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Japan: Tech Giants Hitachi, KDDI Trial Blockchain Biometrics Verification System for Retail

Tokyo-headquartered tech conglomerate Hitachi and telecoms giant KDDI are trialing a retail coupon settlement system that combines blockchain with biometrics, Cointelegraph Japan reports today, July 26.

This week, staff from the two firms are participating in an experimental demonstration at a KDDI store in Tokyo’s Shinjuku district, as well as a local donut shop.

The trial integrates Hitachi’s Hyperledger Fabric-powered platform with biometric verification technology and KDDI’s existing retail coupon system. Users will first register their biometric data and coupon credits at a KDDI store, and then proceed to settle their coupon transactions at the local donut shop, using only their fingerprints to validate the purchase.

As Hitachi explains in this week’s press release, unlike traditional biometric identification infrastructure, the trial solution encrypts the biometric data, which thereafter functions as part of a public key authentication system.

Users’ biometric data, coupon credits, and transaction histories are all encrypted and recorded on the blockchain. Selected retailers can then participate as nodes in the network, scanning consumer fingerprints in order to settle the transaction request.

Hitachi says it aspires to use the tamper-proof system to securely update consumers’ coupon balances across stores within the network simultaneously.

The notion of integrating blockchain with biometrics to create immutable and secure ID verification systems has been circulating for some time, with many advocating for its potential benefits. Crypto industry veteran and security systems expert Andreas M. Antonopoulos, however, expressed his skepticism as early as 2016, considering that:

“By embedding into a blockchain, the irrevocability of biometrics is added to the immutability of a blockchain which makes dealing with compromised biometrics even more difficult. [Moreover], while biometric registration may not reduce anonymity directly, it can be used to enhance statistical analysis of activity, so that the leak of a single identifier can destroy all privacy.”

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Hitachi Trials Blockchain to Settle Retail Payments Using Just Fingerprints

Japan-based tech conglomerate Hitachi and telecommunication giant KDDI are testing a blockchain-based system that can settle retail payments validated using shoppers’ fingerprints.

According to a release on Wednesday, a group of staff from the two partners are this week experimenting with a coupon settlement system deployed in a KDDI store in Tokyo’s Shinjuku district, as well as a local donut shop.

Built by Hitachi with technology from the Hyperledger Fabric platform, the blockchain system is integrated with Hitachi’s biometric verification and KDDI’s existing coupon system. It seeks to settle shoppers’ coupon transactions over a distributed network using their fingerprints as validators.

Hitachi explained that when shoppers sign up to use the system, they will register their coupon credits and biometric information, which are then encoded into a string of encrypted data and stored on the blockchain.

When initiating a transaction at a retail shop that accepts the coupons and participates in the blockchain as a node, shoppers will verify their identity with a fingerprint reading device that broadcasts the request to the network and the transaction is settled.

Hitachi said the end goal is to use a tamper-proof blockchain to assist in verifying users’ fingerprints and to keep their coupon usage information accurate and updated across stores within the network simultaneously.

“As a result, users can authenticate themselves by holding the finger on the authentication infrastructure, so it is not necessary to present a coupon at the store, and the coupon can be used even without a smartphone,” the company said in the release.

The project is the latest pilot test taken by Hitachi to utilize a blockchain platform in retail transactions. Last year, the company also announced it is developing a blockchain platform for supply chain businesses to manage orders and invoices on an immutable ledger.

Hitachi image via Shutterstock

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Hitachi and Mizuho Strike Deal for Blockchain Supply Chain

Mizuho Financial Group is partnering with tech conglomerate Hitachi to develop a blockchain platform for supply chain management.

Announced Thursday, the two companies have reportedly agreed to test a system built on technology from the open-source Hyperledger blockchain consortium to determine whether they can use an immutable ledger to record orders, invoices and otherwise collect data about company operations.

The ultimate goal, according to the firms, is to develop a record of every transaction that can be accessible by anyone in the company, thereby streamlining the process needed to order an item.

Right now, Hitachi’s process involves ordering an item, confirming the order, creating an invoice and approving the invoice. Due to technical limitations and reliability issues, however, this process does not always work as desired.

Hitachi intends to incorporate its Lumada Internet of Things platform into the test to aid its data collection efforts and continue to build commercial products.

Notably, this is not Mizuho’s first time testing a blockchain platform for the use case, as the firm recently completed a trade finance trial with several organizations. Other trials have included a rewards program and a research lab in the U.S.

Shipping containers image via Shutterstock

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