Using blockchain and Watson IoT to purchase, activate and track an object

By | 7 minute read | February 27, 2017

Mobile World Congress

While on site at the Mobile World Congress 2017 event in Barcelona, we caught up with Joel Viale, an IBM certified IT Specialist, to talk about blockchain and IoT.

Joel has been super busy showing customers how using blockchain and IoT together can help to create and monetize new business solutions. To help, he’s created a pretty cool demo which can be seen in the Private Solutions Lab on the IBM Stand 3H30 in Hall 3. Here’s what we learned from Joel in today’s Insight from Experts Interview.

Q: Can you tell us a little bit about yourself, Joel?

I am a solution architect in the Telecom, Media & Entertainment Solutions Lab in Europe, where my primary responsibility involves working with solutions for IoT and Blockchain, Big Data & Analytics as well as Order Management. To this end, I have been involved with several customer trials, proofs of concept, and end to end solution prototypes to demonstrate IBM capabilities in response to industry challenges.

Q: Are there any specific challenges blockchain and IoT technology can help communication service providers overcome?

As you know, blockchain with IoT together offers organizations a real game changer – paving the way for them to literally invent new styles of digital interactions, enabling IoT devices to participate in blockchain transactions, as well as creating opportunities to reduce the cost and complexity of operating and sustaining business.

This is even more relevant for communication services providers (CSPs) operating in a highly competitive, fast-paced environment where they need to capture new revenue streams by providing platform services to businesses. By exposing digital services that enable small businesses (such as vending machine companies) to automate and improve efficiency of operations and supply chains, they are opening up lines of business which can help to transform their current model, putting them in a better position as a digital enabler.

As a result, a CSP can then participate in the platform economy and ecosystem upon which companies can create and sell new products and services. By moving from product-based business models to platform models, CSPs become essentially digital services enablers (DSE) and can tap into new revenue streams.

Q: How easy is it for CSPs to create and monetize IoT solutions?

It’s very easy for CSPs to create and monetize new innovative business solutions for today’s digital economy by using the IBM Bluemix platform, Node-RED, and API Connect to expose and integrate with a rich set of Open APIs published by the TMForum.

In the business scenario I am sharing with clients today, we can clearly see how CSPs can extend their IoT reach to consumers, through the provisioning of an eSIM within a consumer product (in this instance, the luggage tracker.)

Q: Can you tell us about the business scenario you are using in the demo?

This demo showcases how communications service providers can use Bluemix as a Cloud and Watson IoT Platform to build new types of revenue-generating applications and business models, putting themselves at the center of connected ecosystems, while becoming digital service enablers. Specifically, there are two use cases within a demonstration.

Q: Can you explain how it works?

In this business scenario, the CSP wants to provide an end-to-end-solution to vending machine companies to connect and manage their vending machines as IoT objects.

CSPs can expose their capabilities following the TMForum Open APIs and manage the use of those APIs using API connect. They can use Watson IoT Platform and Node-RED to integrate the different parties, create workflows from tasks like partner on boarding, vendor machine replenishment, mobile payment and settlement. In addition, CSPs can also use blockchain to manage the inventory of the vending machine, the settlement and distribution of money to the different parties – the supplier of the CSP, the vending machine company itself, and also the activation and management. This scenario represents a specific use case. All the capabilities within this use case can be applied to other scenarios too.

Q: What makes this business scenario interesting to CSPs?

The ecosystem in this scenario involves different parties. First, the company that manages and runs the vending machines, and second, the suppliers who provide various goods to be used in those machines. There might be multiple CSPs that participate in the process who would also be part of the ecosystem. For example, the first CSP could be providing the IoT platform being used to connect the machine; a second CSP might provide the mobile payments solution and functionality so the consumer can pay for goods using their mobile phones; and finally, in the example I am talking about today, a potential third CSP that provides a luggage tracking service and application that allows a consumer to follow their luggage on a worldwide basis.

Figure 1: Vending Machine & CSP ecosystem

Vending Machine CSP ecosystem


Q: How is luggage tracking relevant? Can you explain that to me?

Let’s imagine the vending machine is installed in an airport and serves electronic devices – in particular a luggage tracker with embedded SIMs. The consumer purchases the device just before travel, installs it in a piece of luggage, and starts to follow its progress through a mobile phone.

In this instance, there are two main use cases within the demonstration – the first is the Intelligent Vending Machine with Mobile Payment & Settlement. In this use case, the customer buys a luggage tracker on the vending machine, using mobile payment. Inventory, payments & settlement as well as revenue assurance is managed in the blockchain. The second use case, the eSIM activation and luggage tracking app, shows how the customer activates the eSIM and starts tracking its luggage using the mobile app.

Q: Can you explain how the business scenario runs as a demo?

In the first use case, the vending machine records each transaction in the blockchain. The blockchain calculates new balances for each company and updates the inventory of the vending machine.

The vending machine platform is running on Bluemix, and the vending machine is connected to the platform through Watson IoT Platform. The platform uses the TMF APIs to:

  • On-board new and manage existing suppliers (for catalog, agreements, parties)
  • Manage the master product catalog
  • Manage the order and settlement notes

The consumer buys the luggage tracker on the vending machine, and pays using mobile payment. Then, the transaction is recorded within a private blockchain ledger.

The money, actually received by the CSP providing mobile payment, can then be redistributed to the different parties in the ecosystem – the vending machine company, suppliers, etc. The vending machine inventory is also managed in the blockchain. It provides a trustable and immutable way for each party to participate in the ecosystem and claim its share of value.

Figure 2: Use case 1

Use case 1

In the second use case, we take a look at the eSIM activation and luggage tracking app. In this instance, the purchase of the luggage tracker triggers a Node-RED flow, which will:

  • Register the new luggage tracker device in Watson IoT Platform (shown live on Bluemix)
  • Request the activation of the eSIM to the CSP (with appropriate authentication credentials so that the eSIM can publish location data to the platform.)

The eSIM activation can be done in Bluemix, as well through integration with Jasper, or Malima for example. The eSIM activation is also recorded in the blockchain. And, the consumer downloads the luggage tracking mobile and starts following his luggage on a map. Here’s what that process flow looks like:

Figure 3: Use case 2

Use case 2

Q: Can you elaborate a bit on where blockchain creates value in each of these areas or processes?

Using today’s demonstration, blockchain can create value in at least three areas:

  • The supply chain: by creating a reduction of settlement cost, payment and revenue assurance. You can learn more about reduction of disputes by watching a video clip of the IBM Global Finance case.
  • Vending Machine IoT: blockchain makes available to the suppliers and the whole ecosystem the environmental conditions of the vending machine (potentially for traceability) and the current inventory.
  • eSIM provisioning: the value is about the reduction of fraud with eSIM provisioning for a vendor’s product and the cost of that connection. For example, according to the Communications Fraud Control Association, carriers accumulate globally about 3.6 Billion US dollars in losses from account fraud just for one year.

Learn more

To discover how IBM Blockchain and Watson IoT can help, watch the complete demo, check out the Watson IoT and Blockchain page, or contact a representative today.

Asking the expert

If you have questions or comments, please reach out to Joel on both Twitter and LinkedIn.

Joel Viale