What role has blockchain played in the "fight against the epidemic"? In the post-pandemic era, what progress has been made in the application of blockchain?

Source: Capital Laboratory

Author: Ran Wei

Original Title: "Blockchain in Pandemic Response: An Important Practice of Applying New Technology to Social Governance"

The COVID-19 pandemic is a significant global crisis that human society has experienced since entering the 21st century, and its impact on the current and future global situation can no longer simply be described as a "black swan event."

Currently, the pandemic continues to ravage the world, with confirmed cases and deaths in multiple countries reaching new highs. At the same time, global social and economic development has been severely impacted, with the supply chain, international trade, economic exchanges, and geopolitical landscape altered quietly by the pandemic, leading to long-term and significant effects across various fields.

In the fight against the invisible "enemy" of the coronavirus, emerging technologies represented by blockchain have played an indispensable role.

Overall, on one hand, pandemic response applications represent an important practice of applying new technologies to address major public health crises and upgrading broader social governance systems; on the other hand, these applications provide valuable experience for the continued development of blockchain technology in the "post-pandemic" era and will accelerate its implementation across various fields.

1. A New Bill Triggered by the Medical Supply Chain Crisis

On February 22, 2020, the number of confirmed COVID-19 cases in the United States was only 34. Two months later, on April 22, this number surged to 845,000 at an astonishing rate. During this period, as the pandemic escalated, the lack of medical protective supplies in the country and the inefficiency in their allocation and mobilization were heavily criticized.

Against this backdrop, U.S. Congressman Stephen F. Lynch submitted a bill, HR 6607: "Strategic National Stockpile Enhancement and Transparency Act," to the House of Representatives in late April. This bill aims to establish a network supported by a national private blockchain to track key medical supplies and other materials in the Strategic National Stockpile (SNS), thereby addressing the aforementioned issues in the long term and responding to potential future risks.

Lynch stated that the proposed bill "was formulated based on the SNS's failure to effectively provide personal protective equipment, ventilators, and other essential equipment during the current coronavirus pandemic." To this end, the bill proposes establishing a private blockchain-based network to monitor the availability of supplies in the SNS and each state, ensuring that both have sufficient inventory. Additionally, HR 6607 will provide funding to create state-level storage facilities and establish blockchain nodes for tracking purposes based on each state. Furthermore, the bill urges the U.S. Department of Health and Human Services to establish a national emergency biological defense network.

This new bill proposal triggered by the medical supply chain crisis indicates that the pandemic has sparked the U.S. attention and emphasis on the unique capabilities of blockchain technology in strengthening the management of strategic reserves of medical supplies.

Moreover, according to data included in the Capital Laboratory's "2021 Global Blockchain Application Market Report," the U.S. has shown high activity in broader blockchain "pandemic response" applications, such as epidemic tracking and venue control. However, in terms of actual effectiveness, a significant portion of these applications has not delivered the expected value in preventing the spread of the pandemic.

The reasons for this are twofold: on one hand, epidemic prevention and control is a complex system engineering task that requires high coordination among various forces, and relying solely on a single technology can only lead to "a lone hand clapping"; on the other hand, this phenomenon reflects the unnecessary consumption caused by the contradictions between technology and systems, and between technology and culture when responding to major public health events.

Before U.S. Congressman Lynch proposed HR 6607, blockchain applications related to pandemic response had already surged globally. By the end of 2020, extending into 2021, this new wave of technological applications continued and exhibited several notable trends.

2. "Pandemic Response" Blockchain Covers a Wide Range of Application Scenarios

In 2020, various forces including government departments, medical institutions, public welfare organizations, financial institutions, tech giants, and startups quickly responded, with public health systems, fiscal/tax systems, financial systems, and tech systems closely collaborating to combat the pandemic using blockchain technology, resulting in a rich array of application scenarios.

Blockchain-based pandemic response applications cover eight sub-scenarios: epidemic tracking, financial support, remote work, public welfare tracking, resumption of work and production, medical supply chain, venue control, and comprehensive prevention and control.

