Should We Build IoT on Blockchain? Absolutely!
IoT (Internet of Things) is a network of physical devices embedded with electronics, software and network connectivity that enables these devices to connect and exchange data without requiring human intervention. IoT has created a lot of buzz in the past few years and is implemented in various applications like Smart Homes, Wearable technologies, Smart Cities, Connected Cars, Smart Retailing, Digital Health, Smart Supply Chain, Smart Farming, Smart Grid, Industrial Internet and among others. All these applications have one major concern – security.
When we think about the future, the amount of data generated by IoT devices will be enormous and it will be crucial to protect the data. Wearables like Fitbit, Garmin etc. are used to monitor our body physiology and notify the health parameters on our mobile devices. If a hacker can access that device and data, then user privacy becomes threatened.
Consider connected cars, which are designed to make transportation more efficient and safe. A potential threat is if their connected systems are hacked. Recently, for the second time, Chinese security researchers were able to hack a Tesla Model X to hit the brakes remotely, get the doors and trunk to open and close while making the lights blink and streaming music from the car’s radio. They were able to remotely control the car via both Wi-Fi and a cellular connection. Similarly, smart medical equipment is designed to save many lives. But if that critical medical data is not protected, then the patients health and privacy are at risk.
A novel solution for securing IoT and connected devices is Blockchain!
What is Blockchain?
Blockchain was invented by Satoshi Nakamoto in 2008 for use in the cryptocurrency Bitcoin, as its public transaction ledger. In simple terms, blockchain facilitates secure online transactions without the help of a trusted intermediary. It is a decentralized and distributed digital ledger that is used to record transactions across many systems. A record in a blockchain cannot be modified without the alteration of all subsequent blocks as each block is connected to the block before and after it. Moreover, the records in a blockchain are secured through cryptography. This mechanism makes blockchain one of the best choices for securing IoT data.
IoT is based on client/server model which has a centralized administrator to regulate the network. The main point of attack for the hackers will be the central database wherein all the IoT data is available. Since blockchain is decentralized, the hackers must attack individual blocks for acquiring the required data. But it is not possible as the nodes in the blockchain network validate each transaction and if there is any irregular activity, it can easily be detected and prevents the attack from happening.
Another advantage of using blockchain technology in IoT is to reduce the overall cost as there is no need to pay an intermediary. For example, when we initiate a wire transfer, the verification is done by an intermediary bank. In the case of blockchain, peer-to-peer communication is followed, and the money transfer can happen directly to the concerned person. Blockchain technology provides transparent framework for devices to directly transfer a piece of property such as money or data with a secure and trustworthy contractual handshake without paying the middleman (or mediator).
Xage launched the world’s first blockchain-protected security platform for Industrial IoT in December 2017. Duncan Greatwood, CEO of Xage said that Xage will build a security fabric for IoT, which integrates blockchain technology with other resources to generate a secure environment for smart devices to operate. Xage is working with ABB Wireless on power and automation projects. Xage has partnered with Dell to deliver its security services on Dell IoT Gateways. Xage is also working with Itron to enable intelligent power-optimization applications.
Another start-up called Filament has launched Blocklet chip in January 2018, which develops blockchain hardware and software solutions for Industrial IoT, that enables smart devices to connect and exchange data securely without any central administration.
Even though there are some compatibility and operational issues, in near future, these two megatrends combined will be ruling the world making our lives better and safer.