Source Code: Your daily look at what matters in tech.
To give you the best possible experience, this site uses cookies. If you continue browsing. you accept our use of cookies. You can review our privacy policy to find out more about the cookies we use.
yesTomio GeronNone
February 23, 2021
Together with its previous $50 million buy of the digital currency, Square holds about 5% of its cash equivalents in Bitcoin, the company said. The payments company joins others such as Tesla that have bought Bitcoin as cash equivalents.
Tomio Geron
Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. Before that, he worked as a staff writer at Forbes, covering social media and venture capital, and also edited the Midas List of top tech investors. He has also worked at newspapers covering crime, courts, health and other topics. He can be reached at tgeron@protocol.com or tgeron@protonmail.com.
Transforming 2021
The future of retail is hiding in an abandoned mall
The warehouse is moving closer to customers' houses as ecommerce eats the world of retail.
Microfulfillment centers could help retailers compete with the largest ecommerce companies.
Photo: Scott Eisen/Bloomberg via Getty Images
March 1, 2021
Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.
March 1, 2021
The American mall has been decimated by the rise in ecommerce. But soon, it may also be their savior — sort of, at least.
Long before the pandemic kept people at home in front of their computers, buying everything they needed to see out lockdown online, malls were on the decline and ecommerce was on the rise.
<p>"It's kind of that Amazon effect, where shipping used to take a week for your retail order," said Mitch Hayes, the VP of retail and ecommerce at Swisslog, a logistics automation company. "And Amazon has now said, 'We can get anything to you pretty much next day.'"</p><p>To get to a place where most retailers can reliably compete with — or even surpass — Amazon's delivery schedules, experts argue that products are going to have to get closer to the customer. But as the population density of the U.S. continues to <a href="https://www.statista.com/statistics/183475/united-states-population-density/" rel="noopener noreferrer" target="_blank"><u>rise</u></a>, getting close to customers means building fulfillment centers in smaller spaces, which goes against the giant outer-city warehouse model that retailers have relied on for decades. To get smaller and nimbler, retailers are having to turn to automation that fits anywhere — like malls. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
</div>
</div></p><p>And it's starting with groceries. </p><h3>Speeding up groceries</h3><p>A few years ago, companies started to realize that they could pay people to walk around grocery stores, pick up a week's worth of shopping, and drive it to a customer's house. Around the same time, retailers realized that, without too much rejigging of their stores, they could offer customers the option to buy products online from their local store and pick them up without even having to get out of their car. </p><p>Grocery orders tend to be fulfilled quite quickly, given that groceries don't typically like to sit around in unrefrigerated areas for too long. Even before the pandemic, e-grocery and curbside pickups were on the rise, but they <a href="https://www.businessofbusiness.com/articles/grocery-delivery-instacart-costco-whole-foods-data/" rel="noopener noreferrer" target="_blank"><u>skyrocketed</u></a> during lockdown. Because of the logistics of trying to move Instacart shoppers, as well as regular shoppers, through a store, most grocery stores can fulfill about 100 online orders, according to Steve Hornyak, the chief commercial officer at Fabric, a company that specializes in building automated fulfillment setups that can fit in small spaces, called microfulfillment centers (MFCs). The problem: "Their demand is five to 10 times that," Hornyak said. "And what they're doing is pushing customers' [orders] out or losing customers, because they're at full capacity."</p><p>In the past, the solution to a problem like this was to just build more distribution centers and get more drivers delivering to stores. But in most parts of the country, the available infrastructure means that there's still going to be a bottleneck on the roads to get truckloads of goods to local distribution centers and out to stores. This is part of the reason why companies have been investing in microfulfillment centers in recent years. The concept allows retailers to retool existing properties to more efficiently store goods, sell them, and prepare them for online orders all in one place. "The network is already built, it's called their stores," Hornyak said.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
</div>
</div></p><p>"The inventory has to be close to the population in order to make money," Swisslog's Hayes said. "I'm in just north of Cincinnati, there's certainly ways that they could hold inventory in Indianapolis and still get it to me in a very quick amount of time — but it's going to cost an arm and a leg."</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNTY5Nzk4Mi9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYyODY0MTA4Nn0.Yvszojahby_U5fLOIAmKsUJwZbo9ZXbm3uLOc_KUEjQ/img.jpg?width=980" id="16a12" class="rm-shortcode" data-rm-shortcode-id="5e8704585b7ce22bfcff7ebe6f240548" data-rm-shortcode-name="rebelmouse-image">
