Unlocking the potential of Blockchain in Transport

 Blockchain provides the underlying technology that cryptocurrencies use to track transactions, ensure authenticity and anonymise transaction data.

Blockchain provides the underlying technology that cryptocurrencies use to track transactions, ensure authenticity and anonymise transaction data.

Charles Carter – Senior Technologist at the Transport Systems Catapult looks at the findings of our recent report “Blockchain Disruption in Transport” and discusses the barriers and opportunities in adopting the technology in the transport industry.   

Over the past few years, blockchain technology has gone from being something that only a small number of specialised technologists were working on to something that many people have now heard about – even if they are still unsure about the details, or the practical implications of blockchain.

The Transport Systems Catapult recently published a report (“Blockchain Disruption in Transport: Are you Decentralised Yet?”) in collaboration with the University of Sheffield and 14 other organisations, which set out some of the specific advantages, potential uses and challenges related to blockchain technology’s deployment within the transport sector.

Based on a series of workshops held at the Catapult, and on interviews conducted with leading experts and organisations, the report concluded that blockchain technology could help to increase collaboration, the sharing of trusted information and efficiency, reduce costs and risk, and forge new business models in the transport sphere over the coming years.

While many of the experts we spoke to share in this positive assessment of blockchain’s potential for transport (and a wide range of other sectors), the vast majority of them also reported coming up against frequent scepticism or outright resistance when suggesting that blockchain could provide solutions to some of our current transport challenges.

So why all the scepticism, and what can be done to unblock this seemingly instinctive resistance to blockchain?

Looking first of all at the scepticism, I would suggest that the wider potential benefits of blockchain have often been overlooked due to the technology’s primary association (in many people’s minds) with financial services and, most controversially, with cryptocurrencies – including the most widely known cryptocurrency, Bitcoin.

It is true that Bitcoin would not exist in its current state without blockchain, but it is not true that blockchain is reliant on Bitcoin (or any other cryptocurrency). Put simply, blockchain provides the underlying technology that cryptocurrencies use to track transactions, ensure authenticity and anonymise transaction data.

The technology itself is known as Distributed Ledger Technology (DLT), which is a form of distributed database, and cryptocurrency is only one application of this technology, albeit the most successful so far.

All DLTs work by allowing each ‘node’ or member of a network to store an identical ‘ledger’ or database. This database takes the form of a chronological chain of unique groups of information called ‘blocks’ (which is where blockchain draws it name from). The information contained within each block could be details of events (e.g. changes to a transport model), value transactions (e.g. transport data changing hands), automated actions (smart contracts) or any other information that would benefit from the features of DLT.

Before a new block is added to the chain, members in the network are required to come to a ‘consensus’ or agreement, and then the new block is added to the chain and replicated across all the identical databases.

Returning to that common association of blockchain with cryptocurrency, blockchain (and other forms of DLT) helps to put the ‘crypto’ into cryptocurrencies, but it can also be put to much wider use. And you don’t have to be a fan of Bitcoin to benefit from all that blockchain can offer.

More and more industries are waking up to this, and not just those in the financial sector. Even transport is getting in on the action, particularly in relation to freight and logistics.

One pilot project that began in 2016 has seen the US food giant Walmart collaborating with IBM and Tsinghua University to use blockchain as a means of ensuring supply chain integrity. To give one example of their initial results, they found that tracing the origin of mangoes took just 2.2 seconds with the blockchain method – compared to 18 hours and 26 minutes using more traditional tracing methods.

Last year, another collaborative project (involving SITA Lab, Heathrow Airport, British Airways, Geneva Airport and Miami International) carried out some of the first major research into blockchain’s potential for passenger transport, focusing on the extent to which blockchain could be used to provide a ‘single version of the truth’ for flight status data – combining data from operating airlines, departure and arrival airports, with the aim of improving customer experience and enabling better optimisation of capacity for the airports.

These are still early days for blockchain technology in transport and pilot studies such as those mentioned above have been useful in highlighting the current limitations of the technology as well as its potential benefits.

There are still challenges to be addressed in terms of throughput (the amount of data that can be handled by blockchain in a particular time period), latency (the time it currently takes to update and verify blockchain information) and scale. In their current form, blockchains are not well placed to handle large-scale data and rapid exchanges of information – though individual blockchains could certainly be repurposed in future as the technology develops.

While the technology may not quite be there yet, it is already possible to identify some of the areas where blockchain could have a significant positive impact on the transportation of people and goods.

In our report on blockchain, the Transport Systems Catapult has included the results of an exercise where we mapped the amount of value that blockchain might add against a scale of difficulty to implement (ranging from ‘harder’ to ‘easier’). The results showed supply chain transparency, authentication of infrastructure components and trusted vehicle information as three areas where blockchain could bring notable improvements in the short term.

Smart logistics & ticketing, integrated journeys (across different modes of transport), dynamic insurance and blockchain-enabled authentication of delivery drones are other areas that could benefit in the short-to-mid-term.

Returning to the second of the two questions I raised above (what can be done to unblock current resistance to blockchain), education must certainly play a big part – tackling some of the misconceptions described above and helping people to better understand what blockchain is and, just as importantly, what it isn’t.

But as well as telling people what blockchain can do, I believe you also have to show them what it can do, and to do this we need to encourage a culture of experimentation with meaningful pilot projects, aligned to the advantages of Blockchain, that demonstrate the technology – ideally in a real-world setting.

Our report ends with two main recommendations for action, with the aim of enabling the UK to become a leader in blockchain-based transport solutions:

  • Increase understanding and knowledge sharing of blockchain across the transport sector through establishment of a Community of Interest (CoI), meeting quarterly
  • Stimulate the market through a dedicated Future Mobility Collaborative Research and Development (CRD) programme supported by the UK Government’s Industrial Strategy Challenge Fund. This will enable new service models and technologies such as blockchain to be tested in-market, de-risk development and help prove the value of use cases.

By acting now, we can still ensure that the UK is at the forefront when it comes to the deployment of blockchain to create new and more efficient transport solutions. Even if they remain unaware of the underpinning technology, UK transport consumers would also benefit from the resulting improvements in service. Whether they choose to pay for these better services with conventional cash or with cryptocurrency would of course be up to them!

Blockchain benefits

Some of the main proposed business benefits of using blockchain are: 

  • Increased collaboration – sharing information and processes between businesses and customers;
  • Increased sharing of trusted information – enabling consensus-based validation of information, via a distributed, replicated database, to ensure data integrity;
  • Increased efficiency – removing duplicated effort by maintaining a common ledger which can be used to manage smart contracts and dramatically streamline processes;
  • Reduced costs – removing the need for third-party intermediaries as well as the duplicated effort that is required for maintaining separate databases which contain the same information;
  • Reduced risk – minimising errors and the risk of malicious tampering, with traceable transactions that can show who did what and when to both tangible and intangible assets;
  • New business models – creating new commercial opportunities and revenue streams, as a result of decentralisation and disintermediation (cutting out the middlemen).

Charles Carter will be taking part in a panel debate & round table event – Understanding the Role of Blockchain in Cities in London on the 12th September.

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