While the crypto world is getting huge attention worldwide, one would almost forget the promising technology behind it: blockchain or more generally named distributed ledger technology (DLT).
There are many projects ongoing using blockchain technology in various areas. One of these promising blockchain-based projects that was in the news recently is the European Blockchain Services Infrastructure (EBSI). By creating this infrastructure the European
Commission aims to deliver a host of cross-border digital public services, ‘for the benefit of citizens, society and the economy’.
How will EBSI look like, where are we now, what may we expect and what is the way forward?
European Blockchain Partnership (EBP)
Three years ago, in 2018, the European Commission, EU Member States and some countries of the European Economic Area (Norway and Liechtenstein) joined forces to form the European Blockchain Partnership (EBP). They thereby committed to working together towards
turning the enormous potential of blockchain technology and cooperate in the delivery of a host of cross-border digital public services. For that purpose they created the European Blockchain Services Infrastructure (EBSI).
The member states also wanted to involve companies, academia and the blockchain community in their decision-making. The main institutions responsible for this dialogue are the European Union Blockchain Observatory and Forum as well as the International Association
of Trusted Blockchain Applications (INATBA).
European Blockchain Services Infrastructure (EBSI)
EBSI, is a so-called ‘flagship project’ from the European Commission. It is the first EU-wide blockchain infrastructure being created in an effort to make public services more trustworthy and accessible by European citizens. EBSI is designed with a
number of core principles in mind: working towards the public good; transparent governance; data compatibility; open-source software; and, compliance with relevant EU regulations such as the GDPR and eIDAS.
EBSI would provide a common, shared and open public infrastructure aimed at providing and supporting a secure and interoperable ecosystem that will enable the development, launch and operation of EU-wide cross-border digital services in the public sector.
The infrastructure will reflect European values data sovereignty and green credentials in mind and tackle global issues – such as climate change and supply chain corruption.
EBSI would thereby deliver public services with high requirements of scalability and throughput, interoperability, robustness, and continuity of the service and with the highest standards of security and privacy that will allow public administrations and their
ecosystems to verify information and make services trustworthy. This infrastructure should be deployed within a period of 3 years.
EBSI is built as a "public permissioned" blockchain where network nodes will be managed by the European Commission with the 27-EU members, and by individual members of the European Blockchain Partnership within individual regions. Up until now, the EBSI
peer-to-peer network consists of 36 peers (live production nodes) and 11 more are in the setup phase.
Access will be publicly allowed to the private sector and civil society for the set of data and information that are aimed at such players. Other data access may be reserved exclusively to government bodies in order to support cross-border services.
The infrastructure builds out – from concept to completion – will take place over the next three to five years. During this period the European Blockchain Partnership aims to scale-up the investment fund to a fully developed investment platform with funding
of €1-2 bn.
The infrastructure will be made up of different layers including
- a base layer containing the basic infrastructure, connectivity, the blockchain and necessary storage;
- a core services layer that will enable all EBSI-based use cases and applications;
- additional layers dedicated to use cases and specific applications.
It will allow public organisations to develop applications that connect to and make use of the EBSI infrastructure. Eventually, it will be extended to private organisations. Upon completion, EBSI aspires to be facilitating up to 15 billion transactions per
minute, a world-first for blockchain technology.
Selected EBSI use cases
EBSI will be a multi-blockchain network with multiple use-cases. In order to deploy cross-border blockchain services across Europe as soon as possible, ongoing EBSI work performed by the EBP is currently focusing mainly on specific use cases that can be implemented
relatively easily by using existing blockchain technology, and then expanding them over time.
The EBSI initiative has initially been focused on four particular use cases to start with: The European Self-Sovereign Identity Framework (ESSIF), Notarisation of documents, Certification of diplomas, and Trusted data sharing.
The European Self-Sovereign Identity Framework (ESSIF)
The EU Commission presented a framework for the introduction of European Digital Identity, named ESSIF. This European Framework is seen as the cornerstone part of EBSI, and follows the European Commission announcement of a trusted, secure and decentralised
Digital Identity for all Europeans.
This proposed framework essentially represents an interoperable European digital ID produced by Member States, which will be linked to national digital identifications. The European-wide digital ID, aims to give EU citizens access to the same services, regardless
of which member state they are in.
