“Y si tu frigo te hace la compra en el supermercado más adecuado?”
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Conferencia Blockchain/ Madrid 2017. Una jornada para descubrir más sobre la tecnología blockchain en españa, los casos de uso y startups que están trabajando en el ecosistema español. Autor: Manuel Machado, Responsable Global de soluciones blockchain, WorldLine.
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“Y si tu frigo te hace la compra en el supermercado más adecuado?”
- 1. A Connected Fridge could do the shopping for your entire household Use case presentation for Blockchain Madrid
- 2. 2 © Worldline 2017 Who am I? – Passionate about what you can do with technology, not with technology itself • Worldline (Atos): European leader in Payments & Digital Transformation • Member of the Blockchain Workforce Group and global SPOC for Blockchain projects • Focus on leveraging technologies to improve current services/business lines or create new ones. • Let’s share an example of a Blockchain-based solution; approached via the use case, not the technology manuel.machado@worldline.com @twManuelMachado
- 3. 3 © Worldline 2017 • Smart Shopper Program • Why we would use Blockchain • How would it work • Value proposition & Business Model • Q&A & Next Steps Agenda
- 4. 4 © Worldline 2017 Home Appliance Innovators face 2 critical challenges Stand out (from an ocean of constant design & functional innovation) Stand out (from an ocean of constant design & functional innovation) + Strengthen customer engagement (buy more BSH appliances and services in between purchases) Customer perceives a differential value both in the short & long-term (make their daily life easier so customers are interested in increasing engagement) Image designed by Freepik
- 5. 5 © Worldline 2017 Smart Shopper Program – A solution to attract new customers & increase engagement with your brand Monitor groceries in the fridge Monitor technical functioning Monitor to … ...be smarter Learn from Purchasing Behavior Define Purchasing Profile Search Best Provider Generate Smart Shopping List Connect all appliances Monitor Cycles of Consumption Image designed by Asierromero / Freepik
- 6. 6 © Worldline 2017 Smart Shopper Program – Customers feel empowered, in control of what is purchased but unloaded of admin tasks Image designed by Asierromero / Freepik “I forget to check on maintenance or supplies for all my appliances. I get notified if anything is required and if I validate, everything happens automatically” “I decide my purchasing profile, which products I want to add to my shopping list automatically and which are my priorities (total basket price, Km 0, local shops, response time, …)” “My shopping list is automatically populated with all products I have chosen to monitor (dish-washer pads, milk, mayonnaise, etc.). I can modify it and launch an order to looks for the best supplier ” “The system learns from my monitoring and purchasing behavior , even of non-monitored products, so my shopping list is each time more accurate”
- 7. 7 © Worldline 2017 Smart Shopper Program – Principles to be both successful & feasible Customer satisfaction • Facilitate daily life • User in control • Independent ecosystem • Transparency Security • Participants to be approved • Total privacy protection (data to improve service) • Secure & fast transactions Common Core Platform • Core platform worldwide, customized locally: − Localization − Active functionalities − Local participants Background image designed by Freepik
- 8. 8 © Worldline 2017 Smart Shopper Program – Product range targeted in the short, medium & long term Short term Consumables & groceries linked to monitoring capacity of devices Medium term Home related services (home supplies, security, domotics, insurance, etc) not necessarily linked to monitoring. Long term Any service or product that may provide value to Program users (i.e. travel offers, family activities, etc.).
