By Connor R. Smith, originally published March 22, 2019
Despite blockchain having existed for over a decade now, few definitive uses have been proven outside of digital currencies. There have been many experiments to apply these technologies in areas like supply chain, healthcare, real estate, and even tipping people for their tweets or for watching online ads, but, there has yet to be one vertical that has been radically transformed from them. Many feel that this is because the technology is not mature enough yet or a general lack of understanding. Certainly, a lackluster user experience and insufficient education play a part, but others have started to argue that blockchain is a solution searching for a problem that may or may not even exist. It seems like new articles surface weekly about startups raising millions of dollars promising to solve some largely nebulous problem using “Blockchain + IoT or, AI, or Drones, or all the above…”. At Consensus Networks, we’re focused on finding and supporting protocols that are technically sound and addressing real-world use cases. One area we have been particularly excited about lately is the ability of blockchain to secure internet of things (IoT) data.
In 2018, there were over 17 Billion connected devices around the world, 7 Billion of which were IoT enabled. These numbers are projected to double or triple over the next 6 years. IoT devices communicate with one another by gathering and exchanging data through sensors embedded in the device, enabling greater automation and efficiency. Devices that are seemingly unrelated can communicate with one another, driving the convergence of many verticals ranging from smart homes, cities, and cars to medical and industrial IoT. For example, IoT-enabled machines in a manufacturing plant could communicate information regarding system health and other mechanical data via a centralized platform. Plant operators could then take corrective action before a malfunction occurs, easily conduct more preventative and informed maintenance, and more accurately predict production rates. In fact, studies have found that over 90% of tech, media, & telecommunications executives feel that IoT is critical to nearly all of their business units and will drive the greatest business transformation over the next 3 years.
Now you’re probably thinking, “Okay so if IoT can fix all of the world’s problems why do we need to add blockchain too?”. IoT may be a powerful emerging force, but it has some critical flaws. While IoT devices are great for communicating streams of data and supporting real-time device monitoring, they often have extremely poor endpoint security. For example, in 2017 the FDA had to recall over 500,000 internet enabled pacemakers after finding vulnerabilities that allowed hackers to gain control of the device. Beyond healthcare, IoT data privacy and security issues are an even greater concern when considering the connected future of autonomous vehicles, homes and smart cities. Another shortcoming of current IoT networks lies in their scalability. Conventional IoT network architectures are centralized with the network of devices sending data into the cloud, where it is processed and sent back to the devices. Considering the projected deluge of IoT devices projected to enter into the market, scaling this infrastructure will be highly difficult and expose vulnerabilities to hackers to compromise the network and access your data.
Fortunately, integrating blockchain technology with IoT networks provides a path forward to overcome the scalability, privacy, and security issues facing IoT today and accelerate the adoption of both technologies. As opposed to having a centralized system with a single point of failure, a distributed system of devices could communicate in a trusted, peer-to-peer manner using blockchain technology. Structuring the network in this manner means that it would have no single point of failure, so even if a device was compromised the remaining nodes would maintain operable. Moreover, smart contracts could be integrated with the network to enable IoT devices to function securely and autonomously without the need for third party oversight. Consequently, blockchain-enabled IoT networks could exhibit greater scalability, security, and autonomy simply by modifying their current network architecture and implementing a more decentralized approach.
However, perhaps the most important benefit blockchain provides IoT networks comes from its cryptographic security. Sharing data across a cryptographically secured network makes it far less susceptible to hackers, by helping to obfuscate where data is flowing, what is being exchanged, or what devices are transacting on the network. Whereas security in modern IoT networks was added as an afterthought, encryption and cryptographic keys are a core component of blockchain technology. Moreover, some networks are beginning to incorporate zero-knowledge proofs, which means that network security for IoT devices could be bolstered even further.
The underlying mathematics and mechanics of zero-knowledge proofs are highly complex, but essentially allow two users to prove that a piece of information is true without revealing what the information is or how they know it to be true. In the context of IoT devices, this means that a network of IoT devices could share data in total anonymity and with complete privacy. No information regarding the transaction would be revealed other than proofs verifying that the network knows it is legitimate. Thus, the network maintains complete functionality while preserving maximum security. Regardless of if a blockchain-enabled network of IoT devices utilized zero-knowledge proofs or not, simply utilizing a shared, encrypted ledger of agreed upon data can provide many security benefits in IoT networks.
While there have been several projects that have attempted to tackle IoT and blockchain, one that we are excited to support is IoTeX. Founded by a team of cryptography and computer science experts in 2017, IoTeX is a privacy and security centric blockchain protocol that aims to create a decentralized network designed specifically for IoT devices. IoTeX uses a network architecture consisting of blockchains within blockchains, where a root chain manages many different subchains. Designing the network in this manner allows IoT devices that share an environment or function to do so with increased privacy, with no risk to the root chain if this subchain is compromised.
Aside from enhanced privacy and security, this design allows for greater scalability and interoperability as subchains can transact with the root chain directly or across the root chain to other subchains. IoT devices on the IoTeX network are also able to transfer data with one another in total privacy through the incorporation of lightweight stealth addresses, constant ring signatures, and bulletproofs. IoTeX also incorporates a Randomized Delegated Proof of Stake (RDPoS) mechanism for achieving consensus that they refer to as Roll-DPoS. Using this mechanism, nodes on the IoTeX network can arrive at consensus much faster with instant finality and low compute cost, making it much more friendly to IoT devices. Moreover, the IoTeX team recently released their first hardware product that leverages their blockchain network, Ucam. Ucam is a home security camera that writes data it records directly to the IoTeX blockchain, preventing it from being accessed by device manufacturers or sold to third parties like Google or Amazon. Ucam guarantees absolute privacy and provides users with secure blockchain identities which they can use to control their data.
Thanks for reading! More articles to come regarding use cases for IoT and Blockchain and what the marriage of these two technologies might look like for Web 3.0 and Industry 4.0. Let us know what you think and find us on twitter or discord if there are any questions or areas you’d like us to explore! If you’re interested in finding out more about IoTeX, Ucam, or how blockchain can improve your IoT solution, feel free to contact one of our LedgerOps experts here. We have supported IoTeX for nearly a year now, and have been running a delegate node on their mainnet since genesis. Needless to say, we are highly familiar with the protocol and eager to see if IoTeX or any of our other blockchain network services are a good fit for your IoT application!