Published on 05/24/2017 | Technology
Understanding the Blockchain and IoT
The blockchain is a relatively new subject when it comes to the Internet of Things and is still in infancy. It can be viewed as disruptive technology to IoT as many a time one depends on a central governing cloud to be that authoritative source for critical information including trust needed by distributed devices. Blockchain can be seen a universal ledger. Many companies would rather leave it in obscurity than to embrace it, considering it requires a variety of pre-supposed knowledge that tends to discourage those who are not directly involved in its development. Yet, the Blockchain's emerging role in the evolution of the IoT makes it more important than ever to understand.
While businesses continue to shy away from the Blockchain, its relationship with the Internet of Things has proved a fruitful investment for overseas startups. However, there isn't much to that relationship except for the fact that it defines the participation of objects in transactions. While commercial, financial and organization transactions are made often by people or software on the computer, the Internet of Things gives objects the opportunity to directly participate in transactions. There are a multitude of uses for this, and still many being discovered, for example, the lock that opens if the right of way is acquitted, the package that validates ticket transaction when it arrives on the destination site, the Laundry machine that launches the command and the payment of the laundry when the tank is almost empty, the transition to a beacon that validates the passage of a security guard on site and in a time range, the electric heater subscribing to a contract tariff relief... The possibilities are endless.
Thus, the connected object entering the transaction extends the practical impact because it has a physical hold on the world. The most emblematic example is the blocking/unblocking the use of a leased object (Industrial assets, tool, camcorder ...) depending on the payment and the duration of use.
The target IoT vision assumes the objects connected to the Internet can communicate and make transactions with all other objects in the world. The decentralized and global aspects of the Blockchain fits perfectly with this universal vision of IoT. In the world of Industrial Internet of Things, Blockchain-powered industrial IoT networks will allow us to connect industrial assets — everything from shipping containers to power generation and distribution plants networks to gas turbine plants to MRI machines to sonograms and tamper proof. Gartner, Inc. forecasts that 6.4 billion connected things will be in use worldwide in 2016, up 30 percent from 2015, and will reach 20.8 billion by 2020. In 2016, 5.5 million new things will get connected every day. Current IoT clouds will be unable to scale and govern Industrial devices to meet this explosive growth.
Moreover, the need for small international transactions and peer-to-peer currency and mixing activities (rendering service, although exchanged) is very well supported by cryptocurrencies from the Blockchain. The marketing mix is particularly effective for lead solder and a simple transaction. A need for payment at the request / transaction and use flexibility also is taking a little more every day. The meeting of connected objects and Blockchain is a phenomenon whose scale is still widely underestimated.
We already know some of the applications of the Blockchain in matters of cryptology and currencies in particular with Bitcoins, the virtual currency. But as commercial or financial transactions are carried out by people via computer software based on a network architecture based servers, the combination of the Internet of Things and Blockchain could gradually give the connected objects the opportunity to participate directly in a variety of transactions in a tamper proof ecosystem where cybersecurity hackers rule.
Operation Blockchain
Blockchain is a decentralized system of exchanges based on trust and the result of a consensus of users and guarantees 3 functions:
We exchange through Blockchain documents, which instantly become public and unalterable as soon as they are sent over the network. This, therefore, allows a variety of interesting uses, from the sale of intellectual property rights (ascribe.io) to guarantee the trace-ability of diamonds (everledger.io).
Blockchain and connected objects
If the service platforms such as Uber, Kickstarter or Airbnb prospered quickly thanks to matchmaking, connected objects may well enjoy the Blockchain to establish a new model of decentralized operation, offering both new business models and a greater level of security.
If these include a connected lock, which would use the Blockchain to open only if the user is carrying the proper authorization or the dishwasher could recommend and automatically pay the consumable when the tank is empty. Obviously, the ultimate example in this area remains a remote clamping system capacity of a leased object to limit its use to the paid period.
Beyond the payment, connected objects are involved in the framework of exchange mechanisms and guarantees integrity. This is a key issue - especially for the general public.
Smart-contracts
Overall, the decentralized operation of blockchain allows both to create an 'informational doubled for many purposes but also to achieve set relationships. This is the role of Smart Contracts (concept Ethereum), a set of code snippets and execution protocols that react in a predefined manner in accordance with the conditions of its authors. Smart contracts are applications whose code is launched in the blockchain.
The Blockchain is an IoT platform
Blockchain is in no way an IoT platform. By studying the proposed functional mapping, it is clear that the Blockchain only covers some functions, especially in the field of transactional business processes. But some services can be rendered by Blockchains, such as storage, an example instantiation is Filecoin, the ability to record time-stamped events with Proof of existence.
With "smart contracts", automated equipment connected will regulate themselves their exchanges among themselves and with the outside world. Besides banking and finance, Blockchain prepares to remodel all sectors. In logistics, it will help "notarize" orders, grouping and unbundling of goods, their classification on the shelves warehouses and deliveries.
But more surprising is perhaps to see this technology similar to innovate the world of connected devices and the Internet of Things (IoT). Witness the alliance IBM and Samsung in the experimental project Adept (Autonomous Decentralized Peer-to-Peer Telemetry) that promises to revolutionize home automation. Officially unveiled at CES in Las Vegas in 2015, this project is based on three protocols:
BitTorrent for file sharing, Ethereum for smart and TeleHash contracts for mail post to post. Adept should serve as a common database with billions of connected devices that Samsung manufactures. A bit like a civil registry. Objective: To give an identity to these objects and start building a "democracy of equipment."
Indeed, these objects will exchange data independently with other household equipment through a decentralized electronic market place that they operate themselves.
Decentralized intelligence
Take the example of a washing machine. With Smart Contract, it will order the laundry to be delivered automatically in order not to be out of stock. One can imagine and organize a delegation of payment contractualized. The owner will of course be informed of each transaction. Similarly, according to the content of the contract, the machine could handle its maintenance by alerting the repair of worn parts to change.
Of course, it is the same for many facilities. However, Adept sees far beyond the supply and maintenance, albeit predictive. The Blockchain and vending contracts allow to establish a decentralized automation network where the different equipment of the house will pass transactions to orchestrate the power consumption priorities with the aim of reducing final energy consumption. All this can be done without a centralized intelligence.
Like today's connected objects including thermometers like Nest (Google), or Qivivo or Withings who solve heating and energy consumption of the house from an artificial intelligence in the cloud computing, IBM imagines hybrid systems between Blockchain and Internet of Things.
Lastly, Blockchain is increasingly popular in the financial/Bank industry, with banks all over the world are expected to make huge investments in the technology before the end of the decade. For it to be successful, both the regulatory and corporate side of the industry needs to address. However, it is time to transform the industry to look at Blockchain’s inherent built in security. The Blockchain is incredibly safe and secure and is a technological approach - a new type of datastore security that was never seen before, so it really challenges people to re-think cybersecurity. It is a wake up time for the industry to recognize and get on the bandwagon and appreciate the benefits and leverage the heck out of it.
This article was originally published on LinkedIn.