- 9. 9 © Worldline 2017 • Smart Shopper Program • Why we would use Blockchain • How would it work • Value proposition & Business Model • Q&A & Next Steps Agenda
- 10. 10 © Worldline 2017 Blockchain - A shared database with specific characteristics Shared Publicly Decentralized Trusted Automated Secure Definition based on data from Autonomous Research “Blockchain Back-office Blockbuster” paper • Servers (nodes) maintain the entries (blocks) • Every node has a copy of the ledger and sees the new transaction data store in the blocks when created • No central authority require to approve transactions or rules • Anonymous user (permission-less) or not (permissioned) • Data is encrypted, need private key to see transaction content • Once recorded on a BC, data is immutable & irreversible. i.e. secured from tampering and revision. • New blocks are created only by network consensus. • It allows transactions to occur among unknown parties. • Software does not allow conflicting or double transaction to be added to the Blockchain. • Transaction can occur automatically once consensus reached. “A distributed database that maintains a continuously growing list of records, called blocks. Blocks contain validated transactions” (P2P)
- 11. 11 © Worldline 2017 Blockchain – Consensus to add Block to the Chain New block New Block Candidate Proof of Work Proof of Stake Vs Consensus Algorithm Network Consensus Blockchain Origin block Hash to spot fake blocks in the chain New Block as unique version of truth Network power to defend from attack Hashing Nothing-at- Stake Energy Consumption
- 12. 12 © Worldline 2017 Blockchain – Fits the use case (IoT + ecosystem) Easy to create a rich and autonomous ecosystem of suppliers. Fast and inexpensive transactions, even more with Smart Contracts. Transparent but protecting privacy. The lack of central control ensures scalability and robustness by mutualizing nodes resources, eliminating many-to-one traffic flows, decreases delay and overcomes the problem of a single point of failure. Security: BC realizes a secure network over untrusted parties which is desirable in IoT with numerous and heterogeneous devices. Fit & Challenges based on Seminar on “Seminar of Web Security and Privacy” by Prof. Alberto Marchetti-Spaccamela
- 13. 13 © Worldline 2017 Blockchain – Challenges for the use case (IoT + ecosystem) Proof of Work: it implies too much processing power (computing power and electricity consumption) and longer response times. Scalability: BC scales poorly as the number of nodes in the network increases. and IoT networks may contain a large number of nodes. Storage: the BC ledger has to be stored on the nodes themselves and it will increase in size as time passes. That is beyond the capabilities of a wide range of smart devices such as sensors, which may have very low storage capacity. Fit & Challenges based on Seminar on “Seminar of Web Security and Privacy” by Prof. Alberto Marchetti-Spaccamela
- 14. 14 © Worldline 2017 • BSH Smart Buyer Program • Why we would use Blockchain • How would it work • Value proposition & Business Model • Q&A & Next Steps Agenda
- 15. 15 © Worldline 2017 Impact on the Connected Appliance network – Example: WL Connected Home Platform Mobile app Consumer Electronics Customer backend Data Analytics (Codex) Field service3rd party Nest Withings Netatmo Com modules Cloud API Appliances (+ Home automation box) HomePublicinternet BC Node per Home or Appliance (Box vs Shared Address) Updated joint app or dedicated one Cloud BC Node per Home or Appliance
- 16. 16 © Worldline 2017 High-level functional flow – Private BC, PoS, devices validated by customer New device to request participation in BC User to validate the new device via app User to fill purchasing profile Monitoring (cycles, functionality, Groceries,…) Automated generation of Shopping List User corrects Shopping List & Validates Appliance /Home Node searches for right Supplier The node finds the right SC issued by a Supplier The supplier node may look for a SC for delivery Delivery closes open SC & triggers payment Payment done via wallet or direct debit Learning from Behavior SC: Smart Contract
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- [Image of person doubting] Why would somebody choose a BSH appliance against everything offered by competitors? Is it its design, the last connected functionality presented, the ecological impact of the product, The price? All that impacts on the final decision, but what if we could create a service that could shift the balance dramatically towards BSH? [Program logo] BSH Smart Buyer Program would propose BSH customers to: [Connect all HA] Connect all BSH HA own by a customer to BSH HA remote service and Smart Buyer Programs. [Monitor Technical Functioning] Provide remote monitoring to all of them, facilitating remote maintenance, fast and efficient interventions and reducing costs and off-time. [Monitor Cycles for Consumables] Monitor working cycles so that new appliance consumable requirements, such as dishwasher tabs, can be estimated [Monitor groceries in Fridge] Monitor groceries in the Fridge to estimate when new purchases of which product are required [Define Purchasing Profile] It is not the last thing to do but one of the most important. [Generate Smart Shopping List] Populate a smart shopping list with all recommendations. [Search automatically best provider] for [Learn from Behavior] Learning progressively from the purchasing behavior to recommend the purchase of other non-monitored products such as home supplies or groceries out of the fridge.
