Helge Michael, Commerzbank and Florian Drewes, KI Decentralized present on BizDay at CordaCon 2019.

1. Truck Wallet
Daimler
Florian Drewes - KI decentralized
Helge Michael – main incubator
CordaCon London | 23 - 24 OCT 2019

2. The Goal
Leveraging the business opportunities of
our customers by increasing the
capabilities of our products
The Vision
The Truck as economic agent
The Concept
Truck ID as enabler for various services
developed on a truck Wallet platform
The Project
Building a platform for an Automated
Truck Interaction Ledger Architecture
(ATILA)
Where we started
OCT19
The Truck Wallet as
core element
Authenticates
transactions
& payments
Validates
and stores
data
Enables
secure
M2M
contracts

3. ATILA consists of four major pillars
OCT19
ATILA (Automated Truck Interaction Ledger Architecture)
Pay
Conduct DLT driven m2m
payments via ID based
Wallet
ID
Enable the truck to
identify itself to other
machines and business
partners
Daimler Trucks
R&D
ID concept (via
certificates) and
communication protocols
implemented in CTP unit
Anti Fraud
Utilize Truck ID
functionalities to prevent
fraudulent activities
ID based fraud prevention
concept (via digital
signature and m2m
communication)
developed and ready to be
implemented
Charge
Implement ID and
business logic to allow
truck to negotiate with
other entities and fulfil
own needs
Business communication
logic between Truck and
Charging Station
established and tested
DLT network created,
Payments between
network participants
(utilizing Wallet
functionalities) are
running
ATILAPartnerDeliverable

4. Truck Wallet
OCT19

5. Machines paying machines on DLT – a pilot
conducted with Daimler Trucks
OCT19
Background
1 Source: Machina Research, as cited by Bosch SI; Daimler
Machine-to-Machine payment pilot, August 2019
• Machine2machine economy rising
with expected 14 bn connected
devices and revenue volume of 600
bn USD in 20221
• (Autonomous) transactions between
machines need a suitable payment
method:
 Immediate, finality
 Condition-based execution
 Low cost, no intermediary
• Current payments methods do not
entirely meet these requirements
• Cryptocurrencies often inappropriate
for payments, e.g. high volatility
Exchange of IDs,
fueling vs. payment
&
built on

6. Our solution issues e-money fully automated and
is directly linked to the customers bank account
OCT19
› Corporate A transfers EUR to internal
Commerzbank (CBK) Account
› CBK monitors fiat money transfers via
Banking API
› CBK issues eMoney to Corporate A‘s DL balance
› Corporate A and B conduct transactions using
eMoney, Corporate B holds eMoney after
transactions
› Corporate B transfers eMoney to CBK DL
balance for redemption
› CBK redeems eMoney
› CBK transfers EUR to Corporate B‘s CBK account
› Each transaction is signed and recorded by
Commerzbank
1
2
3
4
5
6
7
8
Distributed
Ledger
Internal
Account
Distributed
Ledger
Balance
Distributed
Ledger
Balance
Distributed
Ledger
Balance
Commerz
- bank
Account
Commerz
- bank
Account

7. OCT19
Commerzbank dashboard for e-money

8. Due to technical limitations nodes and keys were
hosted outside the truck
OCT19
Device nodes combined with one multi account full node
Current solution
Preferred solution

9. OCT19
What is e-money
› Electronic money (e-money) is a digital alternative to
cash. It allows users to make cashless payments with
money stored on a card or a phone, or over the
internet (definition by the ECB)
› E-money is programmable fiat money on blockchains
› The e-money directive (EMD) sets out the rules for the
business practices and supervision of e-
money institutions.
In our Pilot
› Commerzbank
issued e-money as
cash states on Corda
› The cash states have
represented claims
against
Commerzbank
A lot of institutions have introduced
stablecoins in the past, we are using e-money

