Blockchain has gained enormous attention since it was first launched as a form of distributed ledger technology back in 2011 – and not only for its cryptocurrency potential. From revolutionising the music, real estate, logistics, recruitment and healthcare industries, to upending the way we receive funds and pay bills, blockchain has been hailed as transformational on many fronts. But it’s the convergence of blockchain and the Internet of Things (IoT) that is on the agenda for a great number of companies, as it slowly dawns on us that blockchain could provide the solution to perhaps the greatest challenge of IoT: third generation security.
For those of us who aren’t as technologically-savvy as they’d like to be, the IoT describes the system of interrelated computing devices, mechanical and digital machines, or other objects that are able to transfer data over a network, with no human-to-human or human-to-computer interaction required. The IoT describes the interconnection of computing devices embedded in everyday objects, like connected security systems, cars, electronic appliances, alarm clocks, speaker systems, baby monitors and so forth. Thanks to the development of incredibly cheap computer chips and the pervasiveness of wireless networks, there are now billions of physical devices and objects around the world that are now connected to the internet. The IoT has made our world smarter, more connected and more responsive than ever. Strangely, however, the IoT hasn’t exactly taken off at lightning speed – though you’d think it would have. There are a multitude of reasons why this is the case, from digital fatigue to the fact that people don’t think IoT will make a real difference in their lives, but there is one key issue that is single-handedly stalling the widespread adoption of the IoT.
The main problem with the IoT is the danger it poses to users’ internet safety. Any device connected to the IoT is open to exploitation by hackers, and there have been multiple news reports in recent years ranging from hackers exploiting baby monitors to an IoT botnet taking down portions of the Internet. By opening ourselves up even more to the digital world, we are putting ourselves more and more at risk of cyberattack and hacking. And there’s no chance we’re taking a backstep anytime soon – modern internet uptake statistics say it all. We aren’t moving away from technology as the years go by, we are simply surrounding ourselves with more and more of it, putting us at more and more risk of being compromised or hacked. But rest easy, because apparently blockchain could help make the IoT a whole lot safer for us in the coming years.
Given that IoT applications are, by very definition, distributed’. It makes sense that distributed ledger technology like blockchain could play a vital role in allowing devices to communicate with each other.
Blockchain is, at its core, a cryptographically secured, distributed ledger that allows for the secure transfer of data between parties. Key word here being secure’. Built and operated using smart contracts’ that allow devices to function securely and autonomously by creating agreements that are only executed on completion of certain requirements, blockchain can prevent overrides in the process by individuals who want to use the data to their own benefit. In other words, any information shared or transferred via a decentralised, blockchain-based network is safe, as it is extremely difficult to compromise network security. Blockchain mechanisms can therefore play a huge role by becoming part of a security mosaic‘ of a system.
So why aren’t we there yet?
Let’s look to the Australian example to try to understand why we haven’t moved full-speed ahead to adopt the IoT. By the end of July 2019 there were more than 3.2 million IoT devices connected to the telecommunication company Telstra’s network, according to Gerhard Loots, global IoT solutions executive for Telstra.
Our first million devices took eight years; our second million devices took five years, Loots said, before adding that he believed the telco giant would sell a million devices in 2019. In FY19, Telstra’s IoT revenue grew by 20 percent.
Australia is starting to embrace IoT, he went on Five years ago if we look back at this space it was pretty dead; a lot of it was power points and so forth. But today Tesltra is gearing up to launch its IoT Connection Manager’ – a service that will allow Telstra customers to view and manage IoT SIMs in a single location. The company has said it will also offer near real-time information about connectivity and traffic.
Blockchain has the potential to help address some of the IoT security and scalability challenges, largely because it provides a more robust level of encryption that makes it virtually impossible to overwrite existing data records. Most of all though, it could be a game-changer because blockchain technology, at its very core, is completely tamper-proof, thus eliminating the risk of being hacked or compromised.
