Blockchain Technology & Transportation
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1 Blockchain Technology & Transportation Mid America Association of State Transportation Officials August 2018
2 WHAT IS BLOCKCHAIN? Essence of blockchain technology A blockchain is a record, or ledger, of digital events It s distributed between many different parties It is only updated by consensus of the participants in the system Once recorded, information can never be changed The blockchain contains a certain and verifiable record of every single transaction ever recorded Current System Blockchain System Central authorities transfers actual value between two parties Multiple intermediaries and record-keeping are required to create trust Distributed network of computers (nodes) that maintains a shared source of information Transaction data is immutable Trust is enabled by cryptographic algorithm Federal Blockchain Lab 2
3 FUNDAMENTALS Blockchain s unique value proposition can be best captured in solutions where multiple independent parties need to interact with, update, or reference common set of data Typical characteristics of blockchain usecases: Shared Data Structured repository of information for multiple independent parties Multiple Writers More than one entity generating transactions that modify the database Blockchain network structures: Public Blockchain Fully decentralized Secured by economic incentives Possibility of collusive actors Slow confirmation of transactions Limited privacy protection Immutable Un-editable records provide strong auditability Need for Trust Level of mistrust between the entities writing to the database (e.g., one user will not accept the truth as reported by another user) The level of trust or mistrust helps determine the network structure Permissioned Blockchain Quasi-decentralized Consensus process preselected by nodes Low chance of collusion Near-real-time confirmation of transactions Greater degree of privacy Transaction Interaction Interaction or dependency between the transactions created by different entities Opportunity for Disintermediation Lack of trusted intermediary or central gatekeeper to verify transactions Private Blockchain Centralized Consensus process controlled by single entity Real-time confirmation of transactions Highest degree of privacy LOWER TRUST IN SYSTEM OPERATORS HIGHER TRUST IN SYSTEM OPERATORS 3 Copyright 2017 Deloitte Development LLC. All rights reserved.
4 WHAT CAN BLOCKCHAIN DO FOR YOU? A blockchain solution can be initiated as a store or transaction record, serve as a transaction platform and automate business processes wjh2 A blockchain solution can offer automated, high fidelity and low-cost mechanisms for record keeping Requires user-specific encryption keys records are kept in the ledger but only accessible by authorized users A blockchain solution enables secure, near real-time, low-cost transfer of value without an intermediary Records and value can be transferred to other parties Allows transfer of value between two parties, removing the need for a trusted intermediary A blockchain solution transforms how contracts are executed Protocol is programmable to trigger transfer of value and information under certain conditions Smart contracts can be developed, exchanged, and automatically executed on decentralized systems 4 Copyright 2017 Deloitte Development LLC. All rights reserved.
5 Slide 4 wjh2 Let's put readiness framework here Wendy Henry, 8/1/2018
6 BLOCKCHAIN IN LOGISTICS Distributed ledger technology has begun to be applied in many distinct areas Structure Adaptability ShipChain is currently piloting their freight tracking platform with Perdue Farms, which can provide them with improved visibility into their supply chain and improve communication with carriers. Source: ShipChain white paper, 2018 wjh1 MOVA The Movement Ecosystem. MOVA leverages the Ethereum blockchain to link producers and shipping providers with automated Smart Contracts, track goods in real-time with MOVA GPS, and exact instant payments with built in performance based incentive mechanisms. Source: MOVA: The White Paper, 2018 Blockchain applications in transportation and freight have begun Slync uses blockchain technology to allow for seamless tracking of goods, documents and payments along with providing shippers with better insight into regulatory compliance and quality control Source: Slync Joins BiTA to Help Drive Blockchain Implementation in the Freight Industry, Freightwaves, 2018 Oaken Innovations created a tolling prototype that eliminates payment processing fees between toll roads and service users Source: Project Oaken Puts a Tesla on the Blockchain, ETHNews, 2018 BiTA was formed by experienced tech and transportation executives to create a forum for the development of blockchain standards and education for the freight industry. Source: BiTA 2018
7 Slide 5 wjh1 Look at last years presentations and see if we can find some good examples in the marketplace Wendy Henry, 8/1/2018
8 LOOKING FORWARD Where can blockchain technology take us in the future of transportation? Public transportation payments such as tolls could be securely processed via a distributed ledger technology; integrated across all public transportation systems Blockchain technology provide transparency and efficiencies across the logistics industry Transportation Logistics / Supply Chains Contactless Payment Autonomous Vehicles Usage Based Insurance Characteristics like route optimization and speed limit controls in self driving vehicles could be empowered by blockchain technology Using blockchain as a foundation, insurance companies can create targeted offerings based on usershared driving data
9 About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ( DTTL ), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as Deloitte Global ) does not provide services to clients. Please see for a detailed description of DTTL and its member firms. Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting. This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication. Copyright 2018 Deloitte Development LLC. All rights reserved. Copyright 2018 Deloitte Development LLC. All rights reserved. The blockchain door is open: Moving beyond the basics in government 7
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