The definition of Internet of Things Opens a new window can vary, however it is often viewed as a collection of products that implement or improve automation of a personal home. However, there are many IoT applications in the commercial sphere as well – for instance, it can provide sensor grid services for manufacturing floors, provide surveillance for company security, or automate procurement. Furthermore, all these functions can be integrated through the wireless connections that lend IoT the appearance of a sleek, coordinated machine.
These are just some of the reasons why the business-to-business IoT market may be worth as much as $300 billion by the beginning of the next decade, according to PwC, which also estimates that businesses will invest more than $800 billion in the field by 2020.
However, this also poses a problem: what is needed to keep a new IoT field within the company’s control? Cyber–security analysts predict IoT security issues will become an issue, with the industry likely to pose a choice target for hackers, making it more necessary than ever to ensure the integrity and safety of corporate IoT security against outside attack.
Blockchains and IoT
Blockchain is the emerging protocol increasingly put forward to facilitate the privacy and security of software interactions in the future at the most granular levels. It is associated with increased privacy and anonymity, as every pertinent communication is converted into a transaction in a ledger that is also distributed by the blockchain. As a result, blockchain technology is increasingly perceived as the best means to enhance authenticity within a structure, such as a company’s own infrastructure or supply chainOpens a new window .
As this infrastructure is in many cases being upgraded to incorporate automated IoT technology, the need to rely on it is critical to internal and external confidence in a company’s services or products. In addition, a blockchain ledger can – at least in theory – keep a malicious party locked out of sensitive systems.
A ledger is decentralized in order to distribute the risk of incursion or data theft away from a conventional trust determination security system. In addition, the ledger can track individual IoT devices over time and with respect to its activity. Devices can also be ‘anonymous’ or identified through a unique code in the ledger. In other words, the blockchain interacts directly with each device, eliminating the risk of man-in-the-middle style attacks.
On the other hand, devices or the systems that host the ledgers could be compromised in an attempt to manipulate the ledger through false blocks or transactions (which constitute denial-of-service attacks in the blockchain context). Attackers could also exploit the components of the blockchain-IoT interface to drop or obstruct blocks. However, these threats can be addressed through the deployment of keys for requests or sending, and the application of hashing to transactions.
Despite these drawbacks, the blockchain-for-IoT approach is gaining ground for enhanced security in data sharing within a proprietary framework. It can also pair with a secure cloud, which may possibly offer savings when transferring to or upgrading IoT.
In addition, existing hardware such as sensors, cameras and even smartphones can be retrofitted for inclusion in a new IoT, and can then start to contribute data through the blockchain. Existing fittings can also be integrated into a new system in the same way, through installation of new sensors and other devices. Leading industry advocates of the ‘blockchain of things’ also claim it is amenable to scaling in a fast-changing commercial environment.
Can Blockchain Simplify IoT?
Corporate IoT providers often suggest that blockchain can make IoT connectivity simpler to use, manage and track – it consists of a ledger that translates every interaction between each ‘thing’ into a transaction, and can be visualised as a flowchart rather than the complex circuit diagrams of conventional systems. However, the ledger may span many different workstations or even computer networks, depending on the company’s size, in order to encompass all operations overseen by the IoT system.
Some researchers argue that in its current form, blockchain is too unwieldy and resource-intensive to secure modern business practices. They advocate adaptation of the technology to fit the topology of the environment, an entire field of IoT connections, that it is intended to secure, and propose a new hierarchical system by the same environment broken up into units (e.g. offices), each with a locally-controlled blockchain for all its IoT items.
Cluster Heads
This blockchain is also stored locally, but may connect to a network of other units through a secured connection. The clusters formed as a result can elect cluster heads or shift CH designation in accordance with load and time constraints. Cluster heads maintain the public keys of requesters and requestees within its nodes, and the data sent from them to other CHs, and form an overlay network, with the option of sending data to a cloud as necessary.
The advantages of this form of blockchain and its management include the granularity of control implied at the CH and node level. For example, a designated human node operator can choose which devices communicate with others through the assignation of authentication algorithms (e.g. Dillie-Hellman algorithms).
This proposal was presented with smart homes in mind and might not handle the device volume necessary for a large business. However, it illustrates the relative simplicity in security that well-optimized blockchain technology could provide. Like all blockchains, it computes trust based on multi-signature transactions and the origin of individual blocks.
Applications for the Blockchain of Things
The gig economy is an obvious target for a blockchain-connected IoT. Companies such as Uber have a demonstrable need to collect and control data from service providers and users over a relatively large area, with high turnover. This could be facilitated via a blockchain, although the ‘devices’ in question may only be the phones (and perhaps cars) of these parties. Some academics also envision use of blockchain technology to enhance complete ‘digital economy’ ecosystems in the future through tracking of micro-payments and other interactions.
This new economy would be facilitated through ‘distribution apps’ (Dapps) that can control devices and allow them to coordinate with others. For example, the apps that direct autonomous vehicles may need to be able to interact with Dapps associated with many other systems to handle repeat costs associated with the use of the car, such as fueling or parking, so ‘Dapps’ could benefit from co-ordination by a localized blockchain.
So far there are very few real-world examples of services using blockchains for pay-per-use systems, such as fully automated Airbnb rentals, although they include Slock.it, a start-up based on access to Dapps that run IoT-powered assets for rent.
In the near future, one proprietary IoT-based system could comprise hundreds of devices, all of which need to send and receive data among themselves in order to function. Blockchain technology could facilitate this level of coordination by converting each interaction into a transaction on a decentralized ledger for enhanced privacy and data integrity.
However, in the absence of appropriate optimization it could become a clumsy and expensive overarching system. In addition, even streamlined blockchains need good design to ensure security within a given Internet of Things. This emerging field, which may be termed the ‘blockchain of things’, could end up organizing how we rent, let and use assets, and become a major opportunity in the IT fieldOpens a new window in the future.