Blockchain tech will transform global water access and management

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Access to clean water is a basic human need, yet billions of people around the world still struggle to obtain it. According to the World Health Organization, more than 2 billion people live in countries experiencing high water stress, and this number is expected to increase due to climate change and population growth.

Traditional water management systems have struggled to address these challenges, often due to inefficiencies, lack of transparency, and inadequate resource allocation. Blockchain technology offers a promising solution to these challenges by ensuring equitable access and sustainable use of this important resource.

Current status of water management

Water management today faces many pressing issues. Inefficiencies in water supply, distribution, and use, coupled with a lack of real-time monitoring, often lead to wasted and misallocation of resources. Many water resources are not being used to their full potential due to inadequate infrastructure and funding. For example, a report by the Environmental Protection Agency (EPA) indicated that the United States will need to invest $625 billion over the next 20 years to repair, maintain, and improve the country’s drinking water infrastructure due to aging pipelines and other infrastructure issues. Additionally, in the United States alone, household leaks can waste an estimated 900 billion gallons of water per year nationwide. This is equivalent to the annual domestic water use of approximately 11 million homes.

In addition, corruption and mismanagement in the management of water resources can lead to unequal distribution, and disadvantaged communities often bear the brunt of water scarcity. For example, South Africa struggles with numerous challenges to water security: drought, inadequate water conservation measures, outdated infrastructure, and unequal access to water resources. The country faces significant water scarcity, with demand expected to exceed supply by 17% by 2030.

Additionally, the global water industry is largely monopolized, with a few key players controlling a significant portion of the market. These companies have significant influence over the water supply chain and often prioritize profit over fair distribution and environmental responsibility. This concentration of power can lead to inflated prices and limited access for vulnerable populations. The global bottled water market alone is projected to reach $509.18 billion by 2030, with these large companies capturing a significant share of revenue. This monopolization further exacerbates existing inequalities in water access and highlights the need for more decentralized and community-focused water management solutions.

Source: Grand View Research The potential of blockchain in water management

Blockchain technology can solve these problems by providing a transparent, secure, and decentralized platform for managing water resources. This approach offers several advantages:

Transparency and accountability. Blockchain’s immutable ledger ensures that all transactions and data entries are transparent and cannot be changed once recorded. This transparency can reduce corruption and ensure that water resources are allocated fairly and efficiently. For example, blockchain can be used to track water usage from source to end user, providing a clear record of how water is distributed and used. This level of transparency can hold authorities accountable and ensure that water resources are managed sustainably. Efficient resource management. Blockchain can facilitate the creation of smart contracts, self-executing contracts where the terms of the agreement are written directly into the code. These contracts can automate water distribution based on real-time data and direct water to where it is needed most. For example, smart contracts can be used to manage urban water supply systems, automatically adjusting water distribution based on consumption patterns and real-time demand. This can help optimize water usage, reduce waste, and ensure that households and businesses get the right amount of water at the right time.

In Dubai, the Dubai Electricity and Water Authority (DEWA) has launched a blockchain-based smart water grid initiative as part of its broader smart city strategy. The project integrates blockchain technology with IoT sensors to monitor water usage in real time, manage distribution, and detect leaks. The decentralized ledger ensures data integrity and transparency, enabling more efficient water management and reduced waste. DEWA’s initiative aims to improve sustainability and resource management in the rapidly growing city, and highlights the potential of blockchain to support urban water management and conservation efforts.

Community participation and ownership

Through blockchain, individuals can directly control and monetize their access to water resources, eliminating the need for third-party intermediaries. This direct control model allows local communities to make collective and transparent decisions about their water use. By managing their water directly from the source, communities can tailor water management practices to their specific needs, promote equitable distribution, and enhance a sense of responsibility and stewardship.

Additionally, future models could enable people to monetize their water access through web3 technologies. For example, a community-to-business (C2B) model could allow individuals to sell water directly to businesses. In this model, individuals do not have to own the water outright, but can make a profit by staking their tokens during event sales pools. This approach not only supports sustainable water management, but also creates economic opportunities for community members. Additionally, a “Secure by Burning” protocol could be used to provide water allocation rights. This protocol allows individuals to reclaim their rights, providing a real sense of water security and financial opportunity. This system not only secures future water allocations, but also increases token scarcity and value.

Additionally, there is a pure sense of investment that comes from investing in water resources. This leads to potential financial returns and dividends by addressing the inefficiencies in water supply mentioned earlier. By investing to finance infrastructure projects such as building factories and improving distribution systems, more water can be brought to communities and additional economic opportunities can be created.

The C2B model, the “Burn for Security” protocol, and the monetization of water access through investments in water resources create economic benefits for society, promoting a more equitable and efficient water management system.

Overcoming challenges

While blockchain technology has the potential to improve water management, there are challenges to its adoption. The complexity of blockchain systems and the need for technological infrastructure can be barriers, especially in developing regions. Additionally, there are concerns about the significant energy consumption of blockchain networks. However, technological advances and the development of more energy-efficient blockchain solutions are helping to reduce these concerns. Furthermore, training and capacity building are essential to ensure stakeholders understand how to use blockchain technology effectively. Governments, NGOs, and private sector partners need to work together to provide training and support to communities and water management authorities.

Blockchain technology offers a practical and effective way to improve water management. Beyond addressing inefficiencies, blockchain empowers communities, promotes sustainable practices, and opens new economic opportunities through models such as community-to-business (C2B). As we face the increasing challenges of climate change and population growth, blockchain represents not only an innovative solution, but a fundamental shift in how we manage and value water resources. Embracing blockchain in water management is essential to creating a sustainable, equitable future and changing how we interact with and protect our most vital resource.

Jean-Hugues Gavarini

Jean-Hugues Gavarini is the CEO and co-founder of LAKE (LAK3), a real-world asset company that uses blockchain technology to decentralize access to the global water economy. LAKE aims to provide access to clean water for all, protect water resources, and distribute water to those in need through innovative technology. Jean-Hugues has had a diverse career spanning the luxury, fashion, and footwear industries. His professional journey includes notable successes at Mellow Yellow, Cremieux, and Tod’s. Growing up between Silicon Valley and the French Alps, Jean-Hugues has always been immersed in technology and freshwater resources. In 2018, Jean became the CEO of Lanikea Waters, a water solutions startup based in the French Alps. In 2019, the LAKE concept was born, embodying his commitment to innovation and sustainability.