Generic Life Cycle of Products on the Quasar ledger

Introduction

The National Institute of Standards and Technology (NIST) wrote back in 2008 that „A key strategy for a manufacturer seeking competitive advantage is to ensure all stakeholders rely on sharing a common product description throughout the product’s lifecycle. Detailed product information cannot be kept isolated within any single entity of the extended networked enterprise but must be shared in a collaborative and secure manner across the global enterprise and its extended value chain.“

At that time of writing, there was no blockchain technology (first bitcoin transaction was in January 2009). The blockchain technology provides the “source of trusted information” infrastructure for the whole value chain.

Project in healthcare

 

Goals

In a project for a leading manufacturer of special purpose devices, Quantoz implemented its Quasar blockchain technology not only to share information but also to achieve a better insight in costs and revenues that are achieved for every individual product.

Supply chains, increasingly have to deal with regulation. The Quasar blockchain holds the complete provenance details of each component of the product and is accessible by all involved parties, including authorities and/ or insurance companies. This creates a clarity and increases the transparency.

An immutable and auditable database, accessible by multiple parties enables also a full traceability of components and products in case of quality issues. Last but not least big data analysis on the Quasar ledger become possible questions like, which business models generated how much revenue and which components needed to be repaired? can be answered.

Scope

Figure 1

In this project, we looked at three of the five phases of the Generic Life Cycle of Products (figure 1) as defined by the NIST, namely Manufacturing, Transportation and Utilization:

1. Manufacturing

At the beginning of the manufacturing process, a digital wallet “P” is assigned to a product (figure 2), i.e. by using the serial number as the wallet’s identifier. This wallet is funded by the corporate treasurer, enabling the product to pay for components, machine usage and labor workforce during the manufacturing.

Information about each production step (i.e. which materials and components were used and what were the results of a test) is saved in documents. These documents are stored on the Quasar blockchain ledger and are immutable. Access to this information is granted via the product’s wallet.

The results at the end of the manufacturing process are:
– Immutable and auditable “bill of material” for each individual product. This information increases the transparency for the end users and is an important step to fulfill compliance and regulation.
– Insight in production costs for each product for every step in the manufacturing process.

2. Transportation

The advantages of the blockchain in the supply chain were already described in several publications about the Quantoz project with BASF. In Supply Chain Quarterly, BASF stated “And because blockchain provides a transparent and immutable record of transactions that can be shared by a wide range of supply chain partners such as suppliers, customers, banks, and customs authorities, BASF also believes that the technology will improve business models and processes such as vendor-managed inventory, automatic customs clearance, and pay per use“.

All the information about the product is in the product’s wallet and is available for customs, distributors and authorities. Like in manufacturing, the product can pay the logistic services, warehouses etc. from it’s wallet.

3. Utilization

During the utilization phase, the product generates revenue. Business- or exploitation models, can vary from selling, renting or leasing the product to pay per use models. The digital wallet of the product enables full flexibility with regards to the deployment of new business models.

Because it is known which components are installed in which product over the whole life cycle – including every repair made and every spare part exchanged -, traceability in case of a safety issue or a production error can be done within minutes instead of days or weeks. A so-called push message to the product(s) in which the component is installed, immediately informs the possessor.

Figure 2

Costs for maintenance, materials, spare parts and product audits are still being paid by the product. At the end of the product life cycle, the treasurer defunds the wallet (figure 2).

Why blockchain?

Clear benefits of using blockchain technology in this project are:

– The product gets a digital identity. This identity can be used for secure communication purposes, like the exchange of information or a payment.
– Secure data storage of components and usage are stored on the “source of truth”-blockchain. There is no need for a trusted authority.
– The wallet with all the information collected during the product’s life cycle can also prove if a product was used in accordance with regulation and prevent that a product is (illegally) used after it has reached the end of the life cycle.

Digital watermarks on the Quasar Ledger

How to secure a supply chain from counterfeiting and theft with digital certificates

Supply Chain

The supply chain represents all the links involved in creating and distributing goods, from raw materials to the finished product. Customers and buyers have no reliable way to verify and validate the true value of the products and services they purchase because of the lack of transparency across the supply chain.

Blockchain

As a distributed ledger that ensures both transparency and security, the blockchain is a low cost to serve solution to fix the current problems of the supply chain. The public availability and decentralized structure of a immutable ledger makes it possible to trace back every product.

What makes Quasar so special?

Quasar is a blockchain ledger with a compliance layer on top of it. The compliance layer validates for every transaction if it is complies with a set of rules. These rules can be defined with QuBIC, the Quasar Business Intelligence Center. QuBIC allows users to create their own type of wallets (=participants in the supply chain) and assign additional rules for receiving and sending of digital certificates. Read “Building Virtual Private Payment Networks with the Quasar Business Intelligence Center” for further information about QuBIC.

