. On 17 December, Security Matters signed an agreement with German ID company Veridos to do exactly that. Other examples include creating a system for tracking the exact origin of pollutants to prepare more effective responses or tracking the fabric used in clothing right down to the source so you can be sure that you're not wearing clothes made with slave labour. It could even be used as part of a profit-sharing system that allows the seamless monetisation of garbage itself by tracking things as they're recycled or re-used even if they're melted down in the process.
This has a lot of clear intersections with blockchain technology. At the most optimistic, but admittedly still not proven, side of things, these kinds of molecular barcodes might be the immutable and tamper-proof physical world counterpart that blockchains have been waiting for.