It has been looming large for over a year, since it became clear that the government’s Brexit plan involved leaving the EU customs union – problematic if one wanted to avoid a hard border between Northern Ireland and the Republic of Ireland.
It almost popped up, explicitly, in the DexEU’s Brexit papers in July. A section exploring the post-Brexit “Facilitated Customs Arrangement” included an enigmatic paragraph – almost a wink to the initiated – proposing “the storing of the entire chain of transactions for each goods consignment, while enabling that data to be shared securely between traders and across relevant government departments, could reduce the need for repeated input of the same data, and help to combat import and export fraud”.
Still, like a technology that dare not speak its name, the reference was oblique, hinted at, never open. Until yesterday, when Philip Hammond finally said it, floating it as a solution to the Irish border imbroglio: “There is technology becoming available,” he boasted in his party conference speech. “I don’t claim to be an expert on it but the most obvious technology is blockchain.” Hammond might have no idea as to how a blockchain could solve the Irish border crisis, but, if we are to take his word, here’s how it could work.
First, a word of caution. Few concepts summarise the current Zeitgeist better than “blockchain”. The technology was first born – some critics say exhumed, adducing that similar tools had been around for decades – as the digital infrastructure for bitcoin, the cryptocurrency launched in 2009 by pseudonymous coder Satoshi Nakamoto. At its core, a blockchain is a decentralised ledger, a digital record of transactions maintained and updated by the parties using it rather than by a centralised guarantor; this structure, with no single point of failure, would theoretically make the ledger tamper-proof.
Then a swarm of variations on the theme came along – with different levels of safety, decentralisation, and sophistication. Blockchain came to mean a million things to a million people. And what had been born as a niche idea in some fringe circles, wound up becoming the latest, hyped, meaningless panacea bandied about in business and – eventually, now – political confabs. Today, everyone thinks they need a blockchain even if – as Hammond confessed – they are not experts on what a blockchain is, or does.
So, does the Irish border need a blockchain? Hammond was short on detail regarding how the technology would actually be used. One can try to guess, by having a look at companies that apply blockchain technology to supply chain. Mostly, they use blockchain to keep track of goods throughout the global supply chain. For instance, London-based startup Provenance did it with tuna: every time the fish changed hands – from net to supermarket – the blockchain was updated to show that transaction, allowing shoppers to check that their fillet was ethically fished.
At a more corporate level, IBM and shipping giant Maersk have been pursuing a similar objective with their blockchain venture Tradelens – which relies on a digitised ledger to share digital certifications and other provenance information about cargo.
In these contexts, of course, the blockchain is always used jointly with some kind of electronic hardware – a radio-frequency identification (RFID) tag, for instance – attached on the fish crate or shipping container, allowing the goods to interact with the digital ledger.
In Brexit Britain, one could see a blockchain of this type being set up if Theresa May’s Chequers Agreement actually goes through. Chequers’ solution for the border conundrum is to adopt the EU’s “rulebook” on goods, a set of standards all EU products have to comply with. A blockchain documenting British goods’ movements through the supply chain might be a way to verify their compliance with the EU rulebook. (Some of the most fanciful proponents of Brexit-related blockchain applications go as far as suggesting a cocktail of blockchain’s “smart contracts” and internet of things technology to automate custom duty payments at the border.)
Even if such a blockchain was up and running by March 2019, though, it is hardly going to solve the myriad problems which will mushroom in the vicinity of the border post-Brexit.
For one, checking blockchain-based certifications might be more efficient than checking paper-based ones, but still notably slower than the current system; that is a problem, when even minor delays likely wreaking havoc on the just-in-time supply chain products traversing the Ireland-Northern Ireland frontier by the thousand.
To make matters worse, according to the Freight Trade Association, each of the 6,000 trucks travelling daily through the border often carries tens of different products – which means the scenario of hundreds of heavy vehicles moving smoothly after a single scan of their blockchain-powered RFID tag is a pipe dream. Not to mention the additional controls that could have to be carried out to avoid smuggling and contraband.
Philip Hammond was trying to sound disruptive and up-to-date with his impromptu blockchain-as-a-fix remarks. Can we really blame him? After all, business leaders, visionary technologists, and all sort of professional chinwaggers have been peddling the blockchain salvation narrative for almost a decade. Yet, as the Chancellor of the Exchequer – and a self-styled non-expert on the matter – he should probably have abstained from proffering non-solutions.
This article was originally published by WIRED UK
