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Dr. Michele Nati: Blockchain and Telco: Opportunities, Challenges and Use Cases


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Mean the main role that we see blockchain will play in telecommunication infrastructure is to help this, this infrastructure to become more connected in a way that also the cost for the infrastructure, for the operational operation and also the provision of the infrastructure can, can be reduced by increasing collaboration and those as well, giving the opportunity for developing new and especially mobile services. Everything starts with some current trends that are actually transforming the, the industry. First of all, increase mobility connectivity with 5g and ability also to create new solution new application. On top of this, of this network takes the ability for cloud to virtualize. Most of the, of the functionality the network provide and, and combine different networks capability into one, one cloud in order to deploy new, new, new, new solutions. So at the same time, we start to see also more and more presence of internet things, especially with net band UT and technology that interconnect with large communication infrastructure, the ability of producing more data and create more data at the edge that can create already intelligence and knowledge at the edge.
At the same time, we see yeah, larger amount of data that need to be given some kind of meaning that can lead when combined with artificial intelligence, AI lead more to more automation. All of these require brings an infrastructure is much more connected to deal with many more, more data data, but also have some kind of inside risk to that. So, or as well opportunity. So the telco needs to embrace new opportunity. They need to reduce cost and they need to find new resources and, and revenue streams. We move from difficult communication service provider were mainly focusing on voice and, and recently on data on communication service provider, that can be the backbone infrastructure of a more connected, and let's say horizontal connectivity that provide connectivity across different domain and create new, new, new use cases. So we go from use case in the smart cities to smart energy, to smart industries and the smart X let's say domain that we can imagine.
So all of them need data, need an infrastructure that exists, but need as well, a way to collaborate and cooperate in a way that maintain infrastructure costs low and secure. So first of all, we, we, we start to see IOT connectivity and we start to see that peer to peer connectivity device need to come. Let's say, let's say very, very, very, very easily and need to come with a way that I IOT device can, can, can give their service to two different application. And there is a need for new model that enable this with micro micropayments. So we need to lower the cost for using I IOT device across different bound, different domain in different countries or connect. So at the same time, we need to remove the risk that basically device that connects in the I work are device that are malicious for the network.
If you think about slicing and provisioning of slice in the 5g domain. So we need to be sure what kind of device connect and we have to minimize also the, the cost due to roaming of this device that I mobile in some case. So all of this lead to device that connect and share different networks and the, the challenge will be to, to be sure that settlement happen in a very fast way across, across network. When resource from different network are used to interconnect I IOT device in a way that reduces well fraud, but also this manual process and makes everything much more fast and dynamic at the core of, of the, of all of this, there is a new opportunity for creating new identity system. So identity becomes very, very important for the telco domain and the telco IOT domain and idea of identifying device to the, to the owner and to guarantee that identity of the device manage the device becomes very important, but still a challenge to be solved.
And as well, 5g as said brings new, new possibility to new connectivity in different domains. All of these create challenge at the same time, there are opportunity for, for, for developing new, new, new solution to connect all these networks and, and device and, and, and the owner in a seamless way, in a, in a way that generate data in a secure way and provides service that can be paying a rewarded. So blockchain can have some of the element that all of this industry requires. So because blockchain allow first of all, to connect and provide a sort of data assurance as well as business assurance, that things are managing the right way. If you think about device accessing different network, we have to guarantee that service level agreement about using slices, for instance, in the 5g to be responded, to be maintained. So as well, blockchain can bring the, the value now of the centralizes, your identities, typical communication service provider already know a lot about their, their customer.
So they, they KC them. So instead of keeping this information between them, they can give back to, to their customer and their customer can give to their, to their device using a new paradigm. That is the one of the centralized digital identity. So digital identity also represent an opportunity for the industry itself to create new way to use the information that it has, but also to secure even more the access to the infrastructure. On the other end, when we talk about automation and ability to verify service level agreement, infringement of service level agreement, or roaming settlement. So all of this can be automated, can be automated in a trusted way, using smart conduct capability at blockchain, providing and present to the industry. So the blockchain basically add few elements, the mutability of the, the new, the centralized digital identity, and as well as smart conduct for automation that can provide a very good fit for the challenge that the industry is facing in a way that, of restructuring itself with the novel of new, new technology coming together, 5g, first of all, it and AI, but what we learn and what we face is that the industry itself is very well already established.
It relies on standard, rely on different technical requirement that need to be satisfy and fulfill from new technology that have to integrate with existing solution that, that are present in the industry as well as a very regulated industry. So I think about settlement agreement for SLA or for roaming, these are all well regulated environment. So this requires well that all the data that are shared now in new ways need to be still confined inside specific domain, specific jurisdiction, as well as the industry is very fragmented. So there are a lot of different player. You go from communication service provider, you go to business support system, provider, OSS, operation support system, provider, hyperscale, all of them. They different role, really very well established and the way that they can come together, they need to innovate need to come in a collaborative way. You need to provide a collaborative ecosystem for, for that.
So you can't think that you will have a solution that fits all, or you will have a solution that very easily can place existing process because we already face already experience that blockchain can be the solution to many things. So you can go from roaming to fully automated roaming with smart contracts, but that will create freely industries already established. So the progress need to be gradual need to be time by time. And also not all the blockchain will satisfy the need of this in requirements. As I said, these are technical legal, as well as let's say commercial, the way of operating, but there also more functional requirement like this industry needs scalability on infrastructure that itself doesn't add consumption and cost to infrastructure that is already the communication infrastructure that the telecommunication ins. So there are different lectures, different blockchain technology that can fit the bill of providing, let's say this, this, this requirement.
