The Blockchain in Smart Cities. Analysis of Blockchain Use Cases for Smart Mobility

Table of Contents

1 Introduction

2 Fundamentals
2.1 Blockchain
2.1.1 Background
2.1.2 Ledger
2.1.3 Transaction
2.1.4 Consensus Models
2.1.5 Weaknesses of Blockchain
2.2 Smart City and Smart Mobility
2.2.1 Background Information
2.2.2 Smart mobility

3 Research Method

4 Result
4.1 Vehicle Data Sharing with Blockchain
4.2 Mobility as a Service
4.2.1 Business logic automation
4.2.2 Data and Transaction Records
4.2.3 Token based incentivization
4.2.4 Transaction automation
4.2.5 Identity Management
4.3 Vanets
4.3.1 Perceptual layer
4.3.2 Edge computing layer
4.3.3 Service layer
4.4 Blockchain in Logistics and Transport

5 Discussion

6 Conclusion

References

Abstract

In this paper we analysed the potential of Blockchain in smart mobility. In my research, we have focused on four areas of smart mobility being Vehicular Data sharing, Mobility as a Service, VANET as well as Transport and logistic. In order to give the reader a basic infor­mation, firstly we gave a definition of Blockchain and Smart mobility, then we moved onto the above mentioned four areas. At first, we explained the goal and the current status of the system, which problems it possesses and how Blockchain can fix these problems. In the end of our thesis we summarized the main findings and point out the weaknesses of Blockchain and why it can be challenging to implement it in this area. Further, there is also a proposed possible solution to current lack of information in order to give a final review to the potential of Blockchain in smart mobility.

Zusammenfassung

In dieser Seminararbeit haben wir das Potential von Blockchain im Bereich der Smart Mobilität analysier. Dabei lag der Fokus auf vier Bereiche von Smart Mobilität, die namentlich wie folgt heissen: Vehicular Data sharing, Mobility as a Service, VANET, Transport and Logistics. Um den Leser einen leichten Zugang zum Thema zu geben, haben wir am Anfang eine Definition für Blockchain und Smart Mobilität erarbeitet. Nach diesem Schritt analysierten wir die gerade erwähnten vier Bereiche, diese werden auf Ihr Ziel und aktuelle Implementierung analysiert und Probleme herausgefiltert. Darüber hinaus erläuterten wir wie diese Probleme mit Blockchain gelöst werden können. Am Ende dieser Arbeit fassten wir die wichtigsten Informationen zusammen, erläuteren die Schwächen von Blockchain und welche Herausforderungen es geben könnte bei der Implementierung. Des Weiteren haben wir einen Vorschlag gemacht, wie aktuelle Wissenslücken gelöst werden können, damit eine finale Antwort auf die Frage welches Potential Blockchain im Smart Mobilitäts Bereich hat zu geben.

1 Introduction

In the past, mobility information had to be collected through surveys and the governments had to guarantee securing the information before making it public. Today, the act of collecting information is happening a bit differently. For example, smartphones can passively collect and analyse information, this can aid the governments in understanding the needs of the consumers and provide better transportation systems (Lopez & Farooq, 2018 - 2018, p. 1). But this tech­nological advancement comes with new responsibilities, the privacy and security of this infor­mation have to be guaranteed and this proves to be a great challenge. Right now, we can see that data breaches happen all over the world in different technological areas (Lopez & Farooq, 2018 - 2018, p. 1). For example, in the year 2017 the personal data of 57 Million Uber cus­tomers were hacked and stolen, Uber wanted to keep this a secret and paid the hackers 100.000 Us Dollars to not only delete the data but close the security breach (Carrie, 2017). One possible solution for this security problem is Blockchain technology.

Due to the rapid population rise in urban areas, problems like unemployment, more air pollu­tion and traffic jam is arising. In order to counteract against these problems more and more smart city concepts arise (Nam & Pardo, 2011, p. 1). With the emergence of smart city another domain in the concept of smart called “smart mobility” is coming alongside it (Semanjski, Mandzuka, & Gautama, 2018 - 2018, p. 1). For example in smart mobility the drivers are connected through their cars in a network, in this network cars can notify other drivers about dangers on the roads, so they can response more efficient against them (Olariu, Eltoweissy, & Younis, 2011, p. 1). But current technologies in the smart mobility area are outdated and this causes security problems, while sharing information between cars (Singh & Kim, 2017, p. 2). One possible solution is Blockchain, this is because of its nature which allows transactions without trust (Yaga, Mell, Roby, & Scarfone, 2018, p. 18) and the information stored in it being temper resistant (Yaga et al., 2018, p. 34). Transactions of information are improved for example in the aspect of security and speed (Beck & Müller-Bloch, 2017, p. 1). This would help in the smart mobility area to notify drivers in a faster and more reliable way of dangers.