<small class="image-media media-caption" placeholder="Add Photo Caption...">Swisslog's fulfillment robots in action.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Image:Swisslog</small></p><p>The answer instead is to rely on last-mile delivery options in urban areas, and use the floor space grocers already have. To do that, grocery chains are looking at companies like Fabric, Takeoff Technologies and Attabotics to better use the spaces they have. The back room storage space of many grocers holds their excess inventory, but is set up to move products onto shelves for consumers to grab themselves and check out. But a change is on the horizon: By taking all of that inventory and moving it into mechanized totes that can move through a three-dimensional robotic storage system, the backroom can transform from a holding pen to a fulfillment center. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
</div>
</div></p><p>These intricate, automated structures allow grocery store workers to call up everything they need for a customer's order. The totes containing various items move through the system, going to the worker picking the order, who can then place them all in bags and get the order ready to ship out in a matter of moments. And unlike a human who's walking through a grocery store for the first time that day, the MFC knows exactly what's in stock when it's time to fulfill an order. Fabric's Hornyak said that a 10,000-square-foot center could pick about 25,000 items per day, and that for small orders of about three to five items each, that's about 5,000 to 8,000 orders processed each day. "The order density is absurd," Hornyak said. "It's 5 to 10x what a traditional warehouse or retail location can do."</p><p>Swisslog announced late last year that it'd begun working with H-E-B, one of the largest grocery store chains in Texas. Earlier this month, Ahold Delhaize, which owns Food Lion, Giant and Peapod, among other grocery chains in the U.S., <a href="https://roboticsandautomationnews.com/2021/02/17/ahold-delhaize-expands-micro-fulfillment-with-swisslog-and-autostore/40785/" rel="noopener noreferrer" target="_blank"><u>expanded</u></a> its partnership with Swisslog to bring its concept to more stores and distribution centers. Hayes said that much of the rest of the year will be spent rolling out more fulfillment centers with clients.</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNTY5Nzk5Mi9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY0NDMyMTIxMX0.GidEqRVIhfXkZBf6yB0zlIODeNneiN6JrgVY0hhp7ZE/img.jpg?width=980" id="74bc4" class="rm-shortcode" data-rm-shortcode-id="eb1830cc8ed44e6b1069d70bc5b673da" data-rm-shortcode-name="rebelmouse-image">
<small class="image-media media-caption" placeholder="Add Photo Caption...">How Swisslog envisions a microfulfillment center adding onto an existing grocer's retail location.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Image: Swisslog</small></p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
</div>
</div></p><h3>Coming to the rest of retail </h3><p>But for many other slices of the retail industry, stores either don't have the space to keep enough inventory to fulfill online orders, or the bandwidth to pivot to serve them. This is where Fabric comes in. The company recently completed a microfulfillment center in Brooklyn, and is working on another not too far away in Long Island City, as well as two sites in process near Dallas, and one for FreshDirect near Washington, D.C. For the Brooklyn location, Hornyak said it's working with a "global household name brand" (but wouldn't share which) as an "anchor tenant" to the facility. The center will be able to fulfill orders for a range of retail clients, and much like malls have anchor stores that take up more real estate, so will these fulfillment centers. </p><p>Hornyak compared the premise for these multi-tenant centers to AWS or any other cloud provider. "It is a pure services model," he said. "You pay for capacity: how many totes you're taking up in my system, plus the volume of orders and the configuration of the order." Fabric is working with all sorts of delivery providers — gig economy apps, third-party logistics firms, local delivery companies, and the major delivery companies — giving retailers the option to work with partners they might already have in place. </p><p>While microfulfillment has seen its earliest traction in grocery, the rest of retail seems not far behind. When consumers start to be able to get groceries delivered whenever they want within a few-hour window, they'll expect the same elsewhere. "The question will come from the consumer: If I can get 20 to 30 items, why can I get a shirt that I saw online at Nordstrom tonight?"</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="5">
</div>