Thanks to the Self-Sovereign Identity (SSI), citizens will no longer have to physically visit places to collect personal credentials and verified statements (e.g. to a medical specialist or a municipality office). ESSIF will allow users to manage personal
and sensitive data on a very granular way. Users may create, control and use their own digital identity (data) across the EU, without relying on centralised authorities, and enabling for compliance with the eIDAS regulatory framework.
Ultimately, the framework protects citizens’ privacy, improves digital trust, and facilitates the secure sharing of data between people and governments. Using such a framework will also streamline data exchange with governments, providing the latter with validated
statements from organizations, such as banks, utility companies, or telecom operators.
EBSI Digital wallet
ESSIF will include digital identity wallets, enabling citizens to prove their identity and share electronic documents. The wallets will hold citizens’ digital identities. This not only includes digital IDs, but also digital signatures, public administrative
tasks, and private sector uses like accessing spaces or e-Seals – legally valid electronic seals or signatures associated with a legal entity. Users can choose which aspects of their data they want to share with third parties, and keep track of what has been
shared where. This makes these processes more efficient, as they all exist in one place. The main benefit of housing these functions in a digital wallet, though, is that they are all verifiable and trustworthy thanks to the wallet.
eSSIF Lab Project
eSSIF-Lab is a project funded by the European Commission that started on 1 November 2018. It is an ecosystem of parties that work together to make existing (and new) Self-Sovereign Identity (SSI) technology into a scalable and interoperable infrastructure
that businesses can use very easily for conducting (business) transactions with other businesses and individuals alike. It aims to advance the broad uptake of SSI as a next generation, open and trusted digital identity solution for faster and safer electronic
transactions via the Internet, as well as in real life.
In this project, €5,6 mio EU funds will be made available to European innovators including academic research groups, SME’s and start-ups that want to build or improve or create a range of interoperable, open-source SSI components that will be used within Europe
and possibly world-wide.
Notarisation of documents
Another selected use case is notarisation of documents. The power of blockchain will be leveraged to create trusted digital audit trails in notarisation and document traceability, automate compliance checks in time-sensitive processes and prove data integrity.
The service will allow users to register digital documents and transactions on a digital ledger, verify their authenticity and create historical trails, record and link together digital evidence of files, using digital signatures and evidence in a GDPR (General
Data Protection Regulation)-safe way. Timestamps will make it easy to follow the document’s history – all actions and interactions over (digital) papers.
Certification of diplomas
The Diploma use case is meant to give Europeans more digital control of their educational certificates. The digital management of educational credentials may significantly reduce verification costs and improve trust in documents’ authenticity. The University
of Lile recently stated that it will use EBSI to deploy diplomas for all of its graduates. In Germany, the Government is leading a likewise project in the Diploma domain, including 130 schools. And in Spain, three universities will start issuing of digital
diplomas. Students will thereby authenticate themselves using a digital ID that will be issued by FNMT (the Royal Mint of Spain) and stored in their mobile wallets.
Trusted Data Sharing
Blockchain technology should also be leveraged to securely share data amongst authorities in the EU, especially between cross border business, starting with the IOSS VAT identification numbers and import one-stop-shops, amongst customs and tax authorities
in the EU.
Other use cases
The EBP is also working on additional use cases that will be added to EBSI in future steps. These include:
- the social security passport, thereby leveraging European social security numbers to facilitate cross border access to welfare services;
- the digital product passport in the context of the circular economy, which requires tracking and exploitation of the data for a wide range of different products, including their components and materials, during their life cycles;
- financing small and medium-sized enterprise (SME) through blockchain;
- and, facilitating the management of cross-border and cross-authority asylum demand processes.
Pre-Commercial Procurement process
To prepare for future capacities of EBSI and to support new types of use cases, the European Commission launched a Pre-Commercial Procurement (PCP) action in cooperation with and building on the work of EBP. Objective is to lead to the deployment of solutions
within the next three years.
The PCP was designed to challenge industry from the demand side to develop new innovative DLT-based solutions for public sector needs for more scalable, high-velocity, high-volume cross-border blockchain services. It provides a first customer reference that
enables companies to create a competitive advantage on the market. The blockchain PCP thereby focuses on the development and testing of a novel distributed ledger or blockchain solution which builds on the EU legal framework, in particular the GDPR Regulation,
the eIDAS Regulation and the NIS Directive.