However, these are all theoretically possible benefits. Currently there are no real-world use cases and all the above-mentioned points are positive benefits, but no one considers how well Blockchain works for example with the privacy policy. Like every technology, Blockchain will bring possible problems alongside its benefits. Having this in mind, this study will re­search the potential Blockchain has in the area of smart mobility. Therefore, the research ques­tion of this study is, which potential Blockchain possesses in smart mobility. To do that, first, Wewill provide fundamental knowledge on what Blockchain is and how it works moving on to the concept of smart city and smart mobility. After that we will explain our research method, which criteria we used for our paper and explain why we chose the chosen criterias. After explaining the research method, we will provide our main findings in Blockchain usage in smart mobility, analysing how the following models work and what their weaknesses are. From the main findings we will continue to discuss the findings, in regards of their practice relevance, what weaknesses are and what should be the next step in the research of Blockchain and smart mobility. Finally, we will summarize the most important findings in the conclusion and answer our research question of which potential Blockchain possesses in the domain of smart mobility.

2 Fundamentals

2.1 Blockchain

2.1.1 Background

Blockchain was originally introduced as the technology behind the cryptocurrency Bitcoin (Zheng, Xie, Dai, Chen, & Wang, 2017 - 2017, p. 1). This single focus use of Blockchain is called Blockchain 1.0 and only supported cryptocurrency, the second generation allows self- programmable Blockchain. Thus, the possibility to implement your business logic with it is given, which allows a wider spectrum of use cases (Beck & Müller-Bloch, 2017, p. 2). A re­search done by the Tapscott brothers advocates that Blockchain is a technology which will affect different areas of our lives (Tapscott & Tapscott, 2016). The reason for this is that Blockchain has a distributed database, meaning it is decentralized and distributed over the networks (Mas & Chuen, 2015, p. 10) and allows trustless networks (Christidis & Devetsikio- tis, 2016, p. 1). Moreover, Blockchain improves speed, security and the transparency of each transaction (Beck & Müller-Bloch, 2017, p. 1).

2.1.2 Ledger

Transactions are collected in a so-called ledger, which is stored in databases. These ledgers are stored by trusted third parties, which means the ledger is in a centralized database. But it can also be decentralized and distributed over the network, the latter is used by the Blockchain technology approach (Yaga et al., 2018, p. 24). Hence, the ledger is not authorized centrally but by the network community itself. Further, every transaction is in a public record (Mas & Chuen, 2015, p. 5). The decentralized approach has the benefit of being secure. This implies, for instance, that in a centralized database you must trust that the third-party, which is owning the database, does regular backups, so your transactions are not lost. But with the Blockchain approach, you distribute your ledgers all over the network. Thus, multiple backups are made at the same time. (Yaga et al., 2018, p. 25)

2.1.3 Transaction

A transaction is an interaction between two participants of the same network and could include anything (Yaga et al., 2018, p. 20). In 2008, Nakomoto described a transaction in the context of bitcoin as a coin, which can be transferred from one owner to the next (Nakamoto, 2018, p. 2). The transaction information with each Blockchain implementation can differ, but the gen­eral idea of how it works stays the same. In a transaction, the user sends information to the network. This information contains a unique identifier of the user e.g the address, a public key, the digital signature and finally the input and output coming from this transaction. In the case of cryptocurrency, the information sent is a reference to the past, so the value of the crypto­currency cannot be changed (Yaga et al., 2018, p. 20).

2.1.4 Consensus Models

One of the most important features of Blockchain is that it allows transactions without trust, so every participant in a network can validate the authenticity of a block. To do this, the net­work participants must agree on a Consensus model (Yaga et al., 2018, p. 29). How Secure a Blockchain is depends on his Consensus model. Consensus models must possess the following features to deliver a certain amount of security. They must be consistent, meaning every node output must be the same. Further, they must be alive, this is guaranteed when every node produces results. Finally, they must be fault tolerance. This means that they have to be able to recover from node failure (Unibright.io, 2017).

2.1.5 Weaknesses of Blockchain

In order to maintain a real time ledger, which ensures that every new node added to the chain, communicates with the other nodes to make everything transparent, brings high energy con­sumption. This is one of the main weaknesses of blockchain (Golosova & Romanovs, 2018 - 2018, p. 5-6). Blockchain being immutable is a strong point and weakness at the same time for blockchain. Being immutable makes the code unchangeable, this can be a strong point for security, but if a faulty code exists in the Blockchain and is found by hackers, it will be ex­ploited and cannot be changed (Fauvel, 2017). Another weakpoint of Blockchain is called “double spending”. This means that someone is trying to use the same block in multiple trans­actions (Nicolas & Wang, 2019 - 2019, p. 1). In 2008 Satoshi Nakamoto has introduced a “time-stamp” which records the history of a block in the chain, in order to counteract double spending (Nakamoto, 2018, p. 2).