</div></p><p>And recent events have shown the value of moving products closer to customers. Even beyond the barren shelves many experienced at the start of the lockdown last year, communities across Texas struggled with a similar bereftness when the recent snowstorm in the region knocked out power for much of the state. "In periods like this, everyone still has access to their cell phone," Hayes said.</p><p>Others in the industry agree that they expect 2021 to be a boom year, thanks in part to latent interest ramping up. "The market is becoming educated about the power of networked microfulfillment," Scott Gravelle, the CEO and founder of the MFC firm Attabotics, told Protocol. "Non-traditional players with deep pockets are actively looking to enter the space, both on the VC side and with large established companies. Our pipeline is full."</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNTY5Nzk3OC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY1NzIzNDAyNn0.tH4KnuIuHJeh2uVkWwaQvMnzB0A9OcZcsn4vLoOoQyQ/img.jpg?width=980" id="095ee" class="rm-shortcode" data-rm-shortcode-id="dd95c5d80419c18fc21d67245c3ffba3" data-rm-shortcode-name="rebelmouse-image">
<small class="image-media media-caption" placeholder="Add Photo Caption...">Walmart is working on a variety of automated fulfillment setups.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Photo: Suzanne Kreiter/The Boston Globe via Getty Images</small></p><p>"There's an inferno of same-day demand that Amazon's created," Fabric's Hornyak said. Fabric is working on bringing an MFC to a Walmart where there will likely be a glass divider between the robots and customers, so they can see their orders being fulfilled. "We'll be a giant vending machine," Hornyak said. "This is retail 2.0"</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="6">
</div>
</div></p><p>Which brings us back to the mall. For those retailers that don't have the space for MFCs and don't want to be buying additional real estate, multi-retailer facilities like Fabric's can be the solution. In Brooklyn, a formerly industrial section of New York, there are many warehouses that can be cleaned out and in the space of a couple months be turned into a fulfilment center buzzing with robots. In other areas, that might be abandoned or half-empty malls. "Typically when you're talking about microfillfilment, you're talking about odd spaces," Swisslog's Hayes said. And there's a lot of odd spaces across the U.S. </p><p>And there's no guarantee that this will catch on. People are always going to need groceries. Retooling facilities or buying new real estate is expensive and time-consuming, and having too much demand for ecommerce is a far better problem to have than not enough. Parts of the retail industry, especially grocery, are slow to change overall. "Being able to deploy your human capital into some of your new business ventures, whether that's MFCs or self-checkout, has always been a challenge," said Curt Avallone, the chief business officer at Takeoff Technologies, one of the first movers in the MFC space. "Most retailers are keeping their best people in the areas that they're currently making most of their money."</p><p>But with giant companies like Amazon and Walmart managing to squeeze quicker delivery times out of an increasing number of products across the retail industry, finding ways to compete seems paramount. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="7">
</div>
</div></p>
Keep Reading
Show less
Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.
Sponsored Content
The future of computing at the edge: an interview with Intel’s Tom Lantzsch
An interview with Tom Lantzsch, SVP and GM, Internet of Things Group at Intel
February 28, 2021
Saul Hudson has a deep knowledge of creating brand voice identity, especially in understanding and targeting messages in cutting-edge technologies. He enjoys commissioning, editing, writing, and business development, in helping companies to build passionate audiences and accelerate their growth. Hudson has reported from more than 30 countries, from war zones to boardrooms to presidential palaces. He has led multinational, multi-lingual teams and managed operations for hundreds of journalists. Hudson is a Managing Partner at Angle42, a strategic communications consultancy.
February 27, 2021
An interview with Tom Lantzsch
Senior Vice President and General Manager of the Internet of Things Group (IoT) at Intel Corporation
Edge computing had been on the rise in the last 18 months – and accelerated amid the need for new applications to solve challenges created by the Covid-19 pandemic. Tom Lantzsch, Senior Vice President and General Manager of the Internet of Things Group (IoT) at Intel Corp., thinks there are more innovations to come – and wants technology leaders to think equally about data and the algorithms as critical differentiators.
In his role at Intel, Lantzsch leads the worldwide group of solutions architects across IoT market segments, including retail, banking, hospitality, education, industrial, transportation, smart cities and healthcare. And he's seen first-hand how artificial intelligence run at the edge can have a big impact on customers' success.
Protocol sat down with Lantzsch to talk about the challenges faced by companies seeking to move from the cloud to the edge; some of the surprising ways that Intel has found to help customers and the next big breakthrough in this space.
What are the biggest trends you are seeing with edge computing and IoT?
