The tokenization of water resources

DATE & TIME: Thu Nov 08 2018 15:59:37 GMT+0100 (hora estándar de Europa central) SIGNEE: swisstechmakers (
DATA HASH: D40B73163E7581B3EC24A77237A1571CB6F951138386E6D34B4C8E03965AC5E

In this article we will see how the blockchain technology can be applied to the water supply sector. To do this, we will briefly describe, in the first place, what are the main applications of this new technology that is on everyone’s lips, nowadays.

The blockchain serves to:

  • Trace and register: By functioning as a database replicated and known by all participants and can not be changed (the accounting book verified by all to which we referred), allows to establish an immutable record of transactions made.
  • Represent assets (economic or not): The information in the database is a representation of value in blockchain, which can be equated to a certain amount of a specific asset or let it fluctuate according to free market rules.
  • Execute logical rules: They allow the programming of smart contracts, which are a system of automatic execution of (certain) terms of a contract between two or more parties according to some predetermined rules. Smart contracts allow the automation of processes, the reduction of intermediaries and bureaucracy and seek to operate under a principle of neutrality.


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Adding value to water services

The supply and sanitation services have been, since the 19th century, the most advanced civil infrastructures and with the highest degree of adoption of technological innovations. However, this is just an ideal starting point, to include new systems that incorporate a layer of added value to the service. Certain applications can undoubtedly be based on the use of blockchain.

First, the tokenization of water rights is an application that seems natural to the use of block chains. The tokens, which can directly represent the m3 of the resource, are negotiated in real time in a neutral context, but, at the same time, fully comply with the legal stipulations, by giving the regulator a relevant role in the determination of the rules of execution of the associated smart contracts. In another way: blockchain allows the virtual representation of the right and its negotiation, totally in accordance with the titles that grant it, in a faster, transparent and efficient way.

One step beyond the above is direct payment for resource use. The tokenization not only of the resource used, but also of the means of payment, allows collection in real time and for the exact use of the resource, in a more agile and efficient manner. The existing monitoring systems, and even those that follow the IoT trends can be incorporated, facilitate this application.

Finally, the traceability of the resource and its uses is, as we know, a key element of Hydrological Planning. With Blockchain we can certify in a transparent and safe way the origin of the water and the suitability of the use, its validity with respect to the stipulated in the planning and, if it is the case, the legality of the same in relation to the authorized volume.

Thus, we see how Blockchain opens a wide range of possibilities to provide water services of safety, transparency, efficiency and neutrality that raise the perceived value of the service.

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