Among these, epidemic tracking applications account for the highest proportion at 29%; followed by remote work and financial support applications, which account for 17% and 13%, respectively. The sub-application areas in each scenario are as follows:

1. Epidemic Tracking Applications: Blockchain-based epidemic tracking applications mainly cover residents' health status and travel tracking, epidemiological research on COVID-19, verification and validation of COVID-19 test results, monitoring of patient hospitalization data, cold chain food tracking and tracing, as well as public sentiment monitoring related to the pandemic.

2. Remote Work Applications: The implementation of quarantine policies under the pandemic has made remote work a new norm, and blockchain technology has provided new momentum for this norm. Blockchain-based remote work applications mainly involve remote medical services, online contracting, "cloud" customs clearance, online notarization, and remote voting.

3. Financial Support Applications: Financial support applications encompass two sub-application scenarios: financing services and insurance services.

4. Resumption of Work and Production Applications: This application scenario covers management of resumption of work and production based on epidemic tracking, blockchain-based consumption stimulus measures, food safety tracing management under the pandemic, and the reconstruction and improvement of global supply chains in the "post-pandemic" era.

5. Public Welfare Tracking Applications: Globally, public welfare tracking is one of the important scenarios where blockchain technology was applied early on. During the fight against the pandemic, this scenario also generated a wealth of application cases, mainly involving the notarization, verification, tracing, management, distribution, and auditing of public welfare donations.

6. Medical Supply Chain Applications: During the pandemic, blockchain was used for tracking and tracing medical protective supplies, medications, and other medical materials to ensure the smooth operation of the medical supply chain in emergencies.

7. Venue Control Applications: Blockchain-based venue control applications include epidemic prevention measures for specific locations such as schools, hotels, buildings, and communities.

8. Comprehensive Prevention and Control Applications: This type of application mainly covers comprehensive management systems for epidemic prevention and control launched by government departments, standards related to epidemic prevention and control, and emergency management measures for public health events.

3. Alongside Other New Technologies, Blockchain Plays an Important Role in Pandemic Response

Drones flying in the sky assist in reminding and managing "social distancing" during epidemic prevention; robots shuttle through hospital corridors delivering medicine to reduce the risk of infection for medical staff; smart helmets worn by police can display the temperature of nearby crowds for rapid screening; artificial intelligence is used to track epidemic data and develop COVID-19 medications; remote video platforms provide online meeting rooms and classrooms for employees and students; e-commerce and mobile payments meet consumers' shopping needs during quarantine… In 2020, we witnessed the leapfrog development and application of new technologies, new platforms, and new business models under the pandemic, showcasing their powerful capabilities in crisis response. Blockchain has played an important role at this critical moment.

According to statistics from Capital Laboratory, there were 132 blockchain application cases directly related to pandemic response globally in 2020, accounting for 10% of all blockchain applications worldwide. These cases are distributed across 17 countries and regions.

The above data is sufficient to serve as a symbolic annotation for the unique year of 2020 in human history. In such a short period, various forces concentrated and rapidly advanced the application of a new technology in a specific field, which is unprecedented in the history of global technological development. This also indicates that blockchain has been regarded as a reliable technology that can be quickly implemented in the face of major global crises.

4. China: A Unique Model for Global Blockchain Pandemic Response

As the pandemic struck unexpectedly, China's economy suffered a severe blow in the first quarter, with GDP declining by 6.8% compared to the same period last year. As the pandemic gradually came under control, the GDP growth rate reached 3.2% in the second quarter, climbed to 4.9% in the third quarter, and hit 6.5% in the fourth quarter, achieving a V-shaped economic recovery.
For the entire year, China's GDP reached 1,015,986 billion yuan, surpassing the one trillion yuan mark for the first time, with a year-on-year growth of 2.3%, making it the only major economy to achieve positive growth in 2020.
Against the backdrop of the pandemic, China became the "main battlefield" for global blockchain pandemic response applications.
Data shows that among the 132 pandemic response application cases, 95 cases came from China, accounting for 72% of the global total, fully demonstrating China's innovative enthusiasm and strength in using blockchain technology to combat the pandemic.