A few years ago, there was a notion that the edge was going to be a simplistic model, where we were going to have everything connected up into the cloud and all the compute was going to happen in the cloud. At Intel, we had a bit of a contrarian view. We thought much of the interesting compute was going to happen closer to where data was created. And we believed, at that time, that camera technology was going to be the driving force – that just the sheer amount of content that was created would be overwhelming to ship to the cloud – so we'd have to do compute at the edge. A few years later – that hypothesis is in action and we're seeing edge compute happen in a big way.
<p>The last 18 months have been a wild time to be in technology. We've seen edge compute come to life to help businesses adapt during the pandemic. At the same time, we are also seeing how 5G is going to drive up interest, especially from a networking perspective, rather than a use-case perspective. We also see lot of people that are focused on their data, but the <em>algorithms</em> that companies train with the data are going to be their critical assets. It doesn't matter what company or what industry; <em>this</em> will really become the differentiator for many companies.</p><p>And particularly amid the backdrop of the pandemic, we've seen how companies are using technology to either bring workers back in safely or <a href="https://www.intel.com/content/www/us/en/corporate-responsibility/covid-19-response-sensormatic-article.html" target="_blank">serve their customers in new ways</a>, <a href="https://www.intel.com/content/www/us/en/customer-spotlight/stories/brentwood-academy-customer-spotlight.html" rel="noopener noreferrer" target="_blank">educate children in new ways</a> -- all things that have accelerated the digital transformation that had been underway. I recently read a <a href="https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/how-covid-19-has-pushed-companies-over-the-technology-tipping-point-and-transformed-business-forever" rel="noopener noreferrer" target="_blank">McKinsey survey</a> that reported on the "speedup in creating digital or digitally enhanced offerings. Across regions, the results suggest a seven-year increase, on average, in the rate at which companies are developing these products and services."</p><p>And based on what we're seeing at Intel, those are lifesaving and industry saving investments happening today – completely re-designing the way that <a href="https://www.intel.com/content/www/us/en/corporate-responsibility/covid-19-response-mic-article.html" rel="noopener noreferrer" target="_blank">patients are treated</a>, and businesses operate.</p><h4>What are you particularly expecting to see this year?</h4><p>What I find most interesting is the work that combines IoT with networking capabilities – and I think this is going to be a year of expansive exploration and working with our customers to put these two things together to solve real business challenges.</p><p>When we first started the integration of networking technology and operational technology capabilities and layered that across the industry verticals, we could count the amount of interested customers and opportunities on one hand. Last year, it was five times that many and this year we see that number increasing significantly already. So, we're excited to see the industry continue to build excitement to scale those types of deployments.</p><h4>What role does AI play at the edge and in what way is Intel involved?</h4><p>An AI use case recently grabbed my attention: employees in a restaurant being screened by a device that checks temperature while the employees are washing their hands – and provides a determination on whether they'd done it adequately before they report to work. I have seen other applications using similar technology in the <a href="https://marketplace.intel.com/s/offering/a5b3b000000TiMSAA0/using-ai-to-make-construction-site-safer?language=en_US" rel="noopener noreferrer" target="_blank">construction industry</a>, where an AI algorithm scans to see if employees have their helmet, goggles, vest and other safety equipment on properly to determine if they are ready to work. And the best part is – that the employer can see aggregate data on these interactions to determine if more training on handwashing or helmet wearing is needed.</p><p>At Intel, in addition to providing the fundamental base technology to enable these applications, we work with a lot of third-party developers to create these applications. And we help the developers scale them across multiple industries with our salesforce. So, we may not make the scan technology that determines if you have the right gear on, but we orchestrate that coordination across our ecosystem with all of our partners to effectively put it into a <a href="https://marketplace.intel.com/s/?language=en_US" rel="noopener noreferrer" target="_blank">catalog</a> so that if customers are interested in that sort of application, we can provide them with different parties to make that happen.</p><h4>Is there a problem with fragmentation in the market and how can that be solved?</h4><p>It's very fragmented. I gave just two examples of totally different workers coming to work in different industries and I can give you five more that are different again. Although the base technology that Intel creates to enable this type of innovation is very horizontal in nature, the reality is that bringing those to life must be very "vertically-centered" and very "use-case centered" – and must take into account, geography. The two employee use cases I cited look very different if you are talking about employees in North America, India or Germany. So, all in all, this is a holistic ecosystem challenge – and an ecosystem solution.</p><p>At Intel, we're in a unique situation to orchestrate these solutions. </p><p><cite class="pull-quote">People tend to think of Intel as providing the technical footprint that enables edge computing – but we also have the developer reach – and we can use our ecosystem and scale to help our end customers get access to the best solutions.</cite></p><h4>What sort of challenges do customers face when they're attempting to adopt edge computing?