Deutsche Bahn invests in blockchain technology

When we talk about mobility, we spontaneously think of the car or the bicycle. But in an open ecosystem there are many more modes of transport and transportation. In the third part of the “Blockchain Applications in the Mobility Industry” series, we are initially looking at the rails. Digitalization is a political goal at Deutsche Bahn AG. The “Digital Rail” roadmap was created for this. Together with its IT service provider DB Systel GmbH, Deutsche Bahn is investing in blockchain technology. The “Digital Rail” campaign aims to show cross-industry AI solutions and possible uses of blockchain technology.


With blockchain technology into the digital ecosystem

Deutsche Bahn wants to create the Internet of Value with its pilot project through DB Systel and in cooperation with IBM. Deutsche Bahn invests in blockchain technology in order to be able to offer its customers all forms of mobility and providers under one digital account. Then every customer can switch from one mode of transport to the next in a fully organized manner. In addition, the billing of the participants is done internally, so that there is a high level of user convenience.

The various mobility providers are connected as independent service providers via the blockchain network and the customer can pay for his trip with just one transaction. The data for each transaction is controlled by smart contracts on the blockchain.

The decentralized network of distributed ledger technology takes over the processes such as revenue sharing and ticket validation. DB System GmbH is the digital partner of Deutsche Bahn and offers information and telecommunication services. The company describes the advantages of blockchain on its homepage as follows:

  •     Time savings by shortening transaction and synchronization times from four days to almost real time
  •     Cost savings by eliminating overhead and brokerage costs
  •     Risk minimization through a lower risk potential in relation to manipulation, fraud and cybercrime
  •     High acceptance through increased trust, based on the reliability through common processes and records

Mobility is an essential economic factor

We are currently feeling this particularly intensely. The mobility sector is facing drastic upheavals and the use of intermediaries is unnecessary due to blockchain technology. This will result in completely new business models and processes, especially when buying tickets. Smart contracts that run on the blockchain trigger actions. We have heard of cars that pay the toll on a toll road completely independently and autonomously.

A similar application is also conceivable for trains, which is why Deutsche Bahn is investing large sums in blockchain technology. The cryptographic technology offers efficient applications, particularly in the field of freight transport. The blockchains could be used as databases for shipment tracking, so that all goods can be automatically located at any time. That would be a huge relief for tax payments and deductions that are automatically paid for when entering or leaving a country.


Use of blockchain in an economic context

In after sales, complaint processing, sales and all other processes and areas in which extremely fast, inexpensive and less error-prone processes would be an advantage. The interaction of customers with Deutsche Bahn will also change. DB has already founded its own blockchain department since 2018, which, with around 30 employees, tests and evaluates the possible uses of the technology for the railways.

The first pilot projects dealt primarily with the billing of internal services. The team of software architects, engineers, project managers and developers is now testing application areas in the areas of ticketing, logistics supply chains, rail operations and prototypes.

A common ticket portal, a blockchain-based platform, is intended to enable travelers to bring bike, car and ride sharing providers under one roof in the future. Without digital limits through tariffs, transport associations and regional providers of local public transport. And there are already more than 400 of them and the number continues to grow. From the tram, the bus, the S-Bahn and the U-Bahn, the merger of companies primarily entails an increase in efficiency.

Liberalization has also resulted in a large number of new providers, such as Flixtrain. In order to be able to penetrate more deeply into the development of such highly complex interrelationships, DB must first be able to map the entire rail network as a digital twin in the blockchain.