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IoT in the blockchain world

The internet of things has already become part of your everyday life, even though you may not realize it. Does your TV have Netflix streaming to it? Does your car stream from your phone? Does your home’s security camera send updates to your mobile devices? These are examples of the IoT — the digital connections between our day-to-day lives and mundane tasks, all in an effort to make things faster, easier and more power efficient.

It is estimated that IoT will significantly impact three areas of people’s lives: the connected car, the connected home and the connected self. Each of these represents new ways of data gathering and data usage, which combined with new automation and control options, creates a world of possibilities.

The connected car: The smart vehicle will be able to sync up with phones and stream media while having active data connections for GPS, live traffic updates and efficiency analytics.

The connected home: Connected homes will utilize appliances and utilities that stay connected with the user while offering remote control via apps and real-time adjustments based on environment and data.

The connected self: Phone, tablet and watch, all connected together to track your health and wellness, personal information, daily schedule and social life.

What does this have to do with blockchain? The internet of things will revolutionize many things, but it also opens the door to many security risks — and that’s where blockchain can come make a difference.

What is blockchain?

In its simplest form, blockchain is a digital chain of records, with links (blocks) in the chain as a permanent record that 1) relies on the previous link to complete its record and 2) is publicly vetted through a network of machines. Blockchain incorporates one-way encryption so that even though it’s publicly accessible and vetted, data remains secure and proprietary. This achieves a number of critical security features that make it a leader in the digital cryptography space. First, the chained requirement between blocks means that previous records cannot be altered without detection, creating permanence. Second, as a system that uses a public network for vetting and auditing, data exists in a transparent state, ensuring that any attempts at hacking will be noticed at some point.

Transparency and permanence are critical for a systemic shift to the internet of things because every device and every transaction introduced into the ecosystem creates a new security risk. Before the market can truly embrace IoT, it must have protocols and processes in place to verify that the countless transactions moving back and forth are protected. These elements must also exist in a way that minimizes resources and is optimized for ease of use, allowing for mass scaling of users and devices. Blockchain supports these needs, and current initiatives are pushing the platform into levels of efficiency that allow for enterprise usage. In an IoT world, the scale is critical — it may be easy to protect a handful of records but less so when it’s hundreds of thousands of medical records at a hospital or city department.

Blockchain in action

Consider these two real-world ways of utilizing blockchain in an everyday industry:

Car insurance: IoT can change the entire insurance process. A driver’s data gathered by a smart car — average driving speeds, distances and other data — can connect with an insurance server, delivering secure information that is only activated upon specific events (smart contracts that execute when, say, an accident occurs). This data can then be shared with all necessary parties while maintaining user privacy. In this instance, data is delivered from a single source (the car) and propagated to users rather than manual entry into each party’s own database. Blockchain’s permanence and transparency allow for the smart car’s database to be the reference point that connects data efficiently.

Identification documents: The authenticity of identification is critical for processing official records, but falsified records remain a concern. With blockchain, a new type of identity can be created, one that adds a dLoc sticker containing a tiny chip, guilloches, UV print, micro text or latent image that marries its unique ID only recognizable by the issuing agency. This data is secured within a public blockchain, which can then be used to verify authenticity when interfacing with IoT devices at government offices, hospitals, DMVs and other areas where official records are required.

These two examples represent just a fraction of all the ways blockchain can integrate seamlessly into an IoT world. Blockchain is maturing at the same time connective technology is becoming mainstream in appliances and industrial devices. Over the next decade, IoT can change the way we live, but only if a security platform like blockchain protects your privacy and data in an accessible and scalable fashion.

For more information on IoT and blockchain, Blockchain for Dummies, authored by Tiana Laurence, is available for pre-sale on Amazon (available May 2017).

All IoT Agenda network contributors are responsible for the content and accuracy of their posts. Opinions are of the writers and do not necessarily convey the thoughts of IoT Agenda.