- Explanatory text: BSH is a leader in the connected appliance market but it faces two clear challenges, as the rest of its competitors, that may impact its market growth potential: Despite constant investment on innovation, how to make customers perceive BSH as the right choice when facing an ocean of functional and connectivity innovation among the different brands. Once you have a customer how to increase the relationship with them (buy more appliances, increase the services used in between purchases, etc.) Our proposed approach: provide a service perceived by customers as: Truly differential in the short and long term. That will facilitate enormously their daily life, providing more value the more it is used. That will strengthen naturally the relationship with the brand, motivating them to buy more products and services from BSH. A nice collateral effect would be to develop a new business line that may end up being bigger than the current one (moving from customers buying the object to buying the service it provides).
- [Image of person doubting] Why would somebody choose a BSH appliance against everything offered by competitors? Is it its design, the last connected functionality presented, the ecological impact of the product, The price? All that impacts on the final decision, but what if we could create a service that could shift the balance dramatically towards BSH? [Program logo] BSH Smart Buyer Program would propose BSH customers to: [Connect all HA] Connect all BSH HA own by a customer to BSH HA remote service and Smart Buyer Programs. [Monitor Technical Functioning] Provide remote monitoring to all of them, facilitating remote maintenance, fast and efficient interventions and reducing costs and off-time. [Monitor Cycles for Consumables] Monitor working cycles so that new appliance consumable requirements, such as dishwasher tabs, can be estimated [Monitor groceries in Fridge] Monitor groceries in the Fridge to estimate when new purchases of which product are required [Define Purchasing Profile] It is not the last thing to do but one of the most important. [Generate Smart Shopping List] Populate a smart shopping list with all recommendations. [Search automatically best provider] for [Learn from Behavior] Learning progressively from the purchasing behavior to recommend the purchase of other non-monitored products such as home supplies or groceries out of the fridge.
- [Focus on customer satisfaction] The program main focus needs to be customer satisfaction, and everything is done to increase customer perception of this focus: Designed to facilitate daily life but keeping customer in control of what, where and when is purchased. Independent ecosystem not controlled by a sole company. BSH is the ecosystem sponsor and the main protector of customers’ interest and privacy. Total transparency on processes. [Security]: All players in this ecosystem need to be approved before participating. Total privacy protection (data used to improve service not to be sold). Secure and fast transactions among ecosystem members. [Common core platform] A common core platform to be deployed worldwide and customized locally in terms of Localization (user and supplier frontends adapted to the local language, legislation, and cultural requirements) Functionalities and business lines active in the local market. The local players (suppliers, transport, service providers, etc) approved to participate in that market.
- The range of products and services intended to be targeted by this use cases are the following, in order of priority: Key range: HA consumables (ex: washing machine powder) and groceries linked to the monitoring capacity of a connected fridge. Medium term range: home related services such as home supplies, security, domotics, connected insurance, utilities optimization, etc. They would not necessarily be linked to the monitoring of a specific HA. Long term range: any other service or product that may provide value to BSH HA owners (i.e. travel offers, family activities, etc.) and that may interest companies providing them because of the future important size of the BSH Smart Buyer community. The estimation of the quantity and quality of elements to be ordered by the HA will be calculated by an algorithm that will take into account the monitoring of the HA activity (i.e. number of cycles), balance of consumables bought against cycles done, purchasing profile filled by the HA owner and some machine learning applied to consumption behavior and ecosystem responsiveness to orders.
