Blockchain is overhyped, but it’s also perfect for California’s drought problem

california uses blockchain and iot to manage groundwater use content farmingiot illustration v01b
Will Hawkins/Digital Trends

California has a water problem.

The state is an agricultural powerhouse, producing over a third of the United States’ vegetables and generating over $50 billion in a year, but its vast and varied output requires a similarly colossal amount of water.

For decades, farmers and businesses have pumped groundwater out of California’s aquifers, the permeable layers of rock that hold water underground, and the results have been frightening. As aquifers drain faster than rain can replenish them, the ground actually sinks, a phenomenon called “subsidence.” In areas where building and roads rest atop the ground, this can cause damage.

“California is huge for American agriculture,” Alex Johnson, Freshwater Fund Director for The Freshwater Trust, told Digital Trends. “But it’s heavily groundwater dependent, and there are some basins in the central valley that have been so depleted over the last couple decades that they are 20 feet lower in elevation because those aquifers have been drained and all the ground is settling.”

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The Freshwater Trust

As the aquifers sink, they don’t merely pose a risk to infrastructure on the ground. Rock and soil collapse together, removing the space where water could once accumulate. This could be catastrophic, as according to the California Department of Water Resources, in average year groundwater accounts for 38 percent of the state’s water supply; in dry years that number can jump beyond 46 percent.

If California is going to prevent further depletion of aquifers and survive droughts like the one that afflicted it from 2011 to 2017, the state will need to manage its groundwater usage. In the central valley, a group of organizations is working on a project that could stem the tide by combining two technologies: the internet of things (IoT) and Blockchain.

A project born in the cradle of humanity

The first big challenge was figuring out how to monitor groundwater levels across the state. Luckily, this is an issue that people in other regions of the globe have been grappling with for years, and have already developed solutions for.

“We’re primarily doing this today in East Africa,” says Evan Thomas, CEO of SweetSense, a company that uses satellite-connected sensors to monitor rural water supplies. “There’s actually 30 percent less rainfall over East Africa over the past every year for 30 years,” he explains, “so drought is basically every year now, instead of every ten or 20 years, and the consequences of drought are really severe. 250,000 people died in 2011 because of the drought in Ethiopia and Kenya, and almost ten million people were impacted.”

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Stephanie Tatge and Nathan B Wangusi The Freshwater Trust

In Kenya, SweetSense partnered with IBM Research, and with support from the United States Agency for International Development (USAID), they built a system to use IoT sensors to “monitor groundwater use and demand, correlate that to rainfall surface water availability, and then also, most importantly, use that data to identify when a water pump fails so that we can go out and get it fixed and make sure that people have access to water year round.”

The use of IoT is exciting: Here is a technology many people associate first with kitchen appliances and Alexa speakers, being used to save lives from drought. IoT, the internet of things, refers, broadly, to the ability of machines to communicate with each other.

Here is a technology many people associate first with appliances and Alexa speakers, being used to save lives from drought.

Imagine the modern, techie apartment: You might have a smart home hub that, when the clock strikes 7 a.m., tells your smart speaker to play an alarm, your coffee machine to start brewing a pot, your TV to turn on and change the channel to the morning news. If the temperature outside is below a certain threshold, your smart thermostat cranks up the heat. Although you may have programmed these instructions initially, the machines can “talk” to each other and carry out instructions without a human micromanaging them.

Importantly, devices can communicate with each other without syncing up with the wider internet, and this is crucial for SweetSense’s work in Africa.

“The reason that it’s IoT is we’re completely off-grid,” Thomas explains. “There’s no cellular service, there’s no power, there’s no utility hookups, so we have a self-contained, solar-powered sensor that’s attached to these pumps that can monitor water supply and connect it over satellite networks.”

The sensors can fit in a person’s palm, and are powered by a “2-watt solar panel which is the size of a small paperback book.”

A shared resource requires shared information

Being able to accurately measure groundwater use is a crucial step, but it’s not enough to simply have accurate instruments. Groundwater is a uniquely complicated resource to manage. It all lies underground, out of sight, and because of how crucial it is to a variety of industries, everybody wants their sip at the fountain.

“I think there’s an inherent difficulty in water management and natural resource management where it’s hard to track who does what and keep track of that over time,” Johnson says. “There’s not a lot of trust between users, especially between users and the government or local management agencies to other entities wanting the same resource.”

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The Freshwater Trust

Groundwater usage is an excellent example of the tragedy of the commons, the idea that presented with a shared resource, individuals will decide to maximize their own use of it, despite the fact that, if everybody does so, it could deplete the resource and doom the group.

Management of a shared resource like water, one that people feel naturally entitled to, requires not just the survival of the group depends on everyone rationing their use. It requires trust. Each individual wants to know that everyone else is playing by the same rules.

“Water is a shared resource,” says Nathan Wangusi, Technical Lead for Water at IBM Research Africa, “which means if we are extracting from the same aquifer we need to have conditions about how much we’re extracting, what rate we’re extracting at … so that idea of consensus is very important.”

A market-based approach

Wangusi and his team work in Kenya, in a region he describes as “sparsely populated” and “largely pastoral … heavily dependent on groundwater.” It’s also a region in which it’s hard to deploy many technological solutions. Wangusi and his team decided to focus on how to monetize water rights.

