You've probably heard of Bitcoin and Blockchain before, but if you need Blockchain explained, we have your back.
AT&T, IBM, Nokia, Palo Alto Networks, Symantec, and Trustonic formed an IoT Cybersecurity Alliance earlier this week, seeking to research security challenges and influence security standards and policies. Whenever a conversation about security surfaces, the idea of applying blockchain inevitably appears.
Now, you’ve probably heard of Bitcoin and blockchain, but if you are like most people, you might not really understand how it works.
In order to understand how blockchain might affect IoT in the future, it’s critical to have a basic understanding of what blockchain is. To explain blockchain, we'll refer to Anders Brownworth’s excellent video and interactive demo on his website.
Mr. Brownworth starts with hashes and adds onto that concept to explain a distributed peer-to-peer network:
Blockchain has other uses outside of Bitcoin and financial transactions because it can act as a ledger for any kind of digital exchange. Dubbed “altchains,” new applications such as Namecoin, which keeps a record of DNS namespace, and Datacoin, which stores data in the blockchain, have sprung up using the underlying Bitcoin software.
As the IoT ecosystem continues to grow, data exchanges and security of those data points will become increasingly important. Perhaps blockchain technology could track data exchanges between sensors/devices to other devices, gateways, or end-users.
The automatic nature of blockchain then could enable even smarter machines. Right now, we have dash buttons to automate our ecommerce experience. But imagine a smart washing machine that can keep a history of its own stock, compare the prices of new detergent from multiple vendors, and pay for the delivery of the detergent on its own.
Or a smart home that keeps a history of all the data flows between the dishwasher, vacuum system, HVAC, and solar panels to optimize for electricity usage and cost.
Finally, blockchain can also push predictive maintenance to the next level, where now the computer not only determines when its parts might fail, but can also schedule and pay for that maintenance automatically.
Blockchain frees up centralized systems that are bottlenecked by trusted and centralized human authorities. Each device can act as an independent agent to create a distributed IoT blockchain. According to IBM Institute for Business Value, blockchain or any decentralized IoT solution, can support three foundational types of transactions:
Blockchain, with all of its controversies, has barely scraped the surface of its possible use. As blockchain begins to bleed into new verticals and industries, we may see a huge improvement in how IoT networks communicate currently.
It’s still early days in the application of blockchain to IoT, but there’s certainly some promise and if it works, it could be a disruptive force that finally solves the security issues that are hampering IoT growth.