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BizDay: Truck Wallet, Daimler, KI Decentralized

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Helge Michael, Commerzbank and Florian Drewes, KI Decentralized present on BizDay at CordaCon 2019.

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BizDay: Truck Wallet, Daimler, KI Decentralized

  1. 1. Truck Wallet Daimler Florian Drewes - KI decentralized Helge Michael – main incubator CordaCon London | 23 - 24 OCT 2019
  2. 2. The Goal Leveraging the business opportunities of our customers by increasing the capabilities of our products The Vision The Truck as economic agent The Concept Truck ID as enabler for various services developed on a truck Wallet platform The Project Building a platform for an Automated Truck Interaction Ledger Architecture (ATILA) Where we started OCT19 The Truck Wallet as core element Authenticates transactions & payments Validates and stores data Enables secure M2M contracts
  3. 3. ATILA consists of four major pillars OCT19 ATILA (Automated Truck Interaction Ledger Architecture) Pay Conduct DLT driven m2m payments via ID based Wallet ID Enable the truck to identify itself to other machines and business partners Daimler Trucks R&D ID concept (via certificates) and communication protocols implemented in CTP unit Anti Fraud Utilize Truck ID functionalities to prevent fraudulent activities ID based fraud prevention concept (via digital signature and m2m communication) developed and ready to be implemented Charge Implement ID and business logic to allow truck to negotiate with other entities and fulfil own needs Business communication logic between Truck and Charging Station established and tested DLT network created, Payments between network participants (utilizing Wallet functionalities) are running ATILAPartnerDeliverable
  4. 4. Truck Wallet OCT19
  5. 5. Machines paying machines on DLT – a pilot conducted with Daimler Trucks OCT19 Background 1 Source: Machina Research, as cited by Bosch SI; Daimler Machine-to-Machine payment pilot, August 2019 • Machine2machine economy rising with expected 14 bn connected devices and revenue volume of 600 bn USD in 20221 • (Autonomous) transactions between machines need a suitable payment method:  Immediate, finality  Condition-based execution  Low cost, no intermediary • Current payments methods do not entirely meet these requirements • Cryptocurrencies often inappropriate for payments, e.g. high volatility Exchange of IDs, fueling vs. payment & built on
  6. 6. Our solution issues e-money fully automated and is directly linked to the customers bank account OCT19 › Corporate A transfers EUR to internal Commerzbank (CBK) Account › CBK monitors fiat money transfers via Banking API › CBK issues eMoney to Corporate A‘s DL balance › Corporate A and B conduct transactions using eMoney, Corporate B holds eMoney after transactions › Corporate B transfers eMoney to CBK DL balance for redemption › CBK redeems eMoney › CBK transfers EUR to Corporate B‘s CBK account › Each transaction is signed and recorded by Commerzbank 1 2 3 4 5 6 7 8 Distributed Ledger Internal Account Distributed Ledger Balance Distributed Ledger Balance Distributed Ledger Balance Commerz - bank Account Commerz - bank Account
  7. 7. OCT19 Commerzbank dashboard for e-money
  8. 8. Due to technical limitations nodes and keys were hosted outside the truck OCT19 Device nodes combined with one multi account full node Current solution Preferred solution
  9. 9. OCT19 What is e-money › Electronic money (e-money) is a digital alternative to cash. It allows users to make cashless payments with money stored on a card or a phone, or over the internet (definition by the ECB) › E-money is programmable fiat money on blockchains › The e-money directive (EMD) sets out the rules for the business practices and supervision of e- money institutions. In our Pilot › Commerzbank issued e-money as cash states on Corda › The cash states have represented claims against Commerzbank A lot of institutions have introduced stablecoins in the past, we are using e-money
