Musings on how the blockchain might help streamline California's water markets

Perhaps unsurprising with the historic drought, California is currently working on several major initiatives to upgrade its water data systems.  The state launched a water "data innovation challenge" and Dodd's AB 1775 offers a key framework for integrating existing public statewide water data sources necessary for a water market.

On a more local level, our plucky band of civic data scientists helped launch a unique data collaborative across local water utilities working together to pioneer new water data infrastructure and lower the transaction costs associated with sharing sensitive yet critical to analyze customer water use data. 

At the UC Davis "Data Sharing and Security" workshop last week, one leading lawyer floated the idea of using the blockchain to help validate data sharing.  We've been kicking around similar ideas internally so thought we'd quickly flesh those out a bit.  

The Blockchain offers an intriguing framework for ensuring accurate coordination across disparate data sources and might be worth experimenting with for already public data like those water data sources tasked to be integrated to streamline water markets per Dodd's AB 1775. 

At the risk of sounding wildly idealistic, that could provide a foundation for governing water markets.  Consider the following metaphor from the digital triumphalists over at Tech Crunch:

Blockchains loosen up trust, which has been in the hands of central institutions (e.g., banks, policy makers, clearinghouses, governments, large corporations), and allows it to evade these old control points. For example, what if counterparty validation can be done on the blockchain, instead of by a clearinghouse?

An analogy would be when, in the 16th century, medieval guilds helped to maintain monopolies on certain crafts against outsiders, by controlling the printing of knowledge that would explain how to copy their work. They accomplished that type of censorship by being in cahoots with the Catholic Church and governments in most European countries that regulated and controlled printing by requiring licenses. That type of central control and monopoly didn’t last too long, and soon enough, knowledge was free to travel after an explosion in printing. To think of printing knowledge as an illegal activity would be unfathomable today. We could think of the traditional hold...
— Tech Crunch

The Blockchain as the metaphor above and the Economist notes is ultimately a trust machine so could imagine leveraging that technology at two potential levels in water markets where trust is critical:

  1. Cleaning raw data -- transforming raw unstructured data into a standardized, mutually agreed upon format and verifying it s accuracy.  Think the SWP flows or fish counts inventoried and tasked to be integrated into more accessible and more standardized data formats per the Dodd Bill.  Easy examples involve things like unit conversions, date time conventions and data formats.  Harder examples involve leveraging scientifically rigorous modeling of raw sensor readings to get accurate assessments of say water quality.  All that needs to be verified and could be streamlined rather quite epic-ly via the blockchain.
  2. Accounting in water markets -- could also imagine leveraging the blockchain to account for water transfers in water markets and would help avoid the bureaucratic turf battles and overlapping jurisdictions that Tony Castalletto (cced) has discovered in his research of Ca's water data systems and aligns with my experience in water management.

Basically the blockchain could help power a "water data marketplace" to help ensure the seamless information flows that a water market requires.  Might also have broader implications for how public data gets parsed and utilized.  Anyway nothing to my knowledge like this exists in the world so could be fun to pioneer...




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