Some of them is the technology. We work as a got foundation. In our case, we don't have anymore blockchain. We have a different ledger technology that is based on the tango graph, what it brings, brings benefit that scalability. First of all, security, of course like any other blockchain and fact that the technology is in itself fearless. So you don't need to pay for using ledgers. You don't need to pay for actually sending any transaction to the ledger or to create an identity for a device and so on and so forth. It's energy efficient. So this doesn't add up to the bill of energy consumption that telecommunication infrastructure create. It's a technology that can run in different configuration can permission environment, meaning that the telecommunication player that, and that's what they're actually looking for. They can control, let's say the different node that manage the ledgers.
So it doesn't mean that they can control what goes into the ledger, but we actually read and write the ledger, which is a very important for regulatory point of view, as well as we can create a way to enable ecosystem because we work on standardize APIs that allow the system to interconnect. Like I said, not all the blockchain will be suitable for, for working with the telecommunication industry, especially the permissionless side. Sometimes very, let's say model for, for entrance to work with, with this kind of regulated environment, iOS, all the other feature that can, can be good for for that. And of course, to simplify adoption, to simplify interoperability and to simplify experimentation with this collaborative ecosystem, we need to provide a service. An enterprise level architecture goes from the ledger second ledge protocols, but then it start to look into different integration services. So the industry in itself likes the idea of the centralized centralization, the fact of distributed and the centralized single source of truth, but they don't dislike the idea of single source of single point of end, the source of truth.
So having APIs that allow access to the ledger and the ledger functionality in a more centralized way, typical of this industry with standard APIs is something that we learn and we start to build integrating our architecture so far. We've worked on, on a few use cases with the, with the industry, some of them I mentioned here, but I will go a bit more deep in some of them. First of all, we explore with the orange mainly and British telecom, Nokia, and other service provider OS and BSS, other than community service provider, the concept of creating new marketplace for networking infrastructure. So like I said before, the infrastructure become more, share more global, but there is a way to provide accountability who actually access the infrastructure. We use infrastructure for what services and so on and so forth. So this can reduce the capital investment and can reduce actually optimize the capital investment when the infrastructure is not only used by one service provider, but by many, for our horizontal use cases, I can also reduce the operative plus of, of the infrastructure itself.
We start to explore what role ledger in this case, smart contact can help in somehow tracking access to different level of infrastructure, whether it's tower for a connectivity, whether it's bandwidth, whether it's a slice. So optimize and decide. Also we get access if SLA it's compliant or not, but having always at the bottom, a layer of data assurance and then business assurance that things are done in right way. So blockchain can play a role in that. That's what we are experimenting. Similarly, we did more recently focusing on actually not every infrastructure element that was more on the, let's say advert side, but more on the let's say resource side. In this case, we focus this year, working with team and orange on actually monitoring access to different slides that go across different network providers. So if one provider guarantee slides to even service level agreement, the next one need to guarantee the same in a way that end to end the service can have the same level of service guarantee.
So we experiment this with he health services and yeah, we learn that this will be the ledger can play an important role in tracking SLA agreement first and then tracking violation of them with smart contacts, same and important. It's the ability of this industry to share data, so to share data through across data lakes. But the problem that we, we, we identify the industry is facing is actually guarantee identify actually where this data come from. That's one of, of the first problem where decentralized identity can, can play a role. First of all. So owner of a data lake sitting in a different infrastructure doesn't need to trust the device that are connected through another communication provider, just through the communication product itself, but it can trust through the, through the manufacturer. If you can expose some of the centralized identity in verifiable credential can be verified end to end without any central point of integration.
This remove risk for the industry to have single point of failure, to rely on trusted target without complexity. At the same time, you need to identify authorized access to these data lakes across different jurisdiction. And you can do this again with the centralized identity. So that's also, so we are, we are looking into just to conclude another important point. And the experimentation we are doing is understanding how good is the quality of data that goes from the edge down to the cloud and create new services. Again, the centralized identities can play the, the base layer where device quality, as well as device reputation in generating good data can travel across the network. We can travel across different jurisdiction. So from device IOT device deployed in a, in a, in a network managed by one carrier service provider down to service that are connected through another network, managed that by another carrier communication service provider, just sum map.
I don't know how I'm doing good time, but to sum up what we've learned so far is that at the very beginning I UT so blockchain can be a very disruptive technology for, for the industry can bring me opportunity, but face also some barrier and mainly the one of disrupting existing business model, existing player, or role that are already seen in the, in the ecosystem. So that yes, that all things need to start. Let's say bottom up instead of top down, building ecosystem, understanding the right opportunity to collaborate and also identify how the destruction that blockchain will bring other than the benefit can be an opportunity to open new business models. So understanding new business models, a very important point, for instance, understanding a new business model for the centralized digital identities that share some of the knowledge that every provider knows about their customer with.
Let's say with other customer in a way that doesn't create any competition, but getting opportunities. So that's a very good example of understanding new business model that can derive with, with, with the blockchain similar is for roaming. So roaming gets done in a specific way, automating it with smart contract. You need to understand again, what will be the new business model for providing this this way in respect of past way of doing that. And of course, always keeping an eye on develop things in a way that fulfill this layer architecture at explain before where you have an easy way for different layer in ecosystem of the telecommunication to interconnect using standard. And of course, focusing on the right governance for how the, this typical ledger technology, the blockchain itself used by the industry should be, should be leveraged. That's about it. I think the word can be more and more connected if make distributed ledger, be the glue across different connectivity island or connectivity service that telecommunication brings. But yes, we need to do this in a way that build from the ground and develop this ecosystem approach. So that's about it. Like I said, we don't do this alone. We, we are very much open and what we have learned it's that working ecosystem development is the most important things. And yeah, I'm happy to have any question if there is.