EBSI – Building a Distributed Ledger Technology for Europe
The IOTA Foundation is One of Seven Contractors Selected to Design Innovative DLT Solutions for Pan-European Blockchain Services.
TL;DR:
The IOTA Foundation has been selected as one of seven projects from 30+ applications, to participate in the first phase of the EU blockchain pre-commercial procurement process. This aims to design new DLT solutions to improve the scalability, energy efficiency and security of EBSI, a network of blockchain nodes across Europe. If selected for the next phase, IOTA could be one of the technologies that will be developed and tested with core European services.
What is EBSI?
The digitization of public services across the European Union has taken a substantial leap forward with EBSI, the European Blockchain Services Infrastructure, which wants to be a blockchain for Europe. The IOTA Foundation – the non-profit organization behind the Tangle, an open-source, scalable, feeless, and permissionless distributed ledger technology (DLT) – is participating in the EU blockchain pre-commercial procurement that is piloting new solutions that could help improve future evolutions of EBSI.
Started in 2019 by the European Blockchain Partnership, the EBSI aims to develop a network of nodes across Europe to support cross-border services between governments, enterprises, and citizens (i.e. public administration). The idea is to improve the efficiency and trust of EU-wide transactions, enhance the mobility of citizens, enterprises,and goods, and reduce Europe’s environmental impact in a way that complies with EU regulations and encourages the growth of tech hubs and projects.
The network’s nodes are run on the European level by the European Commission and on a national level by member countries of the European Blockchain Partnership. Planned use cases range from the digital management of educational credentials, the establishment of trusted digital audit trails and document traceability, SME financing, data sharing among authorities, and digital identification. Read more about the current version of EBSI and its use cases here.
For future EBSI evolutions, there has been a thorough pre-commercial procurement process to find new DLT-based solutions for more scalable, high-velocity, high-volume cross-border blockchain services. The aim is that such type of novel solutions can provide the future evolution of EBSI with new capabilities for improved speed, transaction volume, environmental sustainability, scalability and security.
Tender process
The IOTA Foundation, together with its subcontracted partner Software AG, participated in the tender process for the pre-commercial procurement, announced in November 2020. The procurement funds innovative players in the blockchain/DLT market to research and develop new technologies and solutions for the enhanced EBSI core and application infrastructure. Around 6.2 million euros is released in phases across the duration of the pre-commercial procurement, with applicants completing all phases expected to receive an average of 1.6 million euros for their services.
Taking place in distinct phases over close to two years, the pre-commercial procurement awards contracts to competing parties to develop specific innovations and adapt them when needed in order to satisfy technical requirements set up by the EU. The PCP procurement process will select those solutions that offer the best value for money and best meet the project requirements.
Of the over 30 applications submitted to the tender process, seven projects have been selected for the first design phase of the pre-commercial procurement process, including the IOTA Foundation. After three months, it is expected around four of the seven projects will be selected for phase two, which will last for six months; it is in this phase that new technologies and applications will be prototyped with the appropriate data sets and tools. After that, around two projects will be chosen for the final, 12-month phase where the capabilities of the newly developed infrastructure and applications (such as digital product passports or intellectual property rights management cases) will be tested.
Why IOTA?
IOTA is the ideal technology to build upon the massive infrastructure planned by EBSI and support the vision of ledger-based secure transactions for an EU digital single market. In particular, IOTA technology answers EBSI’s stated goals of being scalable, open, decentralized, and interoperable. It is permissionless by nature, but can support permissioned environments (using the IOTA Smart Contract Platform), and can grant permission to resources and control data distribution to comply with EU regulations for data sharing. The network needs to support high-throughput and a large number of nodes, and each Member State should be able to run its own code or set of nodes. As an open, feeless, and scalable distributed ledger, designed to support frictionless data and value transfer, IOTA meets these requirements.
The Tangle – IOTA’s answer to the blockchain – is inherently scalable, decentralized, and built on open software. IOTA’s feeless nature also makes micropayments possible and opens up the network to a broader potential audience. Anyone can afford to use it, whereas the cost of transactions on other blockchains makes transferring small values (for example, the cost of stamping a single document) prohibitive.
IOTA’s green credentials – no miners working on Proof of Work means much less energy spent in comparison to other blockchains – is another driver of scalability, and complements the European Green Deal, the EU’s overarching aim of making Europe climate neutral in 2050. IOTA also aims to support data sharding, whereby only a portion of the network handles transactions.
IOTA Foundation is offering its advanced core technology, packaging it with additional solutions required for integration into the EBSI infrastructure. These include second-layer interoperability and third-layer provisioning. For the latter, IOTA Foundation has joined forces with Software AG, which will take care of system integration during the procurement phases, future provisioning, and potential exploitation of the associated services.
Next steps
The challenge of delivering a DLT infrastructure for the European single market is one that the IOTA Foundation is ready to take on. The potential to extend the infrastructure to states outside the 27 member states is also an exciting motivation for the Foundation.
To keep up to date with the latest developments in the EBSI space, visit the EBSI homepage on the European Commission website, or follow the Twitter channel of the Connecting Europe Facility @Connecting_EU.