2.2 Smart City and Smart Mobility

2.2.1 Background Information

The fast rise of the urban population comes alongside problems like more air pollution, unem­ployment as well as more vehicles on the street causing traffic jams (Nam & Pardo, 2011, p. 1). To ensure the livability of its citizen despite the rapid growth of the population, govern­ments tend to find smarter solutions to manage these problems. Cities with such solutions are more often called Smart Cities (Chourabi et al., 2012 -2012, p. 1). Smart City is a word with a wide variety of definitions. For example, some define it as a city with focus on a high quality of life with a smart technology (Caragliu, Del Bo, Kourtit, & Nijkamp, 2013, p. 1), while some describe a smart city as a city which is more green (Bowerman, Braverman, Taylor, Todosow, & Wimmersperg, 2000, p. 1). To achieve smart cities, governments must use Infor­mation and Communication Technology (ICT). Smartifying a city ICT means giving it four features:

- The abili ity, every system has to be connected to interact and handle different kinds of situations thus making a completely connected system (Arroub, Zahi, Sabir, & Sadik, 2016 - 2016, p. 1-2).

2.2.2 Smart mobility

With the emergence of smart cities new research fields arise. One of those researches is the domain of smart mobility (Semanjski et al., 2018 - 2018, p. 1). But this research field is still very new and unexplored. Due to that, smart mobility lacks a specific definition (Faria, Brito, Baras, & Silva, 2017 - 2017, p. 2). Some arguments say that smart mobility is to use ICT in order to improve traffic in urban places (Albino, Berardi, & Dangelico, 2015, p. 3), while some say that smart mobility is to use ICT to develop sustainable and safe transport systems (Vanolo, 2014, p. 5). Even though these are two different perspectives on smart mobility, they agree on using ICT to develop the smart mobility system (Faria et al., 2017 - 2017, p. 2). A few cate­gories of smart mobility are as follows: electric cars, driving safety, smart parking, smart in­frastructure. These are only a few listed on the website smartmobilityworld (SmartMobili­tyWorld). The benefits of smart mobility can be explained through these aspects. Electric cars for instance will bring a reduction in the usage of environmentally dangerous resources making the traffic greener. By allowing cars to interact with other participants in the infrastructure around them, the traffic is getting more secure (Faria et al., 2017 - 2017, p. 3). Additionally, a model was introduced by Hernafi et al. In this model the researchers introduce a vehicle alerting system, in which vehicles send messages and alerts of possible dangerous driver be­havior. In this model it is necessary that the vehicles are equipped with sensors to send posi­tion, speed, and acceleration. Moreover, they have to be connected through a VANET network (Hernafi, Ben Ahmed, & Bouhorma, 2016 - 2016, p. 4-5). Another domain of smart mobility was introduced in 2015 by Jagadeesh et al. Their approach was to develop a smart traffic light system. They wanted to improve traffic congestation, which caused time problems like deliv­ery delays, lost trade opportunities or productivity at work for an employee. Usually, the traffic lights are working with a fixed time to switch from red to green traditionally, but in a smart environment a dynamic traffic light could adapt to sudden changes in the traffic (Jagadeesh, Suba, Karthik, & Yokesh, 2015 - 2015, p. 1). From all the above-said researches it can be summarized that smart mobility will ensure that the air pollution and security in traffic will be improved.

3 Research Method

The research topic about the potential of Blockchain in the area of smart mobility, assumes basic knowledge about Blockchain and Smart City. So, in the first part of our research wewill explain in general what Blockchain is with a focus on the following points:

- Background Information
- Ledgers
- Transactions
- Consensus Model
- Weaknesses

Then, we move on to explain what a smart city is. Therefore, wewill focus on:

- Background History
- Smart Mobility

After giving the reader basic knowledge about Blockchain and Smart City, wewill continue with the main part analysing proposed models and use cases with their way of working, exam­ining the strong and weak points. Wewill analyse the following topics in regards of Block­chain and smart mobility:

- Vehicle Data Sharing with Blockchain
- Mobility as a Service Model
- VANETs
- Blockchain in Transport and logistics

The problem of this topic is the huge amount of literature available due to these technologies being so popular, the main challenge will be to distinguish between papers with high and bad quality. To ensure high quality literature, wewill focus on contributions which were published in conferences and Journal article, due to their academic value. We also look on how many times a literature was cited in other works, the more a paper was cited the more general ac­ceptance it has in regards of Blockchain and Smart City. Furthermore, we will look at the authors background, authors with an academic background or great accomplishments in the IT section will be preferred. Before using these criterias, we have roughly found around 60 sources consisting of papers and websites, some of them being small blogs or educational books, after applying our criteria we had around 49 usable sources for this research. Further­more which helped us to find quality sources was to focus on the following three main data­bases:

- IEEE Explore
- Scopus
- Google Scholar

We willalso use websites like Medium regarding the writer's professional knowledge on this topic. The reason why we focused on the named databases was as following:

- IEEE Explore is a renowned and big research organization in the domain of technol­ogy, with the focus on conference contributions.
- Scopus is a meta databases which helped in finding journals compatible with our re­searched topic.
- Google Scholar is a database which allows keywords search, we used key phrases like “Blockchain weaknesses in regards of smart mobility” or “reasons to use Blockhain in smart mobility”.

Finally, we will summarize our research findings and list the main information on the topic to the reader. Afterwards we will discuss the potential of Blockchain usage in the area of smart mobility is and how well the models can be used in real life praxis.

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