Block chains for powering the future of Connected Cars

There isn’t a single automotive OEM, or a Tier 1 supplier, or a chip set maker or for that matter even a software major around, which hasn’t poured in money for developing technology and solutions for connected car “ecosystems”. The quotes around the word ecosystems is deliberate: while vehicle connectivity has been around for more than a decade, and grand visions of V2X and smart traffic management and other futuristic use cases have been conjured for years, we see very little traction on the ground in terms of public adoption of vehicle connectivity. Beyond basic logistics applications, and fancy mobile apps using car data, vehicle connectivity as a concept is yet to lead us to the supposed end point — that the car (or the mobility brand) ceases to be a product and truly becomes a platform.

There could be many arguments put forth: technology isn’t probably mature yet in terms of safety and security, there are too many players competing for the same piece of action or that government regulations governing vehicle communication standards, around the world, remain muddled or at worst absent. I would argue on the other hand that any new technology paradigm or business model needs only one thing to push forward — the presence of the right set of economic incentives. For a network-centric business model to take off in the first place, it needs the right set of circumstances in place in order to scale. Ease of transacting, the presence of trust in those transactions, and the ability to maintain adequate security are the essential building blocks to rapidly build a network based business model. Trust and security cannot be centralized — this would then be anathema to a network-based business model.

A connected vehicles ecosystem would be unique in the sense that while there will be use cases around commercial transactions (for example, automated service booking & payment), these transactions will be based on an underlying layer of data interchange — both within the OEM-Vehicle network (vehicle to dealership, vehicle to OEM’s CRM etc.), and between the vehicle and external nodes (V2X scenarios). The considerations discussed earlier — ease of transacting, presence of trust and security — apply, along with additional requirements of scalability.

The framework that truly fits the bill for connected vehicles ecosystem transaction interchange would be blockchains. Blockchains employ distributed storage, and consensus mechanism for addition of each transaction block to the chain — this in its nature ensures trust is built into the framework itself. All blockchain protocols commercially available are open source: this implies rules can be programmed to allow rapid, decentralized addition of participants, within clear laid out constraints. By its nature, a transaction chain is immutable, hence no effort need to be expended in verification of transactions; no centralized clearing house is needed for validation. Within the blockchain network, a secure definition of what data goes into the chain, along with custom validation rules can help ensure adequate abstraction of user data — what is deemed as personal, confidential information can be kept out of the blockchain.

So what should be an ideal blockchain framework to support a connected vehicles + things ecosystem? I’ve share some of my thoughts on this below:

1. A permissioned, private blockchain network with rules based access for participation in the network is essential — not just for a connected car ecosystem, but for any enterprise context. The OEM, or the enterprise, or the regulatory body at the center of the ecosystem must own, deploy, operate and maintain the blockchain network
2. The blockchain must be heterogeneous: implying that not all nodes will have the same functions and same permission levels. For added security, each node must have only a specific set of functions (for example, separate nodes for validation, separate nodes to execute smart contracts, specific nodes to add transactions etc.)
3. A restricted approach to smart contracts: either have designated nodes to write these smart contracts, or have a network specific SDK which will limit what code can be run. This is essential, again to maintain transaction security and to prevent DAOs from running on the chain.
4. Multiple private block chains with shared nodes or multiple channels with shared blocks

• Chains classified by function and interacting agents. For example, V2X data can reside in a separate blockchain, while service data can reside in a separate blockchain, with the vehicle being the common node between both the chains
• Custom rules would determine which node writes which transactions into which blockchain
• Hyperledger Fabric v1.0 has the ability to create multiple ‘channels’; the first generation of Multichain has rolled out ‘Streams’; the PolkaDot project based on Ethereum has created a framework where multiple ‘para’ chains can work together

Blockchains are an evolving, and often contentious topic — as is the case with any disruptive idea. I believe this would be a central framework for exchanging value in digital networks like connected car ecosystems. I’ve shared what I believe are essential characteristics for a blockchain network for a connected car world. I would love to hear what you think, including ideas/key aspects that I may have missed.

Re-published my older post in LinkedIn on September 2017