In the example below, four different types of wallets are defined in QuBIC.

1. The manufacturer wallet. Wallets of type Manufacturer have the right to create a certificate on the Quasar ledger and send this certificate to a wallet of type “Distributor”. The certificate can include information like a (hashed) serial number.

2. The distributor wallet in return may accept certificates from manufacturers. In case of a defect, not only the product but also the certificate can be returned to the manufacturer. The distributor can send and receive certificates to and from wallets of type “End User”.

3. End User wallets may accept certificates from a distributor wallet and from other End User wallets. In case of a defect, the product and the certificate can be returned to the distributor.

4. At the end of the product life cycle the physical product will be demolished. Because entities on a blockchain can not be deleted, the certificate must be send to a Cemetery wallet. Even in the case the product is not physically demolished, anyone can see that it has reached the end of life cycle. Manufacturers can directly send certificates for broken products to the Cemetery wallet. The cemetery guarantees that a certificate will not be re-used with a fake product.

Authorities and Insurers

The blockchain ledger is immutable and transparent. All participants in the supply chain can view the history of a certificate. Of course this immutable information is also valuable i.e. for authorities and insurers. Not only to check if the conditions of the insurance policy are met in case of an accident, but also in case of theft; the policy holder transfers the certificate to the insurers’ wallet before the claim for compensation will be paid.

Reducing counterfeiting:

Publishing certificates on the Quasar blockchain ledger also reduces counterfeiting. If an organization has a certificate but not the product everyone else thinks this organization has the product; this is of course an unwanted situation, especially when the certificate deals with sensitive products that can be used for criminal activities.

If an organization has a product but without a certificate it is very likely that one has a counterfeiting or stolen product.

3D printing and certificates

In the future, instead of delivering the final product, manufacturers will increasingly deliver a 3D printing instruction set to the end user. Advantages are, reduced (capital binding) stock, faster delivery without distributors.

Digital certificates are an effective way to avoid the risk of illegal copies when distributing digital print instruction sets, because they can not be duplicated.

Furthermore the blockchain transaction can include an encrypted message (i.e. including password and checksum of a zipped printing instruction set) that only sender (manufacturer) and receiver (end user) can read. This message guarantees authentication and data integrity of the printing instruction set.

 

Building Virtual Private Payment Networks with the Quasar Business Intelligence Center

The Quasar Account model

Quasar employs 4 types of blockchain wallets representing four different usage types, depicted with the following colors:

WHITE – Asset issuer account (board of the payment network consortium)

GREEN – Consortium member accounts (with financial license)

BLUE – Identified customer accounts, i.e. consumers and enterprises (issued by green account)

RED – Independent issued accounts (by people or even by devices, optionally related with a parent blue wallet)

The wallets are based on private/public key encryption technology, where the public key represents the account and can be shared with other account holders to receive payments (or as the ‘from’ account when you send payments). The private key is to be kept secret by the account owner(s) and is used to prove ownership of your account (to sign transactions for payments from your account or to prove identity).

The different types of wallets have different rights on the creation of new wallets and closure of existing ones. The digital payments are between blue and red wallets (digital micro payments). Of these only the blue wallets can transact with the green wallets. Between green and blue wallets money is transferred from the customer’s bank account to his digital wallet and vice versa (“batch” payments that can aggregate many digital payments). The holder of the green wallet guarantees the reserve of issued money to the holder(s) of the blue wallet(s) and has a debt relation with the white issuing account that initially creates the assets.

The owner of the green wallet can decide to manage the customer’s blue wallets like debit accounts (where the blue account holders can pre-fund the account from the green account using the a bank payment) or like credit accounts (where the green account pre-funds the blue accounts up to a certain limit and the credit balance is settled once a month). Positive balances on blue accounts can be paid back by the green wallet to the bank account of the blue account holder. Red wallets don’t have credit.

QuBIC, the Quasar Business Intelligence Center

QuBIC allows users (focusing on enterprises) to create their own type of wallets and assign additional rules for creation of child accounts and receiving and sending of payments.

 

Wallet type creation. Rules are applied by the Quasar nodes

For receiving and making payments

Signing payments

Create child accounts

 

Event based transactions. Tx are executed by the wallets

Manually

Time interval

Incoming transaction

Deposit and withdraw

 

A “virtual private payment network” can be defined with these rule sets for wallets and payments. Advantages of a VPPN:

  • Full control over all participants at all time. Adding new members (accounts) with certain roles is easy; blocking wallets is possible all the time.
  • P2P instant payment at no costs. Blockchain enables instant irreversible payments.
  • Identity is inherent into the system. The wallet owner is identified via the public key.
  • Smart contract can be added.
  • Cost or profit centers can be defined with user wallets.

 

 

QuBIC Role Interaction View: After Wallet Types have been created, accounts can be assigned and payment rules defined.