10. Taxonomy of stablecoins -
Stablecoins are digital token that have been designed to
minimize price volatility against Fiat currencies
OCT19
Fiat Backed Crypto Backed Algorithmic Backed Our E-Money solution
• Backed by Fiat currencies
that are held as collateral
in an escrow account
• Value is based on the
value of the backing
currency or asset
• Example: Tether, Gemini
Dollar
• Backed by cryptocurrencies that
are held as collateral in smart
contract escrow accounts
• Often combined with dynamic
adjustments on collateral side
• Example: DAI (Maker)
• Employ a set of rules expressed
in software code that attempt to
match the supply and demand
of the stablecoin
• Example: (Basis), Fragments
• Represents a legally
enforceable right against
the issuer and is
redeemable at any time
• Widely useable for
making payments
• Example: Monerium
✗ Stability depending on
escrow account solution
✗ Compliance risk due to
unknown recipients in
public blockchains
✗ Taxes: May generate
taxable income
✗ Unclear accounting
principles
✗ Stability linked to crypto expos.
✗ Market risk: natural target for
gaming/shorting
✗ Compliance risk due to
unknown recipients in public
blockchains
✗ Taxes: May generate taxable
income
✗ Technical risk: Assets can get
lost due to programming issues
✗ Unclear accounting principles
✗ Stability not yet proven
✗ Market risk: natural target for
gaming/shorting
✗ Compliance risk due to
unknown recipients
✗ Taxes: May generate taxable
income
✗ Technical risk: Assets can get
lost due to programming issues
✗ Unclear accounting principles
Stability: Default risk
against the issuer
✓ Fully compliant with all
legal requirements
✓ No special tax treatment
✓ Clear accounting
principles
DefinitionCharacteristics

11. Why does it make sense to use DLT technology
for IOT payments?
OCT19
SEPA
› Missing programmable (no
„smart contracts“) capabilities
› Missing delivery vs. payment
mechanism
› Media breakdowns in blockchain
applications
› No international interoperability
› Limited granularity when it comes
to microtransactions
Todays payment system are not suitable
for blockchain related use cases…
…and cash on ledger could help to
overcome several severe problems.
CASH ON LEDGER PAYMENTS
› Full programmability (smart
contracts)
› Allows for delivery vs. payment
transactions
› No media breakdowns in
blockchain applications
› World wide transactions possible
› (Fine granularity allows for
micropayments)
› Cash on ledger enables instant
settlement

12. Fulfillment of all regulatory requirements and easy
accounting within your balance sheet – legally our
solution offers e-money
OCT19
Commerzbank ensures that all parties within
the network fulfil all KYC requirements with
respect to AML
Commerzbank holds all required licences to
issue cash on ledger
Solution covers all legal and regulatory
requirements - covered by legal opinions
from reputable law firms
Legally our solution offers e-money that can
be easily accounted within your balance
sheet
Accounting
Licences
Permissioned Network
Compliance

13. Findings regarding
M2M Economy + Corda

14. Hardware Load Analysis Results
OCT19
Δ26 MB (+7.96%)
Δ0.5 (+50%)
Hardware load requirements for Atila Cordapp:
~26 MB RAM, ~50% of system resources for ~ 1 minute

15. Transaction Stress test results
OCT19
In chosen stress scenario (1 tx/minute), Postgres is stable, reducing transaction size by 96.3% vs. H2
But: Transaction size is still 30-60x higher than e.g. bitcoin transaction size.
Suitable scaling for M2M payments to be further optimized within Corda.

16. CCC – Findings: CORDA(1)
OCT19
● Corda software overall in a solid development state
● Developer-friendly documentation, compared to e.g. Hyperledger fabric
● Generic benefits of permissioned blockchains:
○ transaction finality, control of network load.
● H2 database is suitable only for very small sample applications but not sufficient
even for PoC -> essentially for development only, switch to Postgres was an
improvement
● Confidential identities are not fully matured
● Corda nodes can still only manage one identity

17. CCC – Findings: CORDA(2)
OCT19
● Full node size requirements (Memory: 2-4GB) too high - prohibits IoT
applications
○ light client „Device Nodes“ needed -> concept of external signing
○ roadmap and size requirements unclear
● Production-readiness for M2M-application not there yet and not "around the
corner“
● Notary system remains unclear to some extent:
○ Scenario: several banks, collaborating on Corda Cash-on-Ledger but
competing for customers ensuring a network of notaries
○ More in depth notary structure was unchallenged in the PoC

18. The E-Money Issuer is available at R3’s marketplace
OCT19
More information on : https://marketplace.r3.com/solutions/emoney-
issuer?referrer=search

19. OCT19
Helge Michael
Florian Drewes