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Blockchain and the Internet of Things (IoT)
Friday 19 August 2016
Bitcoin is the most popular of all the cryptocurrencies but the technology behind it is set to overshadow it. The decentralised ledger system called ‘the block chain’ verifies all communications, transactions and changes. Now developers and engineers are looking at using this disruptive technology to power the Internet of Things (IoT).
Autonomous smart devices have so far been entirely theoretical but using blockchain to verify changes in the system could bring them into the physical world. In Bitcoin the ledger updates every ten minutes to remove any illegitimate changes and then informs the entire system of these amends, thereby strengthening and securing it.
At CES 2015, Samsung and IBM announced ADEPT. This was proof of concept for a decentralised system of connected smart devices. ADEPT would serve as a larger existence for billions of devices that autonomously broadcast transactions between peers in a three-tier system. It would essentially act as a low cost bridge between devices.
In the paper proving their concept, Samsung and IBM stated, “Applying the blockchain concept to the world of IoT 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).”
Samsung and IBM foresee a smart washing machine being able to order its own consumables, perform self-service, organise routine maintenance checks and have the ability to negotiate with other devices. This represents a significant advancement from current connected devices.
One drawback with this application of blockchain is that processing transactions requires a huge amount of computing power. This coupled with the sheer number of transactions an IoT system will make, makes the task of scaling the technology incredibly difficult.
Casper aims to solve this problem. It is a concept that replaces POW which is the heavy computation that makes the blockchain secure with incentives for ‘good actors’ and disincentives for ‘bad actors’. In turn this would eliminate any possibility of profiting from a network attack.
IoT devices are poised to come into their element. Gartner and IDC predict that in the next five years there will be between 25 and 30 million IoT devices worldwide. Whether these will rely on blockchain or not remains to be seen.