To mark the launch of a series of monthly meetups around the blockchain in a bar near the port of Beirut, the ecosystem of Lebanese entrepreneurs and aficionados in this technological sector met on Thursday, March 14 for a drink. Indeed, several Lebanese companies and startups have already taken over the innovation of the blockchain, a system that allows digital data to be stored and transmitted in a secure and transparent way without going through a trusted third party.
What were they looking for that evening, these forty or so participants from different backgrounds? For some, probably a first understanding of what this mysterious concept is about. They learned that the blockchain functions as an unalterable register of data blocks updated in real time by a decentralized network of users who make the computing power of their computers available to solve equations, which allow the entry of a new block. Any block recorded after another one makes the previous block unalterable, ensuring the immutability of the chain. Everyone can also consult this chain and the transactions recorded on it at any time. It is therefore possible to ensure that A has transferred a specific data or value to B, without revealing the identity of these individuals. Finally, each member of the network constituting the blockchain has on its own server a constantly updated copy of all transactions in the blockchain. Any doubt about the reality of a transaction can therefore be removed by checking that all members of the network have the same information. The only (economically unviable) way to hack the blockchain would be to corrupt more than 50% of all the machines on the network, which in the case of Bitcoin are counted in hundreds of thousands around the world.
In short, we are talking about an ultra-secure and immutable system that allows data transfers to be easily traced in real time without a centralized third party. What other participants in the meeting co-organized by Corporate Systemic Intelligence and the Lebanese Association for Digital Transformation came to explore were the practical applications of the blockchain in various sectors, in the world and in Lebanon. In fact, this new technology has given rise to countless uses in fields ranging from logistics to humanitarian, finance and health.
Renewable energy P2P trading
That evening, a United Nations Development Programme engineer, Ahmad Diab, questioned the impact that the use of blockchain could have on improving the management of renewable energy and its sharing between producers and consumers or between prosumers. Smart contracts — ie: tools that make it possible to predict the automatic completion of a transaction as soon as one or more conditions previously entered in the blockchain are met — give a new impetus to the concept of peer-to-peer energy exchange. More simply, in such a system, any individual or community owning photovoltaic panels could automatically resell the excess produced energy not consumed to other members of the grid in energy deficit. All energy transfers and transactions would therefore be recorded in real time and available online to all, without central authority: it is easy to imagine the time, energy and money savings that could be achieved.
E-commerce and KYC security
In the field of e-commerce, Alexandre Pedemonte, director of blockchain firm Vistory, which employs fifteen developers including five with a blockchain specialization in the Beirut Digital District, then explained how the blockchain made it possible to secure the Know-Your-Customer procedures necessary to fight against fraud and money laundering. His company has developed Gleeter, an application that also allows everyone to calculate their measurements by taking three selfies with an accuracy of around 95%, thus drastically reducing the returns of poorly fitting products — these represent 30% of online clothing orders in Europe and result in the destruction of the product, a useless waste according to Mr Pedemonte. Buyers and sellers, whether they are brands like Zara or individuals selling back their clothes, are then put in contact in a blockchain-secured environment while artificial intelligence suggests to users the styles they could like by extracting from the web all the products corresponding to their size and tastes.
Vistory also targets the oil industry, by proposing to trace the origin of an oil can through the blockchain from its place of production to the end user, each party being able to follow the can’s itinerary on an application. This type of logistical wake on the blockchain is also used by supermarket giants such as Auchan and Carrefour, who track eggs, milk or meat in order to certify the origin of the product and possibly identify the location of any product from a group unfit for consumption. Maritime logistics champions such as Maersk, in partnership with IBM and dozens of port terminals, have similarly developed a solution to track a container’s route at each stage of its journey. The blockchain platform allows all actors in the supply chain to monitor this journey and share administrative documents relating to the cargo.
Listing and explaining all the practical uses of the blockchain would be extremely tedious, but the fact remains that several Lebanese entrepreneurs involved in this technology have been able to meet and exchange ideas, especially in the field of fintech. Financial technologies, including blockchain, remain almost absent from the Lebanese finance landscape while they are flourishing in Egypt or Jordan, and of course in the UAE which is becoming a regional hub in this area. In Tunis, CSI presented to the Union of Arab Banks how blockchain and digital currencies can promote financial inclusion by allowing unbanked or rural populations to access financial operations, and diasporas to send money back to their home countries at a lower cost.
There is no shortage of entrepreneurial expertise in Lebanon. Is the brake on innovation then coming rather from a reluctance on the part of financial and political institutions to digitize and an unfavorable regulatory framework?