- Shared Publicly: servers, or nodes, maintain the entries (blocks). Every node sees the transaction data stores in the blocks when created. Decentralized: no central authority required to approve transactions and set rules. Each block is created when multiple nodes agree and validate the transactions. Public Blockchain: require computer processing power to confirm Permission-less blockchains: users are anonymous every node has a copy of Secure: Cryptography to register data, private key to see content of the transaction. All records are immutable & irreversable thanks to the use of cryptography and increase computer processing power. Posts to the ledger cannot be revised or tempered with, not even by the database operators. Trusted: its distributed nature requires that nodes reach a consensus, which allows transactions to occur among unknown parties. Automated: software is writen in a way that confliction or double transaction are not written in the data set, so transaction can occur automatically
- For a new block to be included in the Blockchain First a block candidate is created including, among others elements, the following: A set of new transactions The hash of previous block Public Keys from sender & receiver) A hash for the new Block Hashing: A known mathematical formula that is easily applied to the data of a Block to generate a Hash. A hash is a unique sequence of letters and numbers, far shorter than the original data. If you change just one character inside the original data, its hash will change and the block and all subsequent blocks would be spotted as fake. [Consensus Algorithm] A consensus algorithm does two things: it ensures that the next block in a blockchain is the one and only version of the truth, and it keeps powerful adversaries from derailing the system and successfully forking the chain. Proof of work Every node can be a miner. Miners compete to add the next block in the chain by racing to solve a extremely difficult cryptographic puzzle. The first to solve the puzzle, wins 12.5 newly minted bitcoins – and a small transaction fee. Disadvantage: it requires enormous amounts of computational energy, it does not scale well (transaction confirmation takes about 10-60 minutes) and that the majority of mining is centralized in areas where electricity is cheap Proof of stake The most common alternative. Here, instead of investing in expensive computer equipment in a race to mine blocks, a 'validator' invests in the coins of the system.The validators are paid extrictly a transaction fee. All the coins exist from day one, the chance of a node to being picked to create the next block depends on the fraction of coins in the system you own (or set aside for staking). A validator with 300 coins will be three times as likely to be chosen as someone with 100 coins. Disadvantage: the 'nothing-at-stake' problem -> what is to discourage a validator from creating two blocks and claiming two sets of transaction fees? And what is to discourage a signer from signing both of those blocks? One answer is to require a validator to lock their currency in a type of virtual vault. If the validator tries to double sign or fork the system, those coins are slashed. Peercoin was the first coin to implement proof of stake, followed by blackcoin and NXT. Ethereum currently relies on proof of work, but is planning a move to proof of stake in early 2018. [Network Consensus] Once a validator creates a block, that block still needs to be committed to the blockchain. Different proof-of-stake systems vary: Every node in the system has to sign off on a block until a majority vote is reached, In other systems, a random group of signers is chosen.
- Good Fit: Easy to create a rich and autonomous ecosystem of suppliers (supermarkets, small shops, delivery companies, etc.). Fast and inexpensive transactional fees. Smart Contracts make it even more dynamic Transparent but protecting privacy: all users see all transactions but only the concerned can see its content. If it is a permissioned BC, users can be anonymized but identifiable. The lack of central control ensures scalability and robustness by using resources of all participating nodes and eliminating many-to-one traffic flows. This also decreases delay and overcomes the problem of a single point of failure. Security: BC realizes a secure network over untrusted parties which is desirable in IoT with numerous and heterogeneous devices. Challenges: PoW implies too much processing power and response time. Scalability: BC scales poorly as the number of nodes in the network increases. But IoT networks may contain a large number of nodes. Storage: the BC ledger has to be stored on the nodes themselves and it will increase in size as time passes. That is beyond the capabilities of a wide range of smart devices such as sensors, which have very low storage capacity.
- Good Fit: Easy to create a rich and autonomous ecosystem of suppliers (supermarkets, small shops, delivery companies, etc.). Fast and inexpensive transactional fees. Smart Contracts make it even more dynamic Transparent but protecting privacy: all users see all transactions but only the concerned can see its content. If it is a permissioned BC, users can be anonymized but identifiable. The lack of central control ensures scalability and robustness by using resources of all participating nodes and eliminating many-to-one traffic flows. This also decreases delay and overcomes the problem of a single point of failure. Security: BC realizes a secure network over untrusted parties which is desirable in IoT with numerous and heterogeneous devices. Challenges: PoW implies too much processing power and response time. Scalability: BC scales poorly as the number of nodes in the network increases. But IoT networks may contain a large number of nodes. Storage: the BC ledger has to be stored on the nodes themselves and it will increase in size as time passes. That is beyond the capabilities of a wide range of smart devices such as sensors, which have very low storage capacity.