Reimagining Mobility With Blockchain

Similar to the internet, blockchain technology is sector-agnostic. However, similar to how internet applications differ from healthcare to automotive, blockchain’s innovation principles are expressed differently as well. One of the areas in which blockchain is increasingly being utilised is mobility.

Blockchain is a toolkit. A solution needs a problem. When solving your mobility challenge, consider this: Is blockchain uniquely qualified to solve this problem?

Thought leaders think blockchain will elevate the mobility game.
Alex Smout from InMotion Ventures commented:

“The rapid changes in the automotive and mobility sectors present many problems which benefit from the unique strengths of blockchain.

We’re seeing growth in trading and sharing of high value assets at the same time as disintermediation of “trusted” middlemen, meaning transparency and trust are critical. Smart, connected vehicles need to balance the need for security and control of data with market desire for connectivity and data access. And now, for the first time, OEMs, service providers and cities are having to collaborate on open standards to provide safe, sustainable services.

These trends, and dozens more, mean the mobility sector is already spawning legitimate investment opportunities with blockchain at their core, even with the current limitations of the technology.”

The Blockchain Toolkit

Smart Contracts

Smart contracts boost trust to an unprecedented level. The agreement only executes when both parties have fulfilled all requirements. Pen and paper contracts tend to be between two or multiple parties, may they be individuals or institutions. Smart contracts however are code, thus they can be person-to-person, person-to-machine and machine-to-person, unlocking new dimensions of value creation.

Crypto-Assets

The ability of coding a set of characteristics to the ‘store of value’ that flows within your business elevates a one-dimensional product or service to an interactive platform, network or ecosystem. By designing crypto-assets for specific use cases you can stimulate desired behaviour, mobilising your community to add value to your business.

Trusted Ledger

Transparent records of transactions stored on an immutable decentralised ledger are intuitively most valuable in low-trust environments. It becomes possible to verify statements, such as the number of cars in a fleet or the trackrecord of the driver.

Which Mobility Challenges Could Blockchain Solve?

Quite a few according to Chris Kirby, founder of Tomorrow’s Journey.

“Today mobility is heavily centralised with overly complex service layers that create waste and often offer a sub optimal product to consumers — blockchain has the potential to unravel this market.

There are three ways where I see blockchain impacting mobility. Firstly, creating a network of non centrally and fractionally owned, shared access vehicles. Secondly, the management of this network through a tokenised marketplace for a trusted community to carry out maintenance and movement tasks. Finally, creating a trust network for consumers to access shared vehicles using a verified digital identity.”

Mobility is evolving from a walled garden into an inter-connected web of relationships. What does this have to do with blockchain? We’ll first explore how useful blockchain is applied to a vehicle in isolation, and then we place it in an increasingly broader context, until we arrive at smart cities.

As Philipp Sandner proposed in this article, our blockchain toolkit can be applied to four core areas: Multi-party process, Single-source of truth, Missing trust and an Open ecosystem.

A Single Vehicle

Use Cases

  • Absolute Information —This could be information the car gathers on itself, such as total mileage, weight or age. Alternatively, this could be information others gather on the car, think vehicle condition, workshop visits and repairs. Everything that contributes to resale value.
  • Insurance — Using absolute information to recalculate risk premiums, and verify claims by resolving the circumstances of an accident.
  • Fractional ownership — Car ownership is in decline, for with modern mobility services there is less need to own a car. As mobility services advance, and car ownership decreases, the question is: who will own the cars providing the mobility services?
  • Payments — If we consider a vehicle in insolation, who could it possibly pay? Itself.

Is Blockchain Worth It?

Simply put, a blockchain ledger is a log of transactions. The first question rings: Do you need a shared, consistent database? The absolute information and insurance use cases would benefit from a single source of information. But, this would also be possible with a regular database.

Our next requirement asks records to not be amended or deleted. This reinforces the trustworthiness of the data source, and thus makes a blockchain-based solution a little more interesting.

Does more than 1 writer need to update the data? Yes, these use cases would benefit from multi-party collaboration. We’re slowly getting somewhere.

Now, are all writers trusted? About as far as you can throw them. The mobility sector is infamous for its lack of trust. Let’s consider a semi-decentralised consensus mechanism to validate the input on the ledger, such as Proof-of-Authority. Backed up by ‘real-world’ legal contracts, trusted parties, or nodes, obtain ledger writing permission when a set level of agreement is reached between these parties. Like a representative democracy, but with self-elected representatives and without the people.

That’s just the ledger. Back to our insurance use case. Insurance can become smart with smart contracts. Clauses can be activated by certain triggers, i.e. unsafe route or an un-authenticated driver.

Smart contracts have more applications. Confusingly, ‘the self-owning car’ is a car owned by multiple shareholders (institutions and individuals alike!). It’s called the self-owning car because it can ‘think’ for itself. It can do it’s own transactions and billing via smart contracts. The balance of the costs and revenues is then distributed among the shareholders, verified by the ledger.

The vehicle could also pay its own account to unlock temporary vehicle functions. Think of software functions such as cruise control or hardware functions such as EV battery acceleration boost. Tesla famously extended the range of some Florida vehicles for drivers to escape Hurricane Irma.

Interestingly, we’ve seen that even when considering a single vehicle in isolation, it pays not to discount blockchain benefits.

Vehicle — Infrastructure

Use Cases

  • Absolute Information — This could be information the car gathers on infrastructure, such as charging efficiencies, road conditions, weather or air quality.
  • Payments— The very first interaction vehicles won’t need humans for, is payments.

Is Blockchain Worth It?

Whenever one party interacts with another party, may it be a person or machine, the first question is: Who is this party and are they allowed to make the request they’re making? Recognising the trustworthiness of both the requester and the requested is the business of authentication.

The Hummels family undertakes a comfortable Europe road trip in their leased BMW 6. When leasing the car, BMW verified the identity of the parents (buyers) and by extension the temporary owners of the vehicle. When confronted with a toll-route in France, our Hummels family breezes through, not paying much heed. Under the hood, the toll infrastructure requests the identity of the vehicle, reads the BMW 6 authentication seal (4-passenger capacity, medium pollution, low road impact), calculates the toll fee, obtains only the information relevant for fee extraction from Mr. and Mrs. Hummels, and executes the payment. The Hummels BMW 6 crypto-asset account subsequently sees a fee deduction for toll way Paris-Bordeaux. Machine-to-Machine communication thrives on a need-to-know basis.

This is not fiction. The IOTA Foundation is currently working on vehicle payments to EV charging stations — more here.

When considering if it’s worth storing absolute information on the ledger, frequency is our key criteria. Some data, like traffic data, is only useful when tracked real-time. For this data type local councils are better off using a traditional database.

If we consider a use case such as grid distribution, we find a multi-party collaboration in a low-trust environment requirement. Furthermore, crypto-assets could be used as a tool to create an open ecosystem, further reducing customer adoption barriers.

Benjamin Sinram and Nicolai Bartkowiak, from Volkswagen Group IT, state:

“There is a lot of potential for blockchain applications in the Volkswagen Group, from maintenance, logistics and digital applications to specialised solutions such as tamper-proof odometer readings. Blockchain technology also offers a lot of opportunities when it comes to self-driving vehicles. It can protect cars from hackers better than other technologies, and help with automatic payments at fuelling stations or car washes.”

Not using blockchain when you should is as dangerous as using blockchain when you shouldn’t. Is blockchain uniquely qualified to solve the challenge?

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