Up until recently, blockchain and other distributed ledger technologies (DLTs) have largely been unsuited to meet the varying requirements of businesses and governments. This has been in large part due to a lack of scalability, security, privacy, regulatory compliance, and energy efficiency.
Another huge barrier to government adoption of blockchain has been the technology’s image problem. For many people, the word “blockchain” is most closely associated with cryptocurrency. But cryptocurrencies are often associated with negative things like fraud, the backing of criminal activities, large carbon footprints, and massive price volatility — this bad reputation has largely been inherited by all things DLT.
Of course, the potential of DLTs impact extends far beyond cryptocurrencies. Indeed, it was this potential that first motivated iov42’s founders to look beyond the crypto craze and leverage the best principles of blockchain to create a trust-building platform that can revolutionize how people, organisations, and governments interact.
iov42’s technology is permissioned. Unlike public blockchains like Bitcoin or Ethereum, where basically anybody can join and fully participate, permissioned blockchains control who can join the network, and, often, what they can do. More specifically, the architecture of the iov42 platform is built around localised, permissioned networks called “zones,” and each zone comprises a small number of known data centre nodes, or network participants. The node operators of a given zone are all known to each other and jointly agree on who can operate nodes in their zone, i.e. they need permission to join a zone. If necessary, nodes can also be removed from the zone. This is a critical feature for public sector applications since governments will need to have strict oversight of who can participate in a network and what they are allowed to do.
For example, in a public sector setting, you could imagine a region’s “education zone” being operated by the local Department of Education, the public university, and a telecommunications provider, who all provide the data centre infrastructure for the area’s digital education needs, from record-keeping to e-learning.
Furthermore, all of the zone’s data, including transactions, remain secured within the zone. This enables the nodes to comply with any relevant data locality regulations, like GDPR.
Dynamic Regulatory Compliance
The advantage of iov42’s zoned approach is that since you can control where a zone is deployed, you can also control the zone’s governance and enforcement of regulation. This is important since policies, rules, and regulations can vary across geographic regions.
For example, let’s say a country has a policy that states only permanent residents are allowed to buy property. The relevant zone(s) would enforce this regulation by only approving real estate transactions that come from individuals who have an endorsed claim of permanent residency. The transaction, as well as the individual’s ability to claim residency and have it endorsed by the appropriate third party (e.g. Passport Office), can all be handled in the iov42 platform.
Enabling scalable solutions has always been a key goal of the iov42 platform. We support scalability in several ways. First, because the network’s node operators are data centres, the platform can leverage the centres’ standard technologies (i.e. containerisation technologies) that enable scalability.
Second, iov42’s consensus mechanism is a custom Proof of Authority approach designed specifically to balance performance with energy efficiency. This novel mechanism allows the platform to handle transactions as they are sent to the platform, eliminating the issue of network latency seen with more traditional blockchains, where users have to wait for an entire “block” of transactions to be generated before their transaction goes through.
Eventually, the zones that make up the iov42 platform will be able to perform “interzone” communication. This will facilitate trusted interactions between users of different zones, whether they are different ministries within a government or related industries across different countries. This will open up the delivery and scalability of cross-department and cross-border services, products, and marketplaces.
An iov42 identity is required to perform most operations on the platform. More specifically, each platform user has a unique identifier and the ability to make relevant claims about their identity. When these claims, such as “I work at iov42” are endorsed by a reputable third party, which in this case could be iov42 or a relevant tax authority, the trustworthiness of that identity increases.
All relevant public sector actors, enterprises, and citizens interacting with a government application built on the iov42 platform would have unique digital identities. This guarantees accountability for every actor, the actions they carry out, and the services they deliver and access.
A particularly unique feature of iov42’s platform is our support of delegated identities. Delegate modelling facilitates the delegation of authority to perform pre-approved duties throughout an organisation. This delegation, paired with a powerful permissioning model provides data security and granular control of data accessibility, while streamlining the overall efficiency of the organisation.
As mentioned earlier, iov42’s consensus mechanism has been designed specifically to balance performance with energy efficiency. Unlike energy-intensive Proof of Work, which is most commonly associated with Bitcoin, Proof of Authority does not require significant computational resources to be wasted.
Furthermore, the limited number of nodes in a zone architecture reduces the duplication of resources such as computing, network, and storage and allows flexibility in terms of optimizing the use of these resources as needed.
Finally, because our platform runs its workloads using standard technologies (i.e. Java Virtual Machine), we have the potential to make use of even more energy-efficient technologies, such as Advanced RISC Machine (ARM)-based processors.
This continual commitment to finding the optimal balance between sustainability and performance is significant for governments, which have to meet various sustainability, energy security, and quality assurance requirements.
In a departure from conventional blockchain models, the iov42 platform does not have a token. This means that the platform can represent any physical or digital asset on the platform with no need to be tied to an underlying token. As such, our platform is not affected by the extreme price volatility that is experienced by other networks that are tied to a token.
Consequently, we can offer our clients predictable pricing models, including fixed price licenses, or per-transaction subscriptions to control expenses.
Reliable pricing is advantageous for governments and other organisations for whom budget is one of the most important factors when procuring goods and services. It also aligns with the longer-term planning cycles of public sector projects.
The suitability of iov42’s technology for government applications is being put to the ultimate test as we work on the EU blockchain pre-commercial procurement (PCP), which aims to extend and enhance the European Blockchain Services Infrastructure. iov42 was selected as one of seven tenderers to participate in Phase 1 of this project, focusing on how the improvements to the infrastructure can best take shape. iov42 is confident that we will make it to the remaining two Phases of the project, which are dedicated to developing and testing specific use cases that will create impact for EBSI, the European Commission, European citizens and, hopefully, the world.