Trusted identities and convergence
Identity credentials, enabled by blockchain technology, will profoundly impact the digital economy. The size and scope of the marketplace for identity credentials are staggering. According to Stratistics MRC, the Global Identity & Access Management market alone is estimated for $7.94 billion in 2016 and is expected to reach $20.87 billion by 2022 growing at a CAGR of 14.8% during the forecast period 2016 to 2022[i].
Blockchain technology identity credentials redefine the rules for identity access management. Attestations, certifications, and reputations will expand who can participate in globalization.
Border protection management regulatory technology is going to need a new playbook. The gatekeepers of global trade, will start the transformation by rethinking their processes. Identity credentials make this possible.
What if importer/consignee’s identification requirements could be executed without risk of unwanted data leakage, provide perfect information, eliminate the regulatory requests to expand captured data, reduce national security risk, and potentially be unnecessary? Consider the perplexing bond industry for importation, why it exists, and if it can be simplified. Blockchain technology can redefine more than business models; it can be an enabler of regulatory modernization.
Identity credentials include people, organizations, physical things and digital agents. In a decentralized trustless ecosystem, this is a core requirement, as is blockchain interoperability.
In September 2017, jointly, the U.S. and Mexico announced a Unified Cargo Processing pilot at the border[ii]. The pilot requires that participants are pre-qualified in the Free and Secure Trade initiative, which involves a multitude of attestations, reputation validation, and certifications. The controller of these identity credentials are the government entities.
What if the U.S. and Mexico applied a blockchain trusted identity management solution? One with sovereign decentralized identity credentials. Identities would exist for the equipment, driver, trucking company, shipper, and consignee, immutably secured on a decentralized ledger, with permissioned access.
The participating parties can expand, providing increased economic opportunity. Decentralized trusted identity credentials with sovereign ownership open the door to further extension, connected to or independent of the current border protection management operation.
Consider data integration, which has been at the heart of ocean freight blockchain pilots. It requires identity credentials to function in a decentralized ecosystem efficiently. From an ocean bill of lading to a commercial invoice and customs documents, being tagged with a trusted identity matters.
A component of data integration is the on-demand deployment model, expected to see the fastest rate of adoption[iii]. Every IoT device will need its own identity, from a smart pallet, cold transport container, to a product’s RFID tag.
Transportation and logistics are evolving from thinking of itself as a standalone entity to how the various elements of shipping fit into a more significant ecosystem[iv]. Data standardization and harmonization based on a trusted identity redefines data integration. Garbage in garbage out is as immutable as a decentralized ledger. Attestations, credentials, and reputation of the data support a trustless ecosystem. Expensive and time-consuming custom mapping and translation, before raising the level of trust of the data source, not so much.
Convergence of technologies is enhanced by blockchain technology, which enables its underpinnings of trusted digital identities. It is worth repeating: identity credentials include people, organizations, physical things and digital agents. Trusted identity is accelerating the integration of technologies in a decentralized ecosystem.
It can take years for any technology to take hold, especially so when it challenges a company’s business model. Trusted identities will be no different, more so because blockchain technology is not readily understood. A review of how long it took robotics and automation recognition by more than half the surveyed participating, as a potential to disrupt or create a competitive advantage, speaks to this issue.
Each robot or automated process will have a trusted identity in a decentralized ecosystem, because of blockchain technology. Blockchain technology and AI, making use of trusted identities, allows joint parties to collectively agree on a state and execute smart contract agreements; analyzing data securely, running coded accords, and making predictions. Which do you suppose is more challenging to grasp, robotics and automation or blockchain technology convergence with AI?
Sensors and smart devices are connecting supply chains creating a massive web of data as the physical and digital continue to come together. Always on e-commerce supply chains, meeting the demands of a changing customer environment, through transparency and decentralization.
Blockchain technology enables sovereign digital identity to rise and is about to revolutionize e-commerce and supply chain logistics, as multiple technologies converge. First through efficiency-innovation transformative systems and processes. At this stage, existing stakeholder business models are stirred, not shaken. IT implements self-contained packaged blockchain systems, business processes adapt, human resources are reassigned or made redundant, and the business model remains unchanged.
What comes next is blockchain technology-enabled business model disruption. Netflix vs. Blockbuster style, it is going to redefine the e-commerce/supply chain landscape. Self-sovereign blockchain identity is a worthwhile objective, it will come in steps, and is a cornerstone of ecosystems. Today’s business models that do not prepare for tomorrow will be shaken, not stirred, into the history books.
This article continues the blockchain identity journey from my prior article “Blockchain enables digital identity.”
Thanks to Geofrey Rainy and Vishal Nigam from Vanig, and Derek Mckenny for their comments on this article’s earlier draft.
[i] Orbis Research, Identy and Access Management-Global Market Outlook (2016–2022), March 2017, http://www.orbisresearch.com/reports/index/identity-and-access-management-global-market-outlook-2016-2022
[ii] U.S. Customs and Border Protection, CBP Announces Unified Cargo Inspection Pilot Program at The Otay Mesa Cargo Facility, September 2017, https://www.cbp.gov/newsroom/local-media-release/cbp-announces-unified-cargo-inspection-pilot-program-otay-mesa-cargo
[iii] Markets and Markets, Data Integration Market worth 12.24 Billion in USD by 2022, https://www.marketsandmarkets.com/PressReleases/data-integration.asp
[iv] Bloomberg Technology, Blockchain Is About to Revolutionize the Shipping Industry, April 2018, https://www.bloomberg.com/news/articles/2018-04-18/drowning-in-a-sea-of-paper-world-s-biggest-ships-seek-a-way-out?utm_source=FreightWaves+Daily+Newsletter+Subscribers&utm_campaign=a8afe342c5-EMAIL_CAMPAIGN_2018_04_19&utm_medium=email&utm_term=0_6b16748ce6-a8afe342c5-97423859
