In recent years, global commerce has been undergoing a paradigm shift characterized by increasing digitization and the rapid evolution of value chains enabled by connected things. The “Internet of Things,” or IoT, describes the growing decentralized network of connected entities and devices which can autonomously communicate and transact with each other using sensors and embedded software.
Today, there are nearly 15 billion connected vehicles and things in use worldwide; by 2025, that number is expected to grow to 31 billion. The market is projected to grow from USD 478.36 billion in 2022 to USD 2,465.26 billion by 2029.
This technology has enormous implications for consumers and organizations alike. For consumers, it spells a more seamless way of interacting with the devices used in day-to-day life. Likewise, many industries across the globe are increasingly turning to IoT to automate business processes, support the development of interoperable value chains, and enhance asset management.
However, in order to ensure the execution of secure, privacy-preserving, trusted IoT transactions in a decentralized ecosystem, it is necessary to develop new ways to identify and verify the entities involved in these transactions. In light of growing cybersecurity threats, the rise of big tech data monopolies, and new data privacy regulations, consumers and organizations alike are increasingly concerned with the ability to preserve data privacy and assert ownership over one’s own identity and digital assets.
Today, connected entities – including individuals and organizations – rely on identifiers such as phone numbers or government ID cards issued by centralized authorities to prove they are who they say they are. Financial institutions are required to reference these identifiers to verify a customer’s identity during transactions per standardized Know Your Customer (KYC) procedures. However, in addition to being demonstrably vulnerable to fraud, identity theft, and data leaks, centralized approaches to identity management are not compatible with a decentralized ecosystem, where the explicit goal is to disintermediate those identity services.
The evident solution is to imbue connected entities with unique, tamper-evident, self-sovereign, Decentralized Identifiers (DIDs), developed by the W3C, anchored in a decentralized trust network. For MOBI’s community, this is the Integrated Trust Network, or ITN.
Having a trusted and portable identity would give connected entities the ability to autonomously engage as independent economic agents in cryptographically-protected transactions using Verifiable Credentials (VCs) and Verifiable Presentations (VPs) issued through a federated marketplace such as Citopia.
Around the world, government agencies are urgently pursuing trusted identity solutions to ensure optimal data security and bolster interoperability in the IoT commerce ecosystem. One example is the European Commission’s ongoing efforts to create a trusted and secure European Digital Identity. These efforts include proposed amendments to the eIDAS regulation, which would define guidelines for identifying and authenticating entities online using a Self-Sovereign Identity (SSI) framework.
MOBI is working with the European Commission (EC) and other government agencies to develop secure, privacy-preserving, and efficient ways to identify and verify connected entities using SSI. This began with MOBI VID in 2019, which defined a vehicle’s Self-Sovereign Digital Twin™ (SSDT™) and culminated in the creation of MOBI’s Web3 Infrastructure, the ITN and Citopia.
Since late 2021, a number of pilots have been launched to demonstrate applications for connected vehicle and IoT commerce using the ITN and Citopia. MOBI and the EC recently completed a joint pilot to test trusted identity management and emissions self-reporting for 280 million vehicles using Citopia and the ITN. The results of the pilot were a resounding success, with process flows being completed roughly seventeen times faster than what would be required for the emissions self-reporting use case.
The creation of a standardized framework for decentralized trusted identity will reduce the reliance on centralized authorities and empower connected entities to own and control their data. This will enable the execution of cryptographically-protected peer-to-peer transactions; enhance interoperability; and greatly reduce the risk of data leaks, fraud, data scraping, and other privacy threats currently faced by individuals and organizations around the globe.
By giving consumers greater peace of mind, enabling more seamless IoT transactions, reducing the cost of trust, and opening the door to a number of multi-party applications for business automation, trusted identity promises to unlock the potential for a more robust and democratic IoT commerce ecosystem.