blockchain in transportation
opportunities > blockchain > logistics Blockchain in Oil and Gas September 12, 2017 Rajat Rajbhandari, PhD | Texas A&M Transportation Institute
Transportation Policy Research Center
Blockchain
Texas A&M Transportation Institute
2
Transportation Policy Research Center
New kind of trust… … trust created by network of computers instead of a corporation or individual or government…
“… a trust protocol…” - Tapscott
Texas A&M Transportation Institute
3
Transportation Policy Research Center
Value propositions of blockchain Immutability Traceability Settlement Process integrity Global protocol Interoperable Cross border payment
Texas A&M Transportation Institute
4
Transportation Policy Research Center
Impact on oil and gas industry Marco Dunand, CEO of Mercuria, one of world’s largest commodity traders said … “… blockchain could reduce oil industry costs by 30 percent…"
Texas A&M Transportation Institute
5
Transportation Policy Research Center
Benefits to supply chain and logistics Less friction > quicker settlement > more money for replenishment Smart contracts > payment of goods/services > executed by autonomous system Crypto currency > simplified payments > quicker settlement Transparency + immutability > horizontal or p2p collaboration > More secured IoT
Texas A&M Transportation Institute
6
Transportation Policy Research Center
Less friction in supply chain Import Customs
Export Customs
Insurance
Insurance
Haulier Carrier
Importer
Import Terminal
Importer’s Bank
Haulier’s Bank
Correspondent Bank
Texas A&M Transportation Institute
Haulier
Export Terminal
Haulier’s Bank
Exporter
Exporter’s Bank
7
Transportation Policy Research Center
banks
Walmart, Maersk, IBM, Tokio Marine, BlockFreight, Skuchain, Symbiont, Provenance, Everledger, Bristolcone, Homeland Security
haulier
customs
manufacturer importer
insurance
trade finance, settlements, insurance claims, track and trace, provenance
port
carrier
Texas A&M Transportation Institute
8
Transportation Policy Research Center
Mesh network of IoT devices Siemens – 70% of O&G companies have experienced hacks
IoT devices are most vulnerable More secured mesh networks
Texas A&M Transportation Institute
9
Transportation Policy Research Center
Electronic wallet for machines Program custom crypto currency Automatically pay for software updates Automatically pay for machine parts Pay for fuel, charging stations, maintenance services
Texas A&M Transportation Institute
10
Transportation Policy Research Center
Reduce disputes 9% of crude oil transactions are disputed = $ 150 billion Smart contracts are program codes written in Ethereum blockchain Use smart contracts to store contract parameters, amendments etc. Legal in Nevada
Texas A&M Transportation Institute
11
Transportation Policy Research Center
Fractional ownership of assets
Texas A&M Transportation Institute
GM, Toyota, Bristlecone
12
Transportation Policy Research Center
Horizontal collaboration Challenge – trust each other when there is no trust Consortium blockchain as a trust source Immutable record of – Use of distribution centers Mileage of power units and trailers
Texas A&M Transportation Institute
13
Transportation Policy Research Center
Challenges Debate on private vs public blockchain Quantitative model to justify return on investment Needs partners to agree on a protocol > transparency !!! Interoperability between private or consortium blockchains Needs governance and policy guidance Highly regulated industry – investment in compliance Texas A&M Transportation Institute
14
Transportation Policy Research Center
Next steps Wait and see approach will be costly later Create a blockchain alliance for O&G Pool resources to explore blockchain and crypto’s potential
Undertake demonstration and pilot projects Support research Texas A&M Transportation Institute
15
Transportation Policy Research Center
Bitcoin is nothing but a “different” way to store value transfers.
Blockchain is nothing but a “different” way to store transactions, events, entries, logs etc.
Texas A&M Transportation Institute
16
Transportation Policy Research Center
[email protected]
Texas A&M Transportation Institute
17
Transportation Policy Research Center
Blockchain
Texas A&M Transportation Institute
2
Transportation Policy Research Center
New kind of trust… … trust created by network of computers instead of a corporation or individual or government…
“… a trust protocol…” - Tapscott
Texas A&M Transportation Institute
3
Transportation Policy Research Center
Value propositions of blockchain Immutability Traceability Settlement Process integrity Global protocol Interoperable Cross border payment
Texas A&M Transportation Institute
4
Transportation Policy Research Center
Impact on oil and gas industry Marco Dunand, CEO of Mercuria, one of world’s largest commodity traders said … “… blockchain could reduce oil industry costs by 30 percent…"
Texas A&M Transportation Institute
5
Transportation Policy Research Center
Benefits to supply chain and logistics Less friction > quicker settlement > more money for replenishment Smart contracts > payment of goods/services > executed by autonomous system Crypto currency > simplified payments > quicker settlement Transparency + immutability > horizontal or p2p collaboration > More secured IoT
Texas A&M Transportation Institute
6
Transportation Policy Research Center
Less friction in supply chain Import Customs
Export Customs
Insurance
Insurance
Haulier Carrier
Importer
Import Terminal
Importer’s Bank
Haulier’s Bank
Correspondent Bank
Texas A&M Transportation Institute
Haulier
Export Terminal
Haulier’s Bank
Exporter
Exporter’s Bank
7
Transportation Policy Research Center
banks
Walmart, Maersk, IBM, Tokio Marine, BlockFreight, Skuchain, Symbiont, Provenance, Everledger, Bristolcone, Homeland Security
haulier
customs
manufacturer importer
insurance
trade finance, settlements, insurance claims, track and trace, provenance
port
carrier
Texas A&M Transportation Institute
8
Transportation Policy Research Center
Mesh network of IoT devices Siemens – 70% of O&G companies have experienced hacks
IoT devices are most vulnerable More secured mesh networks
Texas A&M Transportation Institute
9
Transportation Policy Research Center
Electronic wallet for machines Program custom crypto currency Automatically pay for software updates Automatically pay for machine parts Pay for fuel, charging stations, maintenance services
Texas A&M Transportation Institute
10
Transportation Policy Research Center
Reduce disputes 9% of crude oil transactions are disputed = $ 150 billion Smart contracts are program codes written in Ethereum blockchain Use smart contracts to store contract parameters, amendments etc. Legal in Nevada
Texas A&M Transportation Institute
11
Transportation Policy Research Center
Fractional ownership of assets
Texas A&M Transportation Institute
GM, Toyota, Bristlecone
12
Transportation Policy Research Center
Horizontal collaboration Challenge – trust each other when there is no trust Consortium blockchain as a trust source Immutable record of – Use of distribution centers Mileage of power units and trailers
Texas A&M Transportation Institute
13
Transportation Policy Research Center
Challenges Debate on private vs public blockchain Quantitative model to justify return on investment Needs partners to agree on a protocol > transparency !!! Interoperability between private or consortium blockchains Needs governance and policy guidance Highly regulated industry – investment in compliance Texas A&M Transportation Institute
14
Transportation Policy Research Center
Next steps Wait and see approach will be costly later Create a blockchain alliance for O&G Pool resources to explore blockchain and crypto’s potential
Undertake demonstration and pilot projects Support research Texas A&M Transportation Institute
15
Transportation Policy Research Center
Bitcoin is nothing but a “different” way to store value transfers.
Blockchain is nothing but a “different” way to store transactions, events, entries, logs etc.
Texas A&M Transportation Institute
16
Transportation Policy Research Center
[email protected]
Texas A&M Transportation Institute
17