Looking back at 2020, China was the first to control the pandemic, emerge from the trough, and resume growth, while also resisting the external crisis during the global pandemic. The unique "Chinese experience" has become a high-quality answer that China presents to the world. These experiences are mainly reflected in:

First, government departments at all levels formed a rapid response, scientific decision-making, and high coordination for epidemic prevention and control, providing the most solid guarantee for mobilizing the entire society to use new technologies to combat the pandemic.

Second, from national-level blockchain infrastructure to enterprise-level application platforms, and from comprehensive services to vertical industry services, China has formed a relatively complete blockchain infrastructure, providing a convenient and low-cost development environment for pandemic response applications.

Third, from the State Administration of Foreign Exchange to the General Administration of Customs, and from the State Grid to COSCO Shipping, the "national team" has played an important leading role in blockchain pandemic response applications.

Fourth, from non-profit organizations to financial institutions, and from tech giants to startups, various forces coordinated and acted quickly, forming strong support for pandemic response across various fields.

Fifth, from epidemic monitoring to resumption of work and production, and from public welfare tracking to medical supply chain management, the epidemic prevention and control system was able to cover the entire country comprehensively and quickly, and was effectively implemented.

5. "Pandemic Response" Applications Evolved Rapidly Along with the Progress of the Pandemic

Globally, although the development and application of blockchain are still in the early stages, the pandemic context has led to rapid evolution in pandemic response applications based on blockchain technology.

First, from the perspective of application regions, as the pandemic broke out in more countries and regions worldwide, blockchain was applied in pandemic response actions in more countries and regions.

In the first quarter of 2020, China faced the most severe pandemic situation, with the pressure of pandemic response being most prominent. Against this backdrop, various forces from China quickly followed up and launched various types of pandemic response applications, accounting for 93% of the global total.
As pandemic response efforts progressed, the resumption of work and production was successfully implemented, and daily life further normalized, the proportion of China's pandemic response applications decreased to around 50% in the last three quarters.

In contrast, as the pandemic broke out and intensified on a larger scale globally, the proportion of foreign pandemic response applications rose from 7% in the first quarter to around 50% in the last three quarters. However, throughout the year, the activity level of foreign applications in this field remained significantly lower than that of China.

Second, from the perspective of application scenarios and forms, blockchain technology continuously expanded new application scenarios in response to the changing phases of the pandemic.

Throughout the pandemic, blockchain pandemic response applications demonstrated a high degree of agility.

Shortly after the outbreak, in February 2020, under the backdrop of the "battle against the pandemic," various forces including domestic government departments, financial institutions, tech companies, and public welfare organizations developed blockchain-based applications and quickly deployed them in various aspects of pandemic response, such as epidemic data monitoring, virus testing data notarization, charitable donation management, and prevention material management.

If the blockchain applications launched in February mainly served an emergency response function, by March, as the domestic pandemic was brought under control and work and production resumed, along with the escalation of the global pandemic, pandemic response applications began to extend into more proactive, broader, longer-term, and normalized fields and aspects, such as shipping and vessel pandemic monitoring applications, smart management applications for communities and buildings, rapid customs clearance applications at ports, and trade financing applications.

As domestic pandemic prevention transitioned to the "internal prevention of spread and external prevention of import" phase, the forms of blockchain pandemic response applications underwent further changes.

In the second half of 2020, as positive COVID-19 cases were detected in imported frozen foods or their packaging in multiple regions, provinces and cities quickly launched corresponding blockchain tracing applications, playing an important role in preventing the import of the pandemic.

By the first quarter of 2021, as relevant countries began to gradually promote COVID-19 vaccination efforts, blockchain-based applications for COVID-19 vaccine storage and supply chain tracing, as well as "COVID-19 vaccination certificates," came to the forefront, and mutual recognition and collaboration between countries and regions propelled blockchain pandemic response applications into a new phase.

Overall, in just over a year, from passive to proactive, from short-term to long-term, and from emergency to normalization, blockchain pandemic response applications have rapidly evolved as if they have gained life, becoming a model for the rapid large-scale application of new technologies.