Blockchain Internet of Things: Future is Now

Blockchain Internet of Things: Future is Now

Originally developed for Bitcoin (the digital currency that is now worth over $ 9 billion), blockchain has the potential to connect smart gadgets built by different vendors, secure their communication and improve IoT infrastructure management. Here’s why.

A brief introduction to the blockchain technology

Imagine a Google doc that can be edited and shared by multiple users within a network. The doc is not stored anywhere in particular, grows non-stop and cannot be tampered with. That is how the blockchain (or distributed ledger) technology works.

A typical blockchain network consists of nodes – that is, admin software that is automatically installed onto a computer once a user joins the network. While users create transactions, the nodes monitor their activities and make sure transactions have not been falsified.

The approach enables the Bitcoin community to verify users and manage payment transactions in a secure way. George Howard, Associate Professor at Brown University, claims 2017 will be a huge year for the blockchain technology – largely because of the growing adoption of IoT solutions.

An early example comes from Watson, the IBM supercomputer that once beat two of Jeopardy’s biggest champions and – according to R-Style Lab – is already 40% better at diagnosing cancer than most human doctors. Using the distributed ledger technology, the computer gathers temperature and location data from connected devices and verifies them as trusted parties.

3 ways blockchain impacts the Internet of Things

Gartner reckons there will be 20 billion things connected to the Internet by 2020. IoT helps companies get a better insight into employee and customer behavior, automate business processes and reduce operating costs. Yet, there are several issues, namely, the lack of security and interoperability standards that prevent the Internet of Things from going mainstream.

Last October Dyn, the US-based Internet performance management company that was later acquired by Oracle, faced a massive DDoS attack caused by the Mirai IoT botnet. The botnet in question was made up of malware-infected surveillance cameras, Wi-Fi routers and DVR players. The gadgets bombarded Dyn servers with traffic until they collapsed, bringing down several large websites including Netflix, Reddit, CNN and Twitter.

The attack revealed a problem that had been well-known to software developers and yet remained largely ignored: how are we going to manage, identify and secure billions of connected gadgets?

Currently you can authenticate and identify IoT devices through a cloud server. As the global IoT network continues to grow, such servers become potential bottlenecks and single points of failure. Remember what happened to Dyn?

The benefits of using blockchain in IoT app development include:

  • Increased security. Blockchain nodes can be injected into smart gadgets’ embedded systems, thus enabling devices to identify each other and share data with no interference from certification authorities. The technology also uses cryptographic algorithms which secure transactions and user data;
  • Reduced operating costs. Blockchain spells the inevitable death of the traditional server/client paradigm. Since businesses will no longer have to pay for cloud storage and data processing services, the Internet of Things solutions will become more affordable;
  • Greater IoT infrastructure scalability. Ok, the blockchain approach will help companies eliminate the major obstacles to IoT adoption. What does it mean for businesses? First and foremost, companies will be able to add new devices to the network, automate more tasks and improve overall performance.

Blockchain Internet of Things comes to life

  • Filament. Founded in 2012 as a home security startup, the company later focused on the industrial Internet of Things and received substantial funding (over $ 5 million) from Samsung and Verizon. Filament provides turnkey sensor solutions to healthcare organizations, farmers, utility and manufacturing companies. Their blockchain-powered autonomous sensor networks enable customers to monitor assets and collect data on equipment performance;
  • Telstra. Australia’s largest telecommunications company believes blockchain is the ideal communication/data encryption solution for smart devices with a limited computing power. Telstra released a string of home automation devices (including the Telstra Smart Home hub) in 2016. Besides blockchain, their IoT apps use face, fingerprint and voice recognition technology for identity verification;
  • Modum. The Swiss startup has built a temperature-tracking system for logistics companies that transport medications. Although 60% of medications that are shipped to EU hospitals and patients every year are not temperature-sensitive, either medication distributors or suppliers insist on using refrigerator trucks to prevent waste. As a result, the EU pharma supply chain annually spends $ 3 million on unnecessary cooling. Modum sensors capture temperature data during shipment and transfer it to blockchain. Once a medication is delivered to the end customer, the system automatically creates a compliance certificate.

Although the blockchain technology is still in development, it holds promise for both IoT vendors and their customers. If you consider building a connect gadget this year, make sure to consult an experienced software development company and…weigh blockchain’s pros and cons. Telstra, for example, failed to achieve the desired level of security with blockchain only and turned to biometrics. Also, the new connectivity standard will force smart gadgets manufacturers to change their revenue models. If you build a smart vehicle, you surely want to keep in touch with your customer and get your share of the maintenance market, right?

 

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