“You think of any other natural resource, like minerals, land, access to ability to pollute,” Wangusi explains, “you get those rights through some permit … if you have a carbon credit, you get some permit to put a certain amount of carbon into the environment.”

Likewise, if you own land, you can grow crops and have a right to sell those crops. If you own a mine, you can extract minerals from it and sell them. Groundwater is trickier though.

“What’s different about water rights, more so than other natural resource rights, is that you cannot convert water rights directly … into a commercial instrument.”

Wangusi and his team settled on the idea of groundwater credits. A credit provides the owner the right to extract a set amount of water from the ground, and if the owner doesn’t want to make use of that right themselves, they can “convert them into commercial instruments that you can trade in an open market.”

Markets are about trust, however. The people involved need to trust that the product they are buying — in this case the right to extract groundwater — is valid, and they need to trust that nobody else is gaming the system. Why would a farmer restrict themselves to only the water they can afford to buy a permit for if they suspect their neighbor is pumping water with reckless abandon? Everyone needs to have access to that information, and know that the information is trustworthy.

A system that everyone can trust

“The technology that is designed to support consensus and democratized access to information,” Wangusi says, “is by definition Blockchain, because you have this idea of a ledger that is immutable, and then you have the idea of a smart contract that can move transactions within that Blockchain network.”

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The Freshwater Trust

Blockchain is the technology that underlies cryptocurrencies like Bitcoin, but it has a lot of potential for other applications. Put simply, a Blockchain is a decentralized ledger, shared among everybody who wants access to it.

When any number of parties make a transaction or other deal (say, registering a “smart contract”) on the Blockchain, the other parties on the network verify it and secure its place in the record. The information is available to all users, and nobody can alter it after the fact, because the data has to line up with the copies everyone else has.

SweetSense’s sensors can accurately track the amount of groundwater pulled up from any pump in the system, and convey that information to IBM’s Blockchain via satellites, so the data flows even in remote areas. On the Blockchain, users can buy and sell their water credits, even registering smart contracts to automatically buy or sell when the price is right, and everyone can see which pumps are functional or not, where water is being pumped, and so on.

From Kenya to California

The system, developed in Africa, is a boon for the pastoral communities that depend on groundwater there. To the Freshwater Trust, it also appeared to have a lot of potential for California. Although people might not immediately link Kenya and California in their minds, both regions rely on agriculture, and both rely on groundwater.

Thomas had worked with the Freshwater Trust in the past, and they saw a chance to collaborate.

“Because TFT was trying to figure out how to help farmers actually monitor water and how to help farmers comply with the Groundwater Sustainability Act,” Thomas says, “and most importantly, how to help them in a way that eases the pain of new regulations and creates market incentives for participating.”

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The Freshwater Trust

The creators of the project were excited by the prospect of what they call “reverse technology transfer,” of a system engineered in the developing world coming to help California, the heart of the tech world.

“It’s easy, I think, in American culture, to feel like we’re the best,” Johnson says. “Because we’ve been told that, or we’ve told ourselves that a lot. There are lots of places where innovation is happening, and I think the speed of technology has democratized where some of those really interesting technological advancements come from.”

Given California’s central role in the tech industry, there is a bit of irony there, the great exporter of innovation drawing on technology from a far-away land.

“California is pretty techy in a very specific sense,” Johnson says, “and that generally isn’t around agriculture. So I think there’s probably lots of areas where the developing world has teachings and has innovations that can teach the developed world that.”

Humanity’s back may not be pressed against the wall yet, but we can feel it looming.

What this IoT/Blockchain system offers is a way of regulating groundwater usage that is transparent and incorruptible, which is helpful given that farmers, whether in Kenya or California, can be wary of government mandates.

“If we can create a system that is credible, that is immutable, and shows that overall that resource, month after month, year after year, is being managed sustainably, but gives the users the privacy and the security that they need to actually use that system,” Johnson says, “now we’re talking.”

“The legislation is going to force demand for these new types of systems,” he adds, and so organizations like the Freshwater Trust are trying “to figure stuff out before everybody’s back is against the wall …”

The Earth is getting parched

Humanity’s back may not be pressed against the wall yet, but we can feel it looming.

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The Freshwater Trust

“We don’t have water available year-round, really anywhere in the world, and it’s becoming a crisis,” says Thomas. “Drought is exacerbating this issue, demand is exacerbating this issue, and we need to make sure that water is available where it needs to be and when it needs to be. And we aren’t going to be able to do that the old way,” he adds. “We’re not just going to build new dams again, or steal all of the water out of the mountains. We need to be able to manage the water where it is.”

Drought doesn’t just hurt agriculture. A recent statement from the USDA Forest Service states that 18 million trees have died in California since 2017, bringing the total dead since 2010 to 149 million. Those husks stretch across millions of acres, a sea of kindling waiting for a spark. California’s prolonged drought has coincided with an increase in wildfires, including the 2018 Camp Fire, the deadliest wildfire in California’s history.

It’s going to take robust public policy and technological innovation to stave off disaster, and California is leveraging both.

“We as humans have access to almost godlike technology right now,” Johnson says. “Let’s have a sense of urgency and try things and apply some of these technologies where they are most needed.”

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