QuBIC implementation for a car sharing service

Below is a picture from the Quantoz Crowd Charging Concept. The concept is developed to offer more charging points for e-driven cars. If we look at the picture from the perspective of the Car sharing company, every car could be defined as a profit center. All cars have their own Car-Wallet. The Car-Wallet is a special type of wallet and is defined in QuBIC. Following rules can be assigned to the Car-Wallet:

  1. Car-Wallets can only accept payments from a specific type of digital wallet. These wallets are issued by the car company, e.g. during the customer boarding process.
  2. Car-Wallets are only allowed to make payments for charging energy from specific charging points. These sockets must have another specific wallet.

The accounts can be used to send or receive payments, but in case of a rental device (like a car) the private/public key of the account can also be used to prove identity. The transaction from the account of the customer that is used on the internet to pay for a car will also provide the recipient (the car rental company) with the public key of the account owner. The same public key can be used from the account owner’s wallet to prove his identity when arriving at the car.

 

When a device (like a car) has an internet connection it can check the balance of its account itself (with the public key) and instantly notice incoming payments to its wallet. The device could also execute payments, if it holds the private key of the account in the local wallet. The private keys can also be centrally managed from a company wallet.

Adding new services and third parties to the X-Now eco system

The model can easily be extended in QuBIC. Not only crowd charging but also crowd parking services, where private households offer their parking space, can be added to the system.

Furthermore members of third party (i.e. airlines) loyalty programs that are based on the Quasar infrastructure can be added to the Car Sharing Program with adding only two rules to the network:

  • Car Wallet: accept payments from loyalty program wallets
  • Loyalty Program Wallet: Allow payments to Car Wallets

Crowd Charging Sockets

Any wall socket with a simple electronic add-on can become a pre-paid charging point.

The costs of such ‘smart wall socket’ could be less than 25 Euro and no memberships or payment processor fees are required by using the Quasar network.

This could allow for private people to create millions of semi-public charging locations which are needed to for the millions of new electric cars that are expected the coming years.

When using mobile devices with internet connection (like mobile phones), a wallet app can be used to initiate instant payment transactions by scanning the sockets QR-code

In the latter case, we make use of the Quantoz’ secure payment protocol where the device itself does not necessarily to be connected to the internet, but it can check the balance and receive payments using the communication channel of the mobile phone of the payer (with a Blue Tooth or NFC connection).

This way anything can become pay-per-use with a simple and cheap electronic add-on. Such micro payments option on any device could become a very important driver to enable the full potential of the Circular Economy!

 

 

Crowd Charging – a new approach to accomplish mass adoption of Energy Charging points

We all are aware that E-Mobility leads to less pollution especially in cities. A disadvantage of electricity driven vehicles is the limited driving radius without re-charging. This drawback would be eliminated if a dense network of charging points would be available.

Many people would be willing to offer a charge point if the initial costs for setting up such a charge point would be low and if there was a smooth way to get paid for the energy.

The average passenger car in The Netherlands drives less than 20 kilometers per day. With a typical range of 6 km/kWh, a standard home wall socket can provide this charge in less than an hour. An appropriate payment for this amount of charged energy is between one and two Euro. Such small payments are a challenge, as the traditional infrastructure for such a payment would be too expensive (internet connection for data transfer, card reader).

Also cash payments are not convenient. One would need a cash machine or pay the charge point operator personally. For the fist one a coin machine is necessary (which again makes it expensive), for the second option someone always needs to be there (24/7), which is no solution for such small payments.

The Quantoz Crowd Charging solution solves these two problems:

First of all, a charging point can be created by combining a smart crownstone, developed by Rotterdam based company DoBots and a traditional power socket (total costs less then 100€).

Secondly, the Quasar Payment Infrastructure is used to make the payment. The SPUR protocol enables the payment to the power socket without the need that the power socket is connected to the internet.

The payment is initiated by scanning the sockets’ QR-code with the Quantoz digital wallet application on smart-phone.

Paying this way for electricity is very convenient for the customer:

  • increased privacy, no need for a card membership, no information who charged how much electricity where and at what time (tracking)
  • Make use from a wallet that is installed on a smart-phone

But it has also a number of advantages for the operator:

  • Limited investment up front.
  • No financial risk because of advance (instantly settled) payments
  • No fees need to be paid to credit card companies or other payment service providers

The above described model is not limited to single persons and electricity driven vehicles. Operators can also be municipalities (there could be a charging point installed at every lamppost) and/or the owner of a parking garage. Electric bicycles and E-bikes can also make use of the charging infrastructure.

Smart Payments for sharing smart cars

One of the heavily discussed topics to reduce congestion in rural cities is to make use of smart cars. These driverless cars act like taxis and are paid for on the basis of a “pay per use” model. Quasar makes payments from user to a car possible. As a result of that, the car itself could also pay the electricity it charges

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