</h4><p>There are two common challenges. One is the technical question of 'Who can I work with?' A customer may have a chip focus but actually, it's a more complex question than a chip. We like that complexity, because we can be an adviser to them and <a href="https://marketplace.intel.com/s/partners-by-industry?language=en_US" rel="noopener noreferrer" target="_blank">bring to the table partners</a> that they can work with to solve that complexity leveraging our technical knowledge and ecosystem network. </p><p>The second thing that companies struggle with is the challenge of how to fund getting into this space – even if the business case warrants the investment. The world has changed. Companies don't want to write a big capital check for these types of investments – they want a pay-as-you-go model, like you see with the cloud. We've been working with customers to find a way to make that happen – and I think that is going to be a bigger part of the conversation moving forward.</p><p>You can see it across almost every aspect of technology now. We rent compute more than we buy compute. Evidenced by the success of AWS, companies can rent compute from Amazon instead of building their own data center – and there are many benefits to that approach. In the old world, even for this video conference that we're having today we would have installed capital to do this. Now it's just a service. And I think that edge as a service is right around the corner.</p><h4>Do you have an example of that?</h4><p>A customer in Mexico wanted to deploy outdoor WiFi and add security features into it. So, it was an edge-based computing issue that was part connectivity. But there was actually way more to it than just installing it. We not only helped to solved the technological challenge creatively and coordinated the <a href="https://marketplace.intel.com/s/partners-by-industry?language=en_US" rel="noopener noreferrer" target="_blank">ecosystem of providers</a> to solve this, but we also found a way so that the customer could get into this market with a service-based model without needing to outlay a lot of capital.</p><p>Other semiconductor companies would have a difficult time partnering on both sides of that challenge, but Intel can do it because we have the scale.</p><h4>How do businesses identify which functions they do want to perform at the edge versus in the cloud?</h4><p>It really comes down to a question of what you're trying to do and how you do it at the lowest cost, highest quality and standard in computability.</p><p>If you have an application and it can perform what you need it to do in the cloud, you'll probably run it there. The cloud is a great thing - there's infinite compute and lots of choice in a well-understood developer environment.</p><p>But there are many things you can't or shouldn't do in the cloud for certain reasons. Take the camera example from earlier. Say you have eight high-density cameras, and you want an action on them immediately. You may not be able to afford the latency that comes with going up into the cloud. Or it may be a financial challenge – that its actually more expensive to send that data to the cloud over and over again, and it makes sense to invest in compute at the edge. There are nuances in the decision-making. It really comes down to what you want the application to do, how quickly and how much it should cost.</p><h4>How does Intel help developers to learn, to build and then test their solutions at the edge?</h4><p>To enable what we know to be interesting and challenging use cases at the edge, required us to change our focus on who these developers are and what they care about. We learned that they <em>really</em> don't care about what hardware they're running on. The modern developers are fairly well extracted from the hardware – they just assume the compute is going to be available for them to do their work.</p><p>To make sure we can deliver on that, we typically target developers by specific capability. The most advanced case that we've been studying on the edge recently is focused video and specifically, video inferencing and AI inferencing. We created a tool called <a href="https://software.intel.com/content/www/us/en/develop/tools/openvino-toolkit.html" rel="noopener noreferrer" target="_blank">OpenVINO</a>, which was developed in a way that developers didn't have to care about the hardware it runs on. It's a model optimization technology that enables them to easily scale out to different hardware platforms. That's proven to be an interesting value proposition to these developers.</p><p>Our goal with <a href="https://software.intel.com/content/www/us/en/develop/tools/openvino-toolkit.html" rel="noopener noreferrer" target="_blank">OpenVINO</a> is democratize AI activity and inference at the edge. We want to make it simple -- to put these tools in the hands of non-data scientists and make it work. As a part of that process, we're also creating an environment where they can develop anyplace, anytime, anywhere they want to be. We're so proud of our <a href="https://software.intel.com/content/www/us/en/develop/tools/openvino-toolkit.html" rel="noopener noreferrer" target="_blank">OpenVINO</a> community and are constantly working to grow the community and release new features and capabilities to edge developers.</p><h4>What's the possible next breakthrough that you see for Intel in edge computing and the IoT space?</h4><p>I'm looking forward to the big breakthrough when we show integrated 5G, Virtual Private Network and the edge workloads all in one unit. More to come.</p>
Keep Reading
Show less
Saul Hudson has a deep knowledge of creating brand voice identity, especially in understanding and targeting messages in cutting-edge technologies. He enjoys commissioning, editing, writing, and business development, in helping companies to build passionate audiences and accelerate their growth. Hudson has reported from more than 30 countries, from war zones to boardrooms to presidential palaces. He has led multinational, multi-lingual teams and managed operations for hundreds of journalists. Hudson is a Managing Partner at Angle42, a strategic communications consultancy.
