When BigchainDB CEO Bruce Pon was working as a project manager for automaker Daimler in the mid-2000s, he envisioned a simple solution for generating and verifying the story of a vehicle.
How was it driven? How many miles were on the clock? And so on.
Gathering and presenting this data was possible, but maintaining its veracity simply wasn't possible at the time.
"It was an idea I had thought of in 2008. Why couldn't you create a 'digital twin' of a vehicle, of all the parts, and the actions that have occurred on that vehicle?" he said.
This "twin" would serve as an immutable version of the car, detailing how many miles it had driven, or if its maintenance was up to scratch.
Pon told CoinDesk:
"We looked at doing this in 2008 and the technology wasn't there because we didn't have blockchain, we didn't have this universal basis for people to confidently share information."
Fast forward nearly 10 years and Pon's startup, BigchainDB, is immersed in an ongoing project with German energy company Innogy revolving around just this concept.
The project's ambitious aim is to create a digital identity on the blockchain of any physical good that will verify its provenance.
The clocking problem
The secondhand car market is rife with question marks and even outright fraud. Sellers and dealerships could tamper with a car's odometer to reduce the number of miles on the clock, making the vehicle appear in better shape than it actually is.
Odometer fraud, or "clocking," is by no means new, but it's an issue that continues to plague the industry.
A Ferrari dealership in Florida, for example, became wrapped up earlier this year in a lawsuit that claims it was clocking odometers on its luxury cars.
To tackle this, Pon's CarPass project creates a record of the odometer and vehicle activity with the data visible and verifiable on the digital twin platform.
"If someone starts tampering with the mileage, you basically see it as a step change in the data that someone tampered with [it]," said Carsten Stöcker, who heads up Innogy's blockchain efforts.
But clocking is just one component. CarPass wants to record and show the entire story of a car.
The system captures information from a car's telematics box, and logs the data on the ledger. The telematics box, or "black box," measures how the car has been driven and operated.
However, on its own, the black box is not enough.
"One of the big problems was that nobody trusted one specific entity to own that automotive data," said Pon, adding:
"With digital twin, what it means is, in a blockchain environment, you can have different parties giving you different information, so a TomTom device could give navigation, geolocation; [Internet of Things] could give you whether or not the shocks in the brakes were used harder than normal. The car manufacturer or components supplier could give additional data about components for predictive maintenance."
This creates a "true story" of the car, he said.
But there are other advantages as well.
This data can be used for predictive analytics to help estimate a more accurate resale value, or if the car has been abused as a result of the driver's handling of the vehicle. This immutable data and verification has benefits for insurance providers, dealerships and drivers themselves, since they can trust the data provided.
The scalability of blockchain is a potential inhibitor of the system, though, especially when it comes to fees like those seen on the bitcoin blockchain.
CarPass and the digital twin was first built using ethereum as the prototype, but the team eventually shifted to a newcomer platform called IOTA for the proof-of-concept.
Unlike other blockchains, IOTA's peer-to-peer Tangle network allows IoT devices to share data with no fees, said David Sonstebo, founder of IOTA, adding:
"You want to ensure that that data is completely tamper-proof and that is what any distributed ledger can bring. But IOTA can bring it in a unique way in the sense that it doesn't get inhibited by fees and scaling limitations like regular blockchain."
In the proof-of-concept, IOTA manages the many transactions taking place at speed and keeps the costs down, while Bigchain captures and stores all the metadata from these transactions.
Into the real world
So far, Innogy has already rolled CarPass out across one of its car fleets in a trial aimed to demonstrate the service in action.
And there are plans to expand the number of trials too.
"We are in touch with a couple of automotive OEMs [original equipment manufacturers] and they're preparing proofs-of-concept to experience the technology," he said.
Yet, CarPass is just one proof-of-concept for the digital twin idea, and much wider uptake will be needed across different verticals to realize its full potential.
Innogy and BigchainDB are also working with Austrian blockchain startup Riddle&Code to develop a test for authenticating clothing with a blockchain, embedding NFC chips in the material.
The next step is building an ecosystem around the digital twin platform, Stöcker added:
"We are in now in discussion with other industrial players to form a consortium."
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in BigchainDB.
Odometer image via Shutterstock