Close-up of the server rack.

A system under development allows several companies in the ITAD value chain to share a digital ledger, recording the chain of custody of the material. | basiczto / Shutterstock

Industry stakeholders have taken the next steps on a blockchain-based project to better track data and reduce the possibility of fraud in buying and selling devices.

A non-profit organization known as the OBADA Foundation is driving the effort, which proponents say promises to increase transparency throughout the electronics lifecycle.

The software system under development allows several companies in the ITAD value chain to share a digital ledger, recording the chain of custody of the material.

Today, based on industry data security and recycling / reuse certifications, businesses should track the chain of custody for devices leaving their buildings, but this proves particularly difficult when multiple downstream are involved and not all of them are eager to share information.

As a result, gaps in tracking are widespread, which present data security concerns.

“I think we can say without much debate that many ITADs are not doing well,” said Rohi Sukhia, CEO and founder of Tradeloop, a used electronics wholesale marketplace. Sukhia is one of several industry professionals leading the OBADA effort.

Another great benefit of blockchain technology is “you don’t have to trust your business partners,” said Ron Lembke, professor of supply chain management and business analytics at the University of Nevada, Reno, and another leader who supports OBADA. . This is because the technology creates a record that cannot be revised later, helping to prevent fraud.

“It gives you the confidence that no one has tried to go back and change transactions,” he said.

Now, OBADA is looking for other companies to join the effort. So far, 23 member organizations have contributed $ 5,000 each, for a total of $ 115,000.

Organizers are looking for 78 more to contribute $ 5,000 each, raising $ 390,000 as part of a round B of fundraisers / signups. The official announcement of a waiting list for Round B will be given to Conference on the reuse of electronics, which will take place November 14-16 in Denver. The opening of the waiting list is scheduled for November 15th.

What is it and how does it work?

The system aims to solve key challenges in the ITAD industry, including monitoring the chain of custody to ensure data security.

In extreme cases, the lack of information sharing can lead to data breaches and severe penalties. The OBADA tool can allow ITAD service providers to demonstrate where the devices ended up and how they were processed, or it can indicate where the data tracking path went cold.

The heart of the blockchain system is a decentralized ledger, or the digital ledger shared by each participating company. The registry does not reside on the larger Internet that anyone can access; instead, participating companies and individuals manage “nodes,” which are software packages running on their own servers.

The registry is accessible and updated through the nodes. This means that individual ITAD companies will be able to offer blockchain access to their customers via their own node.

In some ways, it’s similar to stock trading, Lembke explained. Individuals don’t need a place on the New York Stock Exchange to buy and sell stocks, she pointed out, but realistically, most are in a relationship with a broker to facilitate such transactions.

In this case, organizers are planning to have around 100 nodes running the blockchain software, Sukhia said. The electronic devices themselves will be identified with a “Universal Serial Number”, which is an algorithmically generated unique address. Numbers are automatically identified when an ITAD company connects a device or, if the equipment fails to start, entered manually.

However, not everything is visible to everyone on the blockchain, Lembke said. Users, who access their resources on the chain via private passwords, have the ability to limit visibility, Sukhia said.

OBADA has been collaborating for several years with ISO (ISO / TC 307 AHG3) defining a standard called “Representing physical assets as non-fungible tokens (NFT)”. Having an ISO standard means that, in the future, any company from any industry that formats their inventory according to the ISO standard will be able to share it on the blockchain with any other OBADA participant. Essentially, companies inside and outside the ITAD industry will be able to seamlessly interact digitally with each other.

Fund the system

Of course, running knots costs money. “You have to pay someone to run the software and that someone in this case has 100 different nodes,” Sukhia said.

The costs will be paid with a digital form of “system credit” which allows a transaction to be recorded. (A “transaction” could be a hard drive that has been wiped out and sold to another company, for example.) Lembke described credits as the “gas fee” that powers the transaction record.

There is no company that processes gas taxes and no middleman takes a reduction. All gas tariffs are automatically distributed to the OBADA DAO members who manage the nodes, according to an FAQ document prepared by the project’s supporters.

Supporters have been working on OBADA since 2017. Sukhia wrote an article in the winter 2018 print edition of E-Scrap News detailing software technology and its potential.

Today, two organizations are mainly involved in the OBADA effort: the OBADA Foundation, which initially focuses on creating the standard and building the blockchain, and the OBADA Decentralized Autonomous Organization (OBADA DAO), which focuses on creating and managing the decentralized ledger.

The OBADA DAO already includes a list of important names in the industry. The 23 members of OBADA DAO are ASCDI, The Broker Site; CELX Advisory LLC; Restoration of DMD systems; Dynamic life cycle innovations; L’Aquila consultants; Electronic reuse services; First-class networks; Good recycling point; Greentec; iFixit; JT environmental consulting; International Trade Network; Quantum Life Cycle Partner; (The Repair Association); adventures of rhapsody; Technical specifications; commercial circuit; unduit; University of Nevada, Reno; Usody; World data products; and XS International.

Bring others aboard

23 OBADA DAO entries have guided the effort to date. There’s about $ 20,000 left in the bank, but that money could be spent in as little as two months given the costs of writing the software, Sukhia noted.

As part of Round B, organizers are now looking for an additional 78 members to join. Some have already been enrolled. On November 1, DAO members sent an ad indicating that 52 places remain available for members. A waiting list is available for members of organizations such as ASCDI, the broker’s site, ERC, iFixit, Repair.orgTradeloop and others.

When an organization joins OBADA DAO, it acquires membership in a special type of organization formed under Wyoming law. In fact, OBADA was one of the first DAO LLCs in the world, formed on the first day that such designation became available, Sukhia said. Unlike a traditional LLC, the organization has no centralized decision makers or money managers.

Membership in OBADA DAO entitles each company to an equal share of DAO membership interests. It also gives them a certain number of credits that will be used to keep track of IT assets and gives them the right to set up a node and receive compensation for running the node.

Organizations will have equal voting rights, rights to offer “node services” and rights to share all commissions and rewards generated by the blockchain / protocol, Sukhia said.

Sukhia also said that some companies have asked to invest more money – say $ 50,000 – to buy a larger stake in the group, but the answer is no. The goal is to ensure that a large company does not come in and take over the fledgling project.

“We want to make sure this is an ITAD-managed effort,” he said.

Mark Schaffer of Schafer Environmental LLC, a supporter of the OBADA effort, said the project is still “a pre-beta type of business.” His goal of him would be to potentially have some Round B members aboard as early as December 2022 or January 2023. He noted that it takes time to set up the nodes.

Sukhia said Round B should generate enough money to complete the technological development. “Then we could start production after that,” he told her.

The goal is to launch the system in 2023.

Technology can get confusing quickly. But, explained Rohi, “in the end, all we have here is a group of companies that have agreed to store their data in a spreadsheet in the same way.

“And that alone is a big deal.”

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