Emerging Opportunities with Blockchain

Emerging Opportunities with Blockchain

DOI: 10.4018/978-1-5225-2193-8.ch007
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Decentralized Iot

The Internet of Things (IoT), cloud and blockchain are three massive tech trends that could combine to create an entirely new method of data process known as IoT-based computation. This development looks at the 'art of the possible' and this new way of thinking could provide powerful ways for a business to run autonomously (Crosby, 2015).

As per Gartner estimations 5.5 million new 'things' get connected to the internet every day populating the IoT world rapidly. Technology analyst also forecast a huge growth in the number of connected things from nearly 4.9 billion devices at the end of 2015 to 20.8 billion by 2020.

A conventional, centralized approach would be an expensive undertaking in terms of time, personnel, infrastructure, logistics, and money. Blockchain technology provides an alternative that allows any single participant to essentially “outsource” the management, communications and scalable infrastructure problems to the peer-to-peer network that maintains the blockchain. Instead of using a central server, a distributed public ledger will be maintained to store the transaction records of “things” and every node will possess a copy of this immutable public ledger.

The “scalability” feature of blockchain can be utilized to accommodate ‘things’ in the IoT world. The number of IoT devices is expected to increase into multiple billions and developing centralized control to accommodate these enormous numbers of things to the system will not be viable, both economically and technically. As mentioned by Crosby, It should be noted that the use of blockchains to support IoT computing does not magically eliminate the cost of infrastructure or communications. In the end, the bits have to get to where the bits have to get to, and somebody, somewhere, is going to have to pay to make that happen; nothing is free (Crosby, 2015).

Blockchain technology provides the ability to redistribute costs across all of the participants of the peer-to-peer network, and give each peer an economic motivation to provide their (small) part of the infrastructure needed to enable the greater good. This reduces the burden on any individual peer, while allowing them to leverage the resources of all. The cost to add a message to the chain is a small “transaction fee,” so a broadcast type message could be added to the blockchain, and be received by literally a billion or more IoT devices for very little relative direct cost to the sender; this is not possible with a centralized approach. In the coming future, the blockchain powered IoT devices will find its application in smart appliances, precision farming sensors, self-driving vehicles, supply chain monitoring sensors etc.

IBM and Samsung introduced a Proof-of Concept of Blockchain powered IoT system called ADEPT, in which they demonstrated a self-sufficient washing machine over decentralized IoT (Panikkar, 2014). We will discuss more details about ADEPT in the coming sections.

Filament, a blockchain-based startup had developed IoT-powered sensors called “Taps” for establishing low power autonomous mesh networks mainly focusing on data and asset management.

Chain of Things (CoT) is a consortium which is focused on exploring the potential of Blockchain-based Decentralized IoT and the security issues in the IoT sector. As per the sources, they are focusing on developing IoT hardware components backed with blockchains to provide solutions to IoT security.

IBM developed Watson IoT platform that supports IoT devices to perform transactions over the private blockchain network. This allows businesses to track every transaction over the IBM’s tamper-proof public ledger and thus prevents disputes over the transactions

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