Aim is to fill gaps in existing cross-border blockchain solutions to deliver more demanding cross-border blockchain services compliant with security, interoperability, robustness and sustainability. The European Commission has thereby clearly stated their
core requirements for the infrastructure and the use cases the EBSI should support.
Solutions should provide for the identification and characterisation of objects, their traceability, management and exploitation of data concerning them, automation of tasks (e.g. through smart contracts), exchanges with external solutions (e.g. IoT, AI algorithms)
through relevant interfaces, as well as enabling reward and incentive models to be exploited through tokenised approaches etc.
Call for tenders
In November 2020, the European Commission put out a call for tenders with the aim of implementing a Pre-Commercial Procurement (PCP). The call for tenders was open for interested bidders to submit offers until 28 January 2021.
In July seven contractors out of 30+ blockchain focused projects have been selected by the EU for participating in the first phase of the EU blockchain Pre-Commercial Procurement process to support the early-stage innovation of a European blockchain venture.
Companies were selected based on their ability to provide scalability, throughput, interoperability, security, energy efficiency, and robustness.
The seven companies include:
- IOTA Stiftung
- IOV42 Ltd
- Stichting Dyne.org, Infocert Spa, RIDDLE&CODE Gmbh
- Orange Business Belgium SA
- Chromaway AB
- Billon Spolka Z Ograniczona Odpowiedzialnoscia
- Westpole Belgium, Net Service Spa, Flosslab s.r.l
IOTA will especially focuses on 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, while Iov42 specialises
on the development of digital identity solutions. For the initial phase of EBSI’s procurement, the consortium proposes a revolutionary solution for a European Digital Product Passport. Billon is focusing on Intellectual Property
Complex Rights Management, Accountment & Trading Platform, and; Digital Product Passport & the Circular Economy
The PCP is taking place in distinct phases over close to two years. The timeline for the PCP is as follows:
- Phase 1 (solution design): Launched on 19 July 2021 for a duration of 3 months
- Phase 2A (prototype development and lab testing): Will start 1 to 2 months after phase 1 for a duration of 6 months
- Phase 2B (further solution development/finalisation and field testing): Will start in continuity of the phase 2A for a duration of 12 months
All seven candidates will participate in the first phase of the EU blockchain Pre-Commercial Procurement process piloting new solutions that could help improve future evolutions of EBSI, with the field of being gradually narrowed down over the course of
In the first design phase new technologies and applications will be prototyped with the appropriate data sets and tools. The PCB will thereby
fund innovative players in the blockchain/DLT market for an estimated 6.2 million euros to compete parties research and develop specific innovations, new technologies and solutions for the enhanced EBSI core and application infrastructure.
After the first year of rigorous testing across a variety of applications, depending on the quality/price of the offers that will be received for Phase 2 of the PCP, it is envisaged that, out of the 7 Phase 1 contractors, around 4 contractors will continue
to the second phase (Phase 2A) and around two projects will be chosen to compete in the last phase (Phase 2B), where the capabilities of the newly developed infrastructure and applications (e.g. digital product passport, IPR management cases) will be tested.
The PCP procurement process will finally select those solutions that offer the best value for money and best meet the project requirements. Successful completion of all phases throughout the two-year period will be rewarded with a service fee of 1.6 million
euros and be chosen as the single project to deliver the European Commission's DLT infrastructure.
EBSI and the way forward
EBSI is getting growing attention. And as the European Blockchain Service Infrastructure grows in size and significance, new pilots are being deployed.
EBSI gives a great opportunity for the state administration in the EU to accelerate the digitization of public services. Government entities may provide reliable and trustworthy electronic services, and completely digitize paper documents, including the
processes related to collecting, storing, and managing them.
EBSI will also enable them to rethink their information systems, to promote user trust and the protection of personal data, to help create new business opportunities and to establish new areas of leadership, benefiting citizens, public services and companies.
When completed, the EBSI will enable public administrations to protect against fraud, help businesses to alleviate administrative costs and mean citizens can take control of their personal data.
Moreover, once EBSI is in full production, it should soon be interoperable with private sector platforms, so private companies and organisations will be able to join EBSI as a utility. This should, among other things, open up significant opportunities for cost
savings and efficiencies in interactions and transactions between the public and private sectors.