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Blockchain. It’s vast, it’s complicated, and it’s having a moment right now.

At its most basic, blockchain is a global distributed database capable of running on millions of devices. As the Harvard Business Review recently wrote, blockchain is “open to anyone, where not just information but anything of value – money, titles, deeds… intellectual property, and even votes – can be moved and stored securely and privately.” Accordingly, there has been wave after wave of articles singing the praises of this nascent technology and how it will change the landscape of just about everything that emits a digital pulse, including transit and urban mobility applications.

With a vested interest in the future of mobile technology, we enrolled the help of moovel’s Research and Development leadership team in order to have a frank and open discussion as to the realistic applications of blockchain in the mobility arena.

Blockchain, What is it good for?

Though the potential for blockchain is vast, we thought it best to winnow out those applications that show real promise. That being said, it seems as though blockchain has a few possibilities when it comes to improving urban transit and its attendant physical and digital manifestations. Those possibilities being: mobility-related transactions and data collection and sharing — bringing siloed data under a single roof (say GPS records from a public bus as traffic ebbs and flows through high-volume corridors). This is due to blockchain’s unique ability to record transactions while establishing secure, nonproprietary identities without the reliance on a centralized intermediary.

As to how this security is ensured? Data in the blockchain is secured via cryptography; members of the distributed network are responsible for verifying that data added to the blockchain is real; this is accomplished using a system of three keys (private, public, and the receiver’s key), allowing members to check the veracity of the data while also confirming the source.

In other words, blockchain is complicated. And that’s just the reason why it’s difficult to infiltrate and corrupt.

Mobility-Related Transactions

With blockchains already serving as the backbone for digital currencies, a natural extension is using the technology for transit transactions. As it stands, multi-modal transportation requires commuters to pay for different tickets in different places. Take for example the individual who travels on suburban rail (one ticket) to the city, rides the subway downtown (a second ticket), then rents a bike for two hours. The integration of blockchain technology could both solve, simplify, and potentially eliminate the requirement of multiple purchases and consequent pain points for the user.

As Matthew ‘Skip’ Rotter, moovel’s Vice President of Research & Development  mused, “There’s a potential that you could devise a transit coin or token that an individual would use to pay fares on public transportation or any kind of mobility service provider. It would become a stored value, capable of being used across many different modes of transportation.”

To that end, DOVU, a Jaguar-backed blockchain startup, has developed a secure marketplace that will let users offset mobility costs in exchange for their transport data. It’s powered by Ethereum, an open-source, public, blockchain-based distributed platform and operating system featuring smart contract functionality.

Data Collection and Sharing

One particularly intriguing aspect of blockchain is its versatility when it comes to collecting data. This unique capacity allows it to handle any type of data that can be digitized. As such, blockchain provides a point-to-point consent solution to establish trust between a consenting party and a receiving party, while enabling smart contracts to adhere to regulatory statutes governing when and how consent should be applied. Additionally, the technology itself enforces data integrity and provenance while distributing the most recent state of data among all interested parties.

Yet, with so many parties in play (the numerous arms of the public and private mobility sectors), an incentive to incorporate blockchain as a shared primary or supplementary data management resource is necessary.

That’s where enforcement of data integrity and the anonymous, nonproprietary nature of the collected data might come into play. Says Rotter, “If a hundred different service providers or agencies or integrated smart technology systems [street signal, sensors, the Internet of Things] started putting their data on a shared blockchain, it would behoove you or your agency to join, because you now have access to all the data on the chain. It makes it so that you can share data rather easily. If you’re willing to give your data, the incentive is self-fulfilling, as you receive access to all the data on the chain because it’s a public, viewable dataset.

Rotter continues, “Additionally, it’s likely to be more plausible when it comes to regulatory side of things … Instead of governments saying, ‘You have to give your data to the us,’ there’s already this shared domain, open to all participating parties.”

Further, this represents a possible middle ground where public sector agencies and private sector companies could meet. With privately held companies like Lyft and Uber (as well as autonomous vehicle technology companies like Waymo) loathe to share the data they’ve collected, participating in a blockchain would allow both parties to share information without compromising their users’ private information.
As moovel Principal Technologist Zach Babb says, “It’s appealing for governments because [technically] there are no upfront costs. A motivated group of people can decide to start a blockchain with the intent of increasing the sharing of data and increasing awareness of a mobility marketplace. This alone has value.”

Mindy Montgomery, moovel’s product manager, feels that regulation around ICOs (initial coin offerings) will further legitimize blockchain. “ICOs are filling a gap in the market for companies and organizations that need to raise money. And, you could potentially see NGOs and nonprofits starting to use blockchain to do good works.” As an example of the latter, Montgomery mentions one Portland, OR based NGO who may be using blockchain to register and track the identity of refugees.

Limitations

Currently, blockchain transactions and validations are notoriously sluggish, sometimes taking hours to complete; a mass transit system would need instant validation of transactions. It would also require offline functionality, something no blockchain is capable of at present.

Another potential issue is how currency values fluctuate within the chain. Given the volatility in cryptocurrency markets, guaranteeing that a trip on the bus will be the same price day after day is dubious. Says Babb, “If we want to serve in the community, we need those who are transit-dependent people to be able to ride without it changing their lives one way or the other. A constantly changing transit fare does not equate to good service, no matter who steps on board.”

Additionally, a main appeal of blockchain technology represents a potential drawback: its immutability. Once a transaction is agreed and shared across the distributed network it becomes close to impossible to undo or modify, and more and more difficult to reverse over time.  A blockchain with a weakness written into the code makes it more accessible to hackers (as is the case with the blockchain serving Bitcoin). Therefore, a flexible blockchain like the Ethereum is a necessity in order to fix potential flaws.

Lastly, and perhaps most importantly, a blockchain-based transit application would need to be universally accessible, a challenge given the vast array of socioeconomic backgrounds among transit riders. Today, it takes significant technical savvy to implement locally, understand and operate. Even the requirement of a smartphone may be prohibitively expensive, so potentially discriminatory.

To sum up, while blockchain registers high on potential with regard to the urban mobility arena, it currently ranks low on functional utilization. This is not to say that agencies ought to abandon the implementation of blockchain. Rather, it is to say that its time — its actual time — is yet to come.

With special thanks to Zach Babb, Mindy Montgomery and Skip Rotter
— Quotes lightly edited for clarity

Please note that this article expresses the opinions of the author and does not reflect the views of Move Forward.