  10. 10. Taxonomy of stablecoins - Stablecoins are digital token that have been designed to minimize price volatility against Fiat currencies OCT19 Fiat Backed Crypto Backed Algorithmic Backed Our E-Money solution • Backed by Fiat currencies that are held as collateral in an escrow account • Value is based on the value of the backing currency or asset • Example: Tether, Gemini Dollar • Backed by cryptocurrencies that are held as collateral in smart contract escrow accounts • Often combined with dynamic adjustments on collateral side • Example: DAI (Maker) • Employ a set of rules expressed in software code that attempt to match the supply and demand of the stablecoin • Example: (Basis), Fragments • Represents a legally enforceable right against the issuer and is redeemable at any time • Widely useable for making payments • Example: Monerium ✗ Stability depending on escrow account solution ✗ Compliance risk due to unknown recipients in public blockchains ✗ Taxes: May generate taxable income ✗ Unclear accounting principles ✗ Stability linked to crypto expos. ✗ Market risk: natural target for gaming/shorting ✗ Compliance risk due to unknown recipients in public blockchains ✗ Taxes: May generate taxable income ✗ Technical risk: Assets can get lost due to programming issues ✗ Unclear accounting principles ✗ Stability not yet proven ✗ Market risk: natural target for gaming/shorting ✗ Compliance risk due to unknown recipients ✗ Taxes: May generate taxable income ✗ Technical risk: Assets can get lost due to programming issues ✗ Unclear accounting principles Stability: Default risk against the issuer ✓ Fully compliant with all legal requirements ✓ No special tax treatment ✓ Clear accounting principles DefinitionCharacteristics
  11. 11. Why does it make sense to use DLT technology for IOT payments? OCT19 SEPA › Missing programmable (no „smart contracts“) capabilities › Missing delivery vs. payment mechanism › Media breakdowns in blockchain applications › No international interoperability › Limited granularity when it comes to microtransactions Todays payment system are not suitable for blockchain related use cases… …and cash on ledger could help to overcome several severe problems. CASH ON LEDGER PAYMENTS › Full programmability (smart contracts) › Allows for delivery vs. payment transactions › No media breakdowns in blockchain applications › World wide transactions possible › (Fine granularity allows for micropayments) › Cash on ledger enables instant settlement
  12. 12. Fulfillment of all regulatory requirements and easy accounting within your balance sheet – legally our solution offers e-money OCT19 Commerzbank ensures that all parties within the network fulfil all KYC requirements with respect to AML Commerzbank holds all required licences to issue cash on ledger Solution covers all legal and regulatory requirements - covered by legal opinions from reputable law firms Legally our solution offers e-money that can be easily accounted within your balance sheet Accounting Licences Permissioned Network Compliance
  13. 13. Findings regarding M2M Economy + Corda
  14. 14. Hardware Load Analysis Results OCT19 Δ26 MB (+7.96%) Δ0.5 (+50%) Hardware load requirements for Atila Cordapp: ~26 MB RAM, ~50% of system resources for ~ 1 minute
  15. 15. Transaction Stress test results OCT19 In chosen stress scenario (1 tx/minute), Postgres is stable, reducing transaction size by 96.3% vs. H2 But: Transaction size is still 30-60x higher than e.g. bitcoin transaction size. Suitable scaling for M2M payments to be further optimized within Corda.
  16. 16. CCC – Findings: CORDA(1) OCT19 ● Corda software overall in a solid development state ● Developer-friendly documentation, compared to e.g. Hyperledger fabric ● Generic benefits of permissioned blockchains: ○ transaction finality, control of network load. ● H2 database is suitable only for very small sample applications but not sufficient even for PoC -> essentially for development only, switch to Postgres was an improvement ● Confidential identities are not fully matured ● Corda nodes can still only manage one identity
  17. 17. CCC – Findings: CORDA(2) OCT19 ● Full node size requirements (Memory: 2-4GB) too high - prohibits IoT applications ○ light client „Device Nodes“ needed -> concept of external signing ○ roadmap and size requirements unclear ● Production-readiness for M2M-application not there yet and not "around the corner“ ● Notary system remains unclear to some extent: ○ Scenario: several banks, collaborating on Corda Cash-on-Ledger but competing for customers ensuring a network of notaries ○ More in depth notary structure was unchallenged in the PoC
  18. 18. The E-Money Issuer is available at R3’s marketplace OCT19 More information on : https://marketplace.r3.com/solutions/emoney- issuer?referrer=search
  19. 19. OCT19 Helge Michael Florian Drewes

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