Transforming 2021
Blockchain, QR codes and your phone: the race to build vaccine passports
Digital verification systems could give people the freedom to work and travel. Here's how they could actually happen.
One day, you might not need to carry that physical passport around, either.
Photo: CommonPass
February 23, 2021
Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.
February 23, 2021
There will come a time, hopefully in the near future, when you'll feel comfortable getting on a plane again. You might even stop at the lounge at the airport, head to the regional office when you land and maybe even see a concert that evening. This seemingly distant reality will depend upon vaccine rollouts continuing on schedule, an open-sourced digital verification system and, amazingly, the blockchain.
Several countries around the world have begun to prepare for what comes after vaccinations. Swaths of the population will be vaccinated before others, but that hasn't stopped industries decimated by the pandemic from pioneering ways to get some people back to work and play. One of the most promising efforts is the idea of a "vaccine passport," which would allow individuals to show proof that they've been vaccinated against COVID-19 in a way that could be verified by businesses to allow them to travel, work or relax in public without a great fear of spreading the virus.
<p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
</div>
</div></p><p>But building a system that everyone agrees with — and can access — is no small task. There are several companies working on competing projects to verify vaccinations. But beyond that, there are more than a few hurdles that could prevent vaccine passports from succeeding, from antiquated medical records systems to interoperability issues and privacy concerns. Here's how they could actually succeed. </p><h3>Competing projects, similar standards</h3><p>Pretty much since the first blockchain white paper, people have been looking for perfect examples of where a distributed, immutable ledger could be valuable. There's obviously the push to use it for currencies, and companies have tried to use it for things like tracking <a href="https://www.protocol.com/ibm-blockchain-supply-produce-coffee" target="_self">food production</a> and <a href="https://www.govtech.com/products/Blockchain-Voting-Debate-Heats-Up-After-Historic-Election.html" rel="noopener noreferrer" target="_blank">voting</a>, but there are few use cases that have truly taken off, at least so far. "We've been working on this since 2014; we never thought that health care would be the kind of the use case that we take this mainstream," Jamie Smith, the senior director of business development at Evernym, a company focused on using the blockchain as a basis for verifying identities, told Protocol. </p><p>Smith said Evernym had been discussing its concepts with automakers, retailers, telcos, governments, loyalty companies and banks prior to the pandemic. One of those companies was IAG, the airline group that owns British Airways, which had been interested in the idea of contactless travel based on a single identity credential that follows you from the airport check-in to your gate. With the pandemic, that morphed into thinking about ways to verify that passengers have had negative COVID tests, and eventually, that they've received a vaccine. "From our perspective, it was a really easy lift to see," Smith said. "We're doing contactless travel, and we just added verifiable credentials for test results."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
</div>
</div></p><p>It's a similar genesis for IBM's Digital Health Pass initiative, which leader Eric Piscini said started about two years ago as a way to store people's entire health records in a safe, accessible platform. It also relies on the blockchain for its immutable record of proof, and both Evernym and IBM are part of an open-standards group called the Good Health Pass Collaborative, which aims to bring private credentialed vaccine records to business and people around the world. Companies are working on their own implementations of the standards, but Evernym's Smith said the data is meant to be portable from one passport to another. </p><p>Most of the companies working on passports say their systems are private by design, especially given that they're mainly working off the same open standards. In most cases, the health information only ever remains on a user's phone, but where it asks to verify that the user's information meets a system's standards — such as whether this person has had two COVID vaccines and should be allowed into an office — that information is recorded on a blockchain. "You can, using blockchain technologies, verify that someone has been tested recently, without having access to the underlying data," Piscini said. "I don't know any other technology where you can do that."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
</div>
