Open Source Identity and Marketplace Technologies for the Digital Economy
In February of this year, the IOTA Foundation and the Eclipse Foundation launched the Tangle EE Working Group to accelerate the development of permissionless, enterprise-grade, and open source tools based on the IOTA Tangle for creating payment and data use cases.
IOTA envisions a new trustless digital economy facilitated by its Distributed Ledger Technology (DLT), known as the Tangle. The Tangle provides an open infrastructure that overcomes many of the issues with traditional blockchain technology. The Tangle protocol is scalable, publicly available, and does not require fees to use. It also provides much faster overall throughput than classical blockchains. These advantages make the Tangle an ideal platform for all types of organizations to participate in the new digital economy.
Founding members of the Tangle EE Working Group include major corporations, such as Dell Technologies and STMicroelectronics, as well as a number of software companies, energy industry players, standards bodies, and universities from across Europe. The Working Group is currently promoting collaboration around two projects that will enable important use cases in the digital economy:
Each of these projects builds on the base Tangle protocol, which provides a free and secure way to exchange value and data of any kind.
Eclipse Unified Identity Project: A Trust Layer for Digital Transactions
Today, there is very little trust in online transactions. You have to enter your personal information on many websites, but there is no effective way to prove that the identity presented actually represents the person claiming it. There is no trust layer.
To create trust, the Eclipse Unified Identity project builds on the base Tangle protocol to enable people, organizations, and machines to prove information about themselves online. The Unified Identity protocol is an implementation of Self Sovereign Identity (SSI) that implements the W3C proposed standards for Decentralized Identifiers (DID), Verifiable Credentials, and other proposed decentralized identity standards (Figure 1).
Figure 1: Decentralized Identifiers and Self-Sovereign Identity
This trust layer can be applied to almost every type of internet transaction. For example, proof of identity is required between:
- An individual and a business in the case of online shopping
- Two machines in the case of a self-driving car that automatically pays its fees at toll booths
- A machine and a business in the case of a refrigerator that orders groceries
The ability to provide trusted identity data when needed, then immediately remove it and provide it again later, helps people protect the privacy of their personal information. It also helps organizations comply with privacy laws, such as the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA).
For an identity protocol to be effective, it must be easy for developers to use and integrate. For unified identity solutions to be successful, they must be easy for any entity to adopt and integrate, whether that entity is a retailer, bank, government agency, or other organization. The protocol must also be usable by many different types of devices so they can act as economic agents.
Without this widespread adoption, it is just a technology stack. The creation of the Tangle EE Working Group and the Unified Identity project have allowed the group to build a well-governed, vendor-neutral community to enhance the protocol, stimulate adoption, and encourage its ubiquitous use.
At this point, the IOTA Foundation has developed an experimental version of the Unified Identity protocol and expects to have a demo platform for developers to experiment with in the coming months. It will likely take some time to reach production-quality, but growing the community will help considerably.
We welcome all developers and organizations that are interested in contributing to the protocol to join the community. We’re also very interested in hearing about organizations’ requirements and the types of user experience they will be looking for when they incorporate the technology into their processes.
Eclipse Tangle Marketplaces Project: Decentralized, Peer-To-Peer Transactions
Virtual marketplaces exist today, but with a centralized structure where the marketplace provider acts as the intermediary between those using the platform. These marketplaces are primarily designed to bring supply and demand together and coordinate price building. They are typically operated by major market players, and are almost never open to competing organizations in the industry they serve.
The Eclipse Tangle Marketplaces project is unique in that it builds on the base Tangle protocol to allow developers to build decentralized marketplaces where people, organizations, and machines can negotiate with one another for specific services and payment for those services. There is no central authority that assumes a superior position over other marketplace participants and manages fee exchanges.
All marketplace members are of equal rank and have equal rights. All financial transactions are trustless, permissionless, and peer-to-peer. They’re also feeless, which is extremely important in marketplaces where large numbers of transactions are required. Even non-payments can be made with no need for an intermediary of any kind (Figure 2). The Eclipse Unified Identity protocol provides the trust layer that is needed for market participants to make financial arrangements and sign contracts with one another.
Figure 2: A Decentralized Marketplace Eliminates the Middleman
There are numerous use cases for decentralized marketplaces across industries.
In a smart city, a streetlight that needs repair could negotiate with several repair technicians, choose the technician that offers the lowest price or the best economies of scale, then establish a contract with that person to complete the work. Or a self-driving car could negotiate requests for transportation and the associated payments in a decentralized Uber-type model.
Organizations and individuals can also use the technology to negotiate services and make payments. For example, a company in the energy sector might negotiate with the residents in a particular neighborhood to purchase their power data. Similarly, a municipality might negotiate with vehicles to purchase their data to better understand traffic flows.
There are also numerous Industry 4.0 applications. For example, in the automotive industry, manufacturing facilities could negotiate with each other to buy and sell the car parts needed to fill specific orders from car dealerships.
Today, there are almost no standards for developing decentralized marketplaces. That means innovation itself is the single biggest technical hurdle we face in advancing the technology. It also means developers that join the community have an opportunity to help define the de facto standard for decentralized marketplaces. Everyone who is interested in this challenging, but exciting, opportunity is welcome to join us.
Expanding the Tangle: Calling All Eclipse IoT Developers
With the relationship between the Tangle and IoT, we believe there are many opportunities to collaborate with the Eclipse IoT community. We encourage everyone involved in Eclipse IoT projects to learn more about how the Unified Identity and Tangle Marketplaces projects can bring identity verification, negotiation, and payment capabilities to their applications.
Once the Unified Identity and Tangle Marketplaces projects are more mature, we also see the potential to create new Tangle EE projects at the Eclipse Foundation, for example, to focus on DLT solutions for specific industries or applications.
- For additional information about our goals, visit the Tangle EE Working Group website.
- For IOTA documentation, visit docs.iota.org.
- For an introduction to the world of digital identity, read the white paper.
- For Tangle Marketplaces project documentation and a demo, visit industry.iota.org.
- Contact us directly at firstname.lastname@example.org.
*This article was written with contributions from Jelle Millenaar, Jan Pauseback, Alexander Belyaev, Alex Westerhof, Charlie Varley, Daniel Yvetot, Cara Harbor, and Thabang Mashologu.