By 2020, the number of connected IoT devices worldwide will grow to over 20 billion. This is according to a report by IHS Markit, a London-based global provider of information and insights in critical areas that shape today's business landscape.
While the internet has enabled people to connect with each other, the IoT is making it possible for devices to communicate with each other and share value as well.
The proliferation of IoT is a result of the growing trust in the internet which is likely to explode with the blockchain. This is because the distributed ledger technology addresses most of the challenges that keep people from trusting the digital world fully.
When it comes to corporate IoT deployments, a survey by BlackBerry shows cybersecurity to be the most significant challenge. According to Marty Beard, the company's COO, organizations are fearful that if they connect unsecured IoT devices to their networks, they are exposing their companies to hackers.
The marriage between blockchain and IoT is addressing this challenge by authenticating the users of IoT devices and securing blockchain processes cryptographically, making it more difficult for hackers to access the blockchain.
Xage, a Silicon Valley-based startup, is an excellent example of a project leveraging the distributed ledger technology to secure industrial IoT. The Xage security fabric enables devices to establish consensus to identify and isolate devices and applications infected with malware. The goal is to ensure that there are no security loopholes in the entire network. Their consensus mechanism is designed to strengthen with the expansion of the network meaning that the more IoT devices there are in a network, the stronger the security.
Another great example is IOTW, a project by AnAPP Technologies. The IOTW project seeks to enable fast and secure transactions across IoT devices and to facilitate this by addressing the issue of blockchain scalability which is the biggest roadblock to blockchain mass adoption.
To address scalability, the project applies what is known as proof of assignment (POA), a protocol in which a limited number of candidates are randomly assigned to solve cryptographical problems. This is different from the commonly used Proof of Work (POW) and Proof of stake (POS) mechanisms. Proof of Work involves solving complex mathematical problems to validate transactions while Proof of Stake consists of a voting process to elect the one to validate a transaction.
The problem with the POW method is that it is energy intensive and requires large memory. The POS, on the other hand, is less energy intensive but still demands large memory. Unlike POW and POS, POA is highly scalable, less energy intensive and does not require a large memory capacity from the device. This makes it compatible with most IoT devices which usually have less computing power and memory. This solution is also convenient for IoT device users as no extra hardware is required and users can simply download IOTW firmware to adopt blockchain on each device.
Another project known as Helium is working on a similar solution aimed at eliminating single points of failure in IoT. The company uses what it calls "proof of location" "proof of coverage" or "proof of serialization" to secure and validate transactions in IoT devices. The method involves devices known as Gateways, which are similar to wife routers, and communicate with each other through radio frequency.
Crypto miners are required to buy these devices and use them to capture data from IoT devices around them and transmit it to its proper destination. The Gateways validate transactions by validating that other gateways in the network are providing legitimate wireless connectivity.
For instance, if you have a gateway device it will capture data from IoT devices in your home and securely transmit them to those registered as service providers for specific devices. Other devices in that area will validate the data transmission by verifying and timestamping the location of your Gateway. The process is autonomous meaning that there is no single point where an individual entity is responsible for the security of the network.
With the blockchain addressing the security and scalability issues in IoT, there is no doubt that the industry is bound for explosive growth. The marriage between the two technologies also means that the distributed ledger technology has found a highway to mass adoption through promising projects paving the way, the blockchain and IoT combination is likely to become the norm.