June 25, 2018 | Written by: Ashley Lannquist
Categorized: Blockchain announcements | Blockchain events | Hyperledger Fabric
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On May 2, 2018, the Mobility Open Blockchain Initiative launched at the Dubai Future Blockchain Summit. MOBI is a new consortium for blockchain innovation in the mobility industry. The consortium was founded by leading automakers including Renault, Ford, GM, and BMW, and now represents more than 80 percent of global auto manufacturing by volume. I’m excited to be part of the organization as it also grows and expands to additional mobility sectors like railway and public transit.
What is MOBI?
MOBI’s members include leading blockchain and technology startups and premier organizations such as IBM, Accenture, and ConsenSys. NGOs and academic institutions such as the World Economic Forum and Blockchain at Berkeley are also involved. These parties all believe in the value of multi-party and cooperative development of new blockchain technology solutions for industry.
What’s your potential blockchain ROI?
MOBI’s first projects develop blockchain use cases and technology standards for automotive applications. Our first project is to build a vehicle digital identity prototype or car passport that can track and secure a vehicle’s odometer and relevant data on distributed ledgers. This can dramatically reduce fraud in used car sales as buyers can finally have an accurate vehicle history. Notably, it also addresses economist George Akerlof’s Nobel-prize winning thesis on information asymmetry in used car sales, expressed in The Market for “Lemons”: Quality Uncertainty and the Market Mechanism. It also helps car dealerships and insurers to accurately underwrite a vehicle’s history for warranties and insurance policies.
MOBI’s roadmap includes several other high-value use cases for blockchain in mobility, like setting common and interoperable data and technology standards and addressing notable challenges in blockchain R&D such as protocol and application scalability and security. Each use case will be developed by specialist committees within MOBI and led by consumer-facing mobility providers in the consortium. Through open co-development in MOBI committees, these solutions have a much higher likelihood of industry-wide adoption than if they were built by any player independently.
What is the value of consortia for enterprise blockchain innovation?
Within the automotive industry, almost every major automaker was already experimenting with blockchain proof-of-concepts (PoCs, or early-stage software prototypes). MOBI arose because these automakers saw the need to communicate and set standards so that the PoCs and solutions could be applied at industry-scale.
More generally, the consortium format has several benefits for companies exploring blockchain innovation. As mentioned above, it allows the multiple parties within an industry to communally set technology standards, share R&D resources, and work towards common prototypes with high potential for industry-scale.
Consortia also allow members to engage with leading technology startups and firms in a more streamlined manner. MOBI is an open organization, and it allows companies to meet and explore services offered by top mobility and blockchain startups all at once. This helps everyone save time and levels the playing field to work with the best companies.
Of course, there are also some criticisms of consortia — they have mixed track records, can be large and unwieldy, charge fees, and tend to build solutions more slowly than a company could on its own — however, I’m adamant about their value and would argue they are necessary for industry-wide blockchain adoption. As the saying goes, “if you want to go quickly, go alone. If you want to go far, go together.”
The future of enterprise innovation
“Setting up a consortium is the only way to move forward.” A senior blockchain innovation officer at a leading European mobility provider expressed this sentiment in a meeting this week. I hear it often now, as I have started to advise and share the experiences of MOBI with leaders in additional industries who are considering blockchain consortia.
MOBI is as a new leading example of a high-impact consortium that can propel successful R&D in its industry. However, its greatest significance is what it foretells for the next generation of blockchain enterprise R&D.
Fading are the days of single-company PoCs and closed-door R&D. The future of blockchain innovation will be led by consortia and similar open-innovation working groups. This is a different model that is unnatural to many: Competitors, suppliers, regulators, government agencies, and other consortia themselves will all convene around the same table. MOBI is proud to include tier one auto suppliers alongside existing blockchain consortia such as The Trusted IoT Alliance and The Linux Foundation’s Hyperledger Project. Importantly, competitive privacy and security concerns will also need to be addressed as we build each use case.
The new era of enterprise blockchain R&D recognizes the value of multi-party cooperation to address common industry and technology challenges, to create interoperability and solutions that scale, and to collaboratively re-imagine business models for the future.
In the end, blockchain applications are premised on peer-to-peer engagement around shared ledgers and databases. To build successful solutions, industry working groups must include competitors, suppliers, regulators, and all other stakeholders. This is how we can build minimum viable networks and scalable, secure and safe solutions. MOBI is not only an example of a blockchain industry consortium at scale. It is also a necessary next step in the evolution of enterprise blockchain R&D.
From time to time, we invite industry thought leaders, academic experts, and partners to share their opinions and insights on current trends in blockchain to the Blockchain Unleashed blog. The opinions in these blog posts are their own, and do not necessarily reflect the views of IBM.
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