Blockchain Trials Accelerate as South America Sees Ethereum Uptake

Ethereum-focused startup ConsenSys is making inroads bringing the blockchain to South America.

AccessTimeIconAug 12, 2016 at 10:07 p.m. UTC
Updated Sep 11, 2021 at 12:26 p.m. UTC
São Paulo, Brazil
São Paulo, Brazil

Argentinian wine and Brazilian timber are just the latest products being transformed by entrepreneurs building distributed applications on the ethereum blockchain in South America.

One of Brazil's largest banks recently built a smart contract designed to automate parts of the process by which a company goes public; a group in Chile is working to help scale the blockchain using the Inter-Planetary File System (IPFS); and a team in Nicaragua is building a secure identity system using Ricardian contracts.

Other than ethereum, what all these projects have in common is a company in Brooklyn, New York, with a rapidly growing presence across industries and around the world.

Of about 100 employees scattered across five continents, three have taken a leadership position to run these diverse projects that push the limits of how a blockchain can be used.

One of those men was hired by ConsenSys in early 2015 after spending more than 10 years building financial markets software in his native Brazil and in New York City. ConsenSys blockchain specialist Daniel Novy tells CoinDesk he's been surprised by how quickly his country has adopted a diverse set of ethereum applications.

Having founded Brazilian bitcoin exchange Basebit in 2013, Novy saw firsthand how in those early days bitcoin's reputation for being associated with illicit transactions made it difficult to sell the technology to banks.

But he added that the stigma doesn't exist with ethereum, which is making his job of approaching companies to "sprinkle a little blockchain on them" much easier.

Novy told CoinDesk:

"It seems all the companies I’m dealing with are searching blockchain. But in the end, they all come to ethereum because of the smart contracts. Many of them, especially the banks have researched bitcoin but they almost always, I think always, choose ethereum."

A São Paulo stock exchange

Based in Belo Horizonte, Brazil, a city surrounded by rainforest just north of Rio de Janeiro, Novy is the lead developer of Regis, ConsenSys' registry service and a consultant with many of the company's projects in both Brazil and Argentina.

Currently, he says he’s working with six financial institutions in the area, including multiple banks. But none is more advanced in its blockchain development than Bovespa, a stock exchange based in São Paulo, Brazil.

During Novy’s most recent meeting with Bovespa, he said he addressed a group of 20 people and helped them build a smart contract prototype that would automate part of the process by which a company goes public.

Beyond just building the prototype for the Bovespa employees Novy described working alongside employees of Microsoft, taking the exchange line-by-line through the code to teach them how to write the IPO smart contract to to deploy it.

The work is still in its earliest phases.

"We started to think about what we should do in the afternoon to prove that this thing works," said Novy.

ConsenSys has confirmed with CoinDesk that they are meeting in Brooklyn with Bovespa in two weeks to discuss the possibility of working together on another project.

A Brazilian rainforest

Whereas Brazil once had a reputation for being slow to embrace bitcoin due to low visibility, Novy says the country is quickly adopting ethereum.

In June, timber tracking company BVRio announced it would use Novy's Regis tool for building decentralized registries to help track the origin of wood harvested from the Amazon rainforest and elsewhere in the region.

Using Regis, which logs identifying information on the ethereum blockchain, BVRio scores each beam of timber based on where it comes from and who harvested it to help ensure its legality.

Prices for the timber are in part determined by this score, according to Novy.

By decentralizing that registry using the Regis software, BVRio said in a statement announcing the project that "the information is guaranteed to not change, given the immutability of blockchains, and it’s available publicly".

Novy says he expects that project will go live by the end of the month.

Argentinian wine

But not all of Novy's work is limited to Brazil. Whereas he says his native country had a post of being late adopters, Argentina, with its history of rapid inflation embraced bitcoin early and has continued to experiment with ethereum.

Still in its stealth mode, Cora in Argentina's Uco Valley is a 2.5-acre vineyard using Regis to sell individual vines to investors.

Cora founder Lucas Abihaggle is working with Novy to integrate land tracking service These Three Words, which has divided the planet into 57 trillion three-meter by three-meter squares with Regis.

"We want to organize a community to buy very valuable vineyards and tokenize the vines for each plant and sell those plants," Abihaggle told CoinDesk. "In that way, [we can] save those vineyards that are in danger of being ripped out for real-estate purposes."

As part of the effort to raise the project's visibility Novy says he'll be pitching it at the DevCon2 Demo Day in Shanghai this September.

According to Abihaggle, angel investors are backing the company but a few final details remain to be worked out before it can launch.

Chile, Nicaragua and beyond

Elsewhere in South America, ConsenSys is working to develop a wide range of applications of ethereum.

Herman Junge in Santiago de Chile is leading a stealth project INFURA to use IPFS to help scale the ethereum infrastructure.

In Nicaragua, lead mobile developer for Uport, Pelle Braendgaard, is using Ricardian style contracts to help ensure self-sovereign identity and key management to help ensure that people and things are what they appear to be.

Braendgaard told CoinDesk:

"I have a strong interest in bring our services to the developing world."

Novy shares Braendgaard's vision for connecting the developing world with the ethereum blockchain. In addition to BenBen, a land registration project currently being discussed with the Ghanaian government, Novy hinted an another African project that "emerged from South America" and could eventually result in a new way to protect rhinoceroses using the ethereum blockchain.

The wide range of projects being undertaken in multiple countries is resulting in a synergy of sorts.

When one of Novy's colleagues initiates a conversation with a bank or business in one country he may benefit from them starting that conversation in Brazil, and vice-versa.

"They are working individually," he said. "But we are always collaborating with each other."

South America image via Shutterstock


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