IoT or Internet of Things is a much touted technology these days. All-pervasive, spanning multiple verticals, a humongous amount of data is being captured from all around us by millions of devices. This may sound impressive, but the moot question, as Debjani Ghosh of Nasscom rightly poses, is: “Are we able to derive optimum economic value from the mountainous heap of data” generated?
The answer is not totally encouraging since success here depends on the quality and adequacy of the back-office systems and technologies. That, globally, only about 30 per cent of IoT projects survive beyond the pilot phase is a powerful indicator that much needs to be done to effectively tap this new technology.
In this context enters blockchain or multi-ledger technology to provide possible deliverance. Designed specifically as a back-end for Bitcoin, the conceptual architecture of blockchain has evolved and found theoretical application in nearly every industry. It takes no more than querying any search engine with a combination of the blockchain and an industry or vertical of your choosing, to discover a large body of literature detailing how the blockchain is expected to solve prevailing inefficiencies.
While some uses may currently seem far-fetched or out of reach, there are others that are close at hand. One thing is clear: blockchain, as a conceptual framework, is wonderfully versatile.
Of the many possible uses of the blockchain, IoT is amongst those that stand to benefit significantly, yet the combination rarely gets the attention it deserves. According to the annual Cisco Visual Networking Report, the number of connected devices in the world will “grow 2.4-fold, from 6.1 billion in 2017 to 14.6 billion by 2022”.
Traffic from these connected devices is expected to grow seven-fold over the same period. We won’t just see an exponential increase in the number of devices, but also in the amount of data transmitted and computation required. There are reasonable concerns with respect to scalability, reliability and security when considering the creation of large IoT networks, and the blockchain may just be the alchemical ingredient the industry needs.
Given predictions and eventualