Hyperloop will run on Blockchain instead of Rails: Tokenization of the Ticketing System.

Introduction to Hyperloop

Hyperloop refers the idea of a highly innovative mode of passengers and/or freight transportation, which has first proposed by Elon Musk and then rendered in a vactrain design released by a joint team from Tesla and SpaceX. In particular, a hyperloop is a sealed tube or system of tubes through which a pod may travel free of air resistance or friction (hence “vactrain”, i.e. vacuum tube train), propelling people or objects at extremely high speed. The Hyperloop Alpha, called Genesis, was able to run a 350-mile (560 km) route at a speed of 760 mph (1,200 km/h), allowing for a travel time of just 35 minutes, which is considerably faster than current rail or air travel times.

The Hyperloop concept has been explicitly “open-sourced” by Elon Musk and SpaceX, thus encouraging others to work on their inputs on the project.

There are many companies right now competing to become the leader in the space. Though there have been some concerns before on seemingly deceiving claims made by some of the contenders, like certain media statements that can be found about Hyperloop Transportation Technologies (a.k.a. HTT), at least one contender, such as Hyperloop One, is already laying down tracks for the implementation of the system. Hyperloop One is even actively considering the integration of such system with other disruptive technologies, especially showing great interest towards blockchain and A.I., in order to enhance certain features of this futuristic – but not so far away in the future – way of conceiving public transportation.

Challenge

In the current state, for any means of public transportation, customers can get a ticket online, at a desk, at a ticket machine or by using a mobile app. Some of these tickets are personalized, some are anonymous. Some of these tickets are printed, some can be stored online, while the tickets bought via the app can most times also be stored right on the customer’s smartphone.

Furthermore, travellers may require to have access to a wide variety of additional services alongside a specific travel: local transport from or to the first station, catering provided both on and off the means of transportation, plus many individual businesses in the local surrounding of a station, like hotels, restaurants and taxi companies.

In order to eliminate fragmentation of the offering of services related to public transportation (tickets, vouchers, local transport, accommodation, local transportation networks) and to come up with an integrated ecosystem, thus enhancing customer experience and beating competition, a blockchain-based solution should be developed. This, of course, applies to Hyperloop, as well.

Ecosystem

Structural point of view

Hyperloop and all connected service providers would make up an ecosystem themselves. From a customer’s point of view, some actors in this ecosystem are already connected, while other players are not yet fully integrated, such as the surrounding services. A loose coupling of the involved players could be provided by vouchers offered by Hyperloop.

Technical point of view

An ecosystem is defined by data streams among different companies and their underlying IT systems. Some of these data streams may be defined and empowered by the offering of APIs on one or both sides of the connection. Other data streams may exist, but not yet be supported by an automated integration.

Tokenization

The method chosen to build an integrated ecosystem is tokenization, i.e. the transfer of participating values and assets into tokens that act like value representatives or vouchers with a specific sense in the ecosystem that is being created.

Tokens can be configured as transferable, partial, controllable and can be restricted in their use due to location, time or events.

It is worth remarking that, when tokenizing values and assets that can be part of that future ecosystem, Hyperloop can also check on possible transformations of existing value-based systems, such as any reward program where a customer can collect points for each ticket purchase.

Blockchain

Blockchain is the perfect technology to build tokenized ecosystems, for various reasons, among which:

• The value created on a blockchain can be personalized and shared within all actors while keeping the ecosystem decentralized;
• The concept of “trust-less trust”, itself part of the new paradigm introduced by blockchain technology, makes it easier for new participants to decide whether or not to become part of the ecosystem;
• The client can preliminarily evaluate and constantly monitor the real benefit of being part of a decentralized ecosystem, thus implicitly strengthening the whole ecosystem while also acting towards his/her own benefit (virtuous cycle).

Technically, the basic idea behind the integration of existing players into a new build “off-chain” is to represent all parts of a common “journey” by tokens on a blockchain, meaning single travels (or traveled miles), services, catering, hotel bookings, local transport or other assets that bring value to the overall journey made by a customer via Hyperloop, which can be saved in the customer’s personal wallet. The customer may then transfer these assets, wholly or partially, even selling them or giving them back to the issuer. The use of a specific asset is carried out by transferring the corresponding tokens from the customer’s wallet to those of the service provider.

Roles

• Hyperloop (issuing entity) defines new tokens to become part of the ecosystem, e.g. when a new provider is included.
• The provider can offer Hyperloop tokens for sale on a dedicated platform.
• The collector transfers tokens from users to providers, either automatically or through human intervention.
• The consumer uses the wallet to hold and monitor the balance of tokens.

Processes

• The initial sale of tokens (ICO/IEO)
• Collection of tokens
• Transfer of tokens
• Issuance of new tokens for new assets offered by new providers – These tokens can be organized in clusters (like travel, food or accommodation) and can be (independently) redeemed for their initial purpose and also be bought later to refill the personal balance. The type of token representing the services offered by any new provider could be issued by Hyperloop directly and be redeemed per driven mile in a long-distance Hyperloop journey (billing per mile model).
• Usage of tokenized assets

A big benefit is given in time-, location- or event-based conversions between different assets represented by the various types of Hyperloop tokens, like the case of:

• Suspension of a Hyperloop route: Option to convert “Distance Token X” to “Taxi Token Y”
• Train delay: Subsidized conversion of distance tokens to hotel tokens or subsidized supply of food vouchers
• Advertisement: Airdrop of vouchers for specific events at specific locations

These conversions could be offered automatically, based on specific parameters which would trigger the clauses programmed in a set of interdependent smart contracts.

Validation and Implementation

MVP

For each asset, a specific token is created, representing the balance of such asset, and, for each token, a reverse token is created, simulating the claim to this asset when the service is provided to the users. The aforementioned token is connected to a “duty”-token that blocks the recipient from refusing the claim.

All tokens are initially stored in wallets that are owned by Hyperloop, which acts as the central issuer.

Every purchased travel should lead to a wallet assigned to a specific user, holding the purchased and claimed tokens.

The API used for the simulation in the context of the MVP must support the following operations:

1. Booking a journey via mobile app and paying for it
2. Creating a wallet and purchasing tokens
3. Transferring tokens
4. Clearing

Evaluation

The outcome of the testing phase will not lead to a near-term implementation but will function as the basis to understand the potential of a specific use case of tokenization in the Hyperloop ecosystem.

Conclusions

Though building an open and integrated solution for Hyperloop is quite a challenge and additional demands may arise from regulators and consumer protection entities, blockchain-based tokenization can really help in getting one step closer to a real implementation of a first version of such 4.0 ecosystem for Hyperloop. On top of everything that has been said already, tokenization can expand company-wide insights to market-wide insights, build new distribution channels, affecting logistics, and markets, while enabling Hyperloop to better understand and know the customers and their wishes.

Eloisa Marchesoni.