</div></p><p>Similarly, the nonprofit Commons Project's CommonPass, backed by the likes of Oracle, Microsoft and Salesforce, started out as a project to bring an analog to Apple Health for Android. JP Pollak, a senior researcher at Cornell and founder of the Commons Project, first launched CommonHealth to bring the sort of data and insights that Apple Health offers to iPhone owners to Android users. Last summer, the group started building an app that could take health data and privately share it with others — in that case, it was to help truckers stuck at the borders in <a href="https://www.newtimes.co.rw/opinions/digital-technology-re-opening-africa" rel="noopener noreferrer" target="_blank">East African countries</a> who couldn't easily prove they'd taken COVID tests. This morphed into vaccine credentialing, with the group now working to pull together the various data streams needed to get a project like this off the ground. </p><p>"Health care institutions, EMR vendors, retail pharmacies, state vaccine registries, all issuing people a digital verifiable credential of their vaccination record that they could then use in the app of their choice, to be able to get access to various kinds of services," Pollak said. CommonPass is also working with the Mayo Clinic, as well as Epic Systems and Cerner, two of the largest EMR vendors. </p><h3>Something for everyone </h3><p>With so many competing efforts to become the world's digital vaccine passport, it might seem that the country is heading for some sort of VHS versus Betamax format war for proving everyone has had COVID vaccines. But given that so many of the efforts are using the same standards, and in many cases, looking to embed their tech in someone else's app rather than their own, the race might be less about the best tech winning, and more about various approaches working in different situations. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
</div>
</div></p><p>"The intent is not to be the only company; we don't want to be the proprietary platform that everybody has to use because they have no choice," IBM's Piscini said. "That's not who we are right now: That's the IBM from 30 years ago, not the IBM of today."</p><p>For IBM, though, the selling point is that the company already works with so many other massive companies. Why look elsewhere for a vaccine passport solution if your airline booking system is already powered by IBM? "We believe our network is going to be more valuable than any other because of our scale and our ability to integrate the platform with CRM systems, building systems or stadium systems — we can do that every day," Piscini said.</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNTY2NTc3NS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYyMTM1MjYyM30._ykxxCyx3_wDbZrYgCcmK0QT2Ue1tZFdP5pf60kOmPU/img.jpg?width=980" id="c81c9" class="rm-shortcode" data-rm-shortcode-id="3967636652192acfdaad341861263bc8" data-rm-shortcode-name="rebelmouse-image">
<small class="image-media media-caption" placeholder="Add Photo Caption...">IATA's digital passport app.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Photo: IATA</small></p><p>For other companies, it's about securing new partnerships with major players in the hopes of finding that scale. Evernym, for example, is working with International Air Transport Association, the airline industry's trade association, on an air travel-specific app called Travel Pass. IATA is working with airlines and local governments to ensure it has the latest requirements to feed the app's rules engine. "It will say, 'Hey, you're flying JFK to Heathrow, you need a PCR test 48 hours in advance before you can land,'" Evernym's Smith said. "And of course, those policy changes are changing every day." Qatar, Emirates and Etihad Airways are all <a href="https://simpleflying.com/qatar-iata-travel-pass-launch/" rel="noopener noreferrer" target="_blank">expected</a> to start trialing the app in the next few weeks.<br></p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="5">
</div>
</div></p><p>In other instances, the technology will live inside other companies' existing apps; why make someone download yet another app and add another hurdle to compliance? Instead, the experience will be rather like adding a loyalty account or TSA PreCheck number when booking a flight. Airlines and other venues restricting access will require uploading negative test results or vaccine records using one of these services. "You're going to be using the United or the Delta app, and they'll be using our solution or somebody else's, but you will do it via their app," IATA's Travel Pass lead, Alan Murray Hayden, told Protocol.</p><p>The World Health Organization is also working on its own offering, and recently convened the <a href="https://www.who.int/groups/smart-vaccination-certificate-working-group" rel="noopener noreferrer" target="_blank">Smart Vaccination Certificate Working Group</a>. It's built upon the WHO's nearly century-old notion of the "yellow card" vaccination record, which first was used to document that travelers had been inoculated against diseases such as cholera and yellow fever. Evernym Chief Trust Officer Drummond Reed is part of the working group; he said there should be more to share in the coming months. </p><h3>What could go wrong?</h3><p>It's entirely possible that as more people start to get vaccinated, vaccine passports start to become the norm. You walk to work — still masked, of course — scan a QR code reader in the lobby, and are let in. You go out for lunch, and your loyalty card app has a discount for in-store shoppers verifying they're vaccinated. Your concert ticket is also tied to health pass information that you shared earlier in the day with Ticketmaster. But there are more than a few hurdles ahead of the companies rushing to turn these concepts into realities. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="6">
