Ox-Chain: Towards secure and trustworthy circular economies through distributed ledger technologies

The Ox-Chain project responds to specific challenges identified by global consultants McKinsey & Company for the UK based charity Oxfam that highlights how much value is lost within the existing business model, which currently sends between 70-80% of its received second hand clothes to a recycling centre. The research team propose that by using distributed ledger technology, such as the Blockchain that supports the Bitcoin digital currency, a different business model can be developed that involves the donors, the shoppers and the staff at Oxfam in identifying the value of second hand items and helping them to move to places where they will can be sold.

The donation model that was developed in the 1940s by Oxfam still relies on individuals to make a judgement about the value of donated items. It is impossible for one person to know where an item can be better used or cherished - the result is that many items do not reach places within the Oxfam network where they might be resold and not recycled. Internet technologies such as distributed ledgers have the potential to turn the network of 670 Oxfam shops into an online auctioning platform, in which the collective knowledge of thousands of people can bid to keep items in the world.

Such a project offers significant insights into how decentralised technologies can better support business and society as we move toward what is described as a Circular Economy. A 'Circular Economy' in one in which resources are kept in-use for as long as possible, and their maximum value extracted whilst in use followed by the recovery of materials at the end of each service life. However, if more people are to become involved in the valuation of objects and materials within the ecosystems of business, communities and charities then we have to find ways to protect them. Moving to a sharing economy in which technology helps us to move things that we no longer need to places where they will be more valued, has the potential to disrupt existing models of trust, identity and privacy.

The use of distributed ledger technologies to manage permissions and privacy in such a way as to build the trust of participants offers a significant opportunity to demonstrate the potential to reshape our concepts of how our economies operate.

The research expects to make significant impact across a number of communities:

Oxfam: Of key benefit to users will be the development of a technology for the distribution of objects to places where they are known to have value. In the first instance the main benefactor for the project is Oxfam, who face significant challenges in adapting a 20th century model for the cascading of objects of value through their many high street shops. Oxfam will benefit from this project through the harnessing of distributed technologies such as ledgers to identify who needs what, where and when in such a way that identity is safeguarded and trust is built to produce a circular economy.

Community of Oxfam: Donors, staff, volunteers and shoppers all extend a trust to Oxfam that they handle goods toward the benefit of large international aid projects. However, the digital economy has facilitated the growth of online business models and the economic downturn has led to more competition in the high street. Ox-Chain will work with members of the Oxfam community to design a secure, trustworthy and participatory business model that places them at the heart of a new economy for the flow of goods back into society where they are most needed. Designing a new and secure economic model for the abundance of objects that are already in circulation will significantly enhance the quality of life of potentially millions of people.

Building trust through new technologies: Recruiting and retaining participants is vital to ensure that the project develops secure, trustworthy and privacy models that encourages a community of users to adopt a new technology that changes their stake in an organisation. The project's team benefits from experience in parallel domains of recruitment and retention with community members (e.g. work in the past with Oxfam managers, staff and shoppers etc.). The participatory agenda that is supported in depth by Newcastle and Edinburgh is based upon a commitment to involving staff, shoppers and donors at all times. Understanding their interests, views and experiences are vital for Ox-Chain to be adopted as a secure method of contributing to Oxfam projects.

Wider society: We aim to maximise translation of our research by taking an active and participative approach to knowledge exchange. We will do this through the instantiation of an Advisory Board made of cross sector experts who will see the transferrable impact of Ox-Chain. Our two primary partners, Oxfam and McKinsey, offer significant pathways to impact. Oxfam has led the way in charitable business models to fund large scale global challenges; a significant shift in their approach would resonate across charities and related businesses world wide and demonstrate how wealth generation and distribution can be readdressed. McKinsey and Company are constantly seeking new economic models that address contemporary and near future challenges, thus a successful demonstrator of secure, trustworthy distributed ledger technologies would provide them with a model that can be adapted and applied to the wide range of sectors that they consult upon.

Circular Economy: Working with national organisations including Waste & Resources Action Programme (WRAP), Zero Waste Scotland, and the Ellen MacArthur Foundation, we expect to demonstrate how digital technologies can support best practices toward a circular economy. Pop-up events, meetings with appropriate and relevant businesses, as well as conference contributions and a web based media campaign will present Ox-Chain as a viable platform for demonstrating how distributed ledger technology can transform business.