The Internet of Things (IoT) is often mentioned alongside the likes of AI as a technology that’s set to change the world in the near future. Gartner estimates that there will be some 8.4 billion connected devices installed worldwide by the end of 2017, up 31% on 2016. Roughly 37% of these devices will be used by businesses and the rest by consumers. By 2020, there will be more than 20 billion connected devices. Identifying, connecting, securing, and managing so many devices does not come without complications, though.
Despite the hype and a vast amount of resources being expended in researching it, the IoT's growth has largely gone unchecked. The IoT will cause a huge explosion of data, and security of this is still not being considered to the extent it should be. Just last year a number of popular websites, including Netflix and Twitter, were temporarily taken down as a result of a distributed denial-of-service (DDoS) attack in which hackers uploaded malware to webcams. In a recent survey, almost 90% of developers said they believe that IoT products do not have the necessary security in place, while 85% admitted that they felt pressured to rush an IoT application to market despite security concerns.
However, these challenges could well be overcome with another equally hyped technology: blockchain.
The current IoT ecosystem is based on a centralized model, known as the server/client model, in which all devices are identified, authenticated, and connected through cloud servers. This infrastructure will simply not be able to cope as these ecosystems scale up. Blockchain has this ability. Blockchain is, for the uninitiated, a fully transparent, permission-less, proof-of-work, peer-to-peer distributed ledger that securely allows multiple kinds of transactions to take place directly between different participants. It is a chain of data blocks, with each transaction built on a small data block linked to a blockchain. This blockchain is downloaded to the computers of everyone in the network. While everyone has access to it, however, it runs on trust protocols that mean nobody can alter any records. In terms of cybersecurity, it is unparalleled, with proven cryptographic signing capabilities. To data, it has protected over $10 billion worth of digital currency without ever being hacked.
This trustworthiness makes it the perfect architecture for the IoT. It eliminates single points of failure, creating a more resilient ecosystem for devices to run on. Blockchain can keep an indisputable, totally secure record of messages sent between IoT smart devices, thereby enabling the autonomous functioning of smart devices without the need for centralized authority. The blockchain essentially treats message exchanges between devices as it does transactions on a bitcoin network, with smart contracts that model the agreement between the two parties.
Major companies are already beginning to realize its potential. Cisco, Bosch, Bank of New York Mellon, Gemalto, Foxconn, blockchain startups BitSE, Consensus Systems (ConsenSys) and Chronicled recently announced that they are working together to create a shared blockchain protocol for IoT that allows everyday objects to connect to the internet and send and receive data. IBM has also unveiled a proof of concept for ADEPT, which stands for Autonomous Decentralized Peer-to-Peer Telemetry. ADEPT was developed in partnership with Samsung and runs on blockchains, utilizing a mix of proof-of-work and proof-of-stake to secure transactions. It would serve as a ledger of existence for billions of devices that would autonomously broadcast transactions between peers in a three-tier system of peer devices and architecture. According to the paper, ‘Applying the blockchain concept to the world of [Internet of Things] offers fascinating possibilities. Right from the time a product completes final assembly, it can be registered by the manufacturer into a universal blockchain representing its beginning of life. Once sold, a dealer or end customer can register it to a regional blockchain (a community, city or state).’
Blockchain presents many promises for the future of IoT. Challenges still remain, such as consensus models and the computational costs of verifying transactions. But we are still in the early stages of blockchain development, and these hurdles will eventually be overcome, opening the path for many exciting possibilities. Experts predict that data breaches could cause damages of up to $2.1 trillion globally by 2019, and the IoT is a weak point that needs protecting quickly, and blockchain could well be the tool to do it.