</div>
</div></p><p>First off, there's the … reality … of the real world that any digital system has to contend with. For anyone without access to the internet, digital vaccine credentials will prove difficult to acquire, though all the companies Protocol spoke with said they would offer a paper-based QR code for people who don't have smartphones. But there's also the issue of having to corral so many different stakeholders into one system, especially when some health care providers are still reliant on antiquated database systems or <a href="https://www.protocol.com/manuals/health-care-revolution/electronic-health-records-after-coronavirus" target="_self">even paper records</a>. "The amount of inefficiency in the system is tremendous," IBM's Piscini said. </p><p>But in the U.S. at least, all vaccinators are required to report COVID-19 vaccines to their state. Piscini said that even for people who just received a paper copy of their vaccine records, systems like IBM's can likely link up to the state's immunization registry and allow people to import records to a vaccine passport.</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNTY2NTc4My9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYzNzg3MTM2M30.RZtqR7F_FuXK1S24V6jVaqUZ0xOSG-gCwj00xU3fxcM/img.png?width=980" id="b0bd3" class="rm-shortcode" data-rm-shortcode-id="11d8002d92c0cd6ef39b12fc7b8dccf8" data-rm-shortcode-name="rebelmouse-image">
<small class="image-media media-caption" placeholder="Add Photo Caption...">How CommonPass's app shows your records. </small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Image: CommonPass</small></p><p>And states are willing to help out, Pollak said, adding that CommonPass has started working with Hawaii to roll out its offering for would-be tourists. "We're seeing a lot of state governments stepping up and doing a really good job with this," Pollak said. "It would be surprising if there wasn't a coordinated federal effort very soon." That being said, while <a href="https://www.cbc.ca/news/canada/north/iceland-covid-passports-canada-1.5904828" rel="noopener noreferrer" target="_blank">many countries around</a> the world are committing to working on vaccine passports, getting a straight answer out of the U.S. government on what it's doing has proven difficult. The State Department, which maintains America's traditional, analogue passports, referred me to Homeland Security, which referred me to the White House. The acting director and chief of staff of the White House's Office of Science and Technology Policy, Kei Koizumi, told Protocol that "OSTP can't discuss projects we are working on before they are publicly announced."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="7">
</div>
</div></p><p>But even with systems in place at a federal level, there's still a fair amount of education that needs to happen before people will trust systems like these. "There's a substantial gap in understanding and knowledge of how these systems work, and people's views, in terms of who should get access to which data," Pollak said. </p><p>"We assume there's a Facebook Borg in the sky, monitoring every interaction," Smith said. "The emergence of verifiable credentials breaks down that mental model, where actually it becomes more like decentralized bits of paper that I can carry around, and no one's to know that I've been sharing this information."</p><p>"Our belief is that if you do the right thing, from a platform point of view, protecting your privacy, and giving you control and access to the platform to everybody who wants to use it," Piscini said. "I think those are very basic things that allow the core of the platform that we build to generate adoption by the individuals."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="8">
</div>
</div></p><p>Even with a system that works, there may still be holdouts to this potential new normal. "Some people are saying, 'I will never get vaccinated,'" Piscini said, "and I don't know if the airlines are going to say, 'Well, maybe you will never fly again.'"</p>
Keep Reading
Show less
Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.
Latest Stories
See more
Most Popular
Bulletins
February 26, 2021 16:23 EST
February 26, 2021 13:45 EST
February 25, 2021 17:33 EST
Get Source Code in your inbox
David Pierce's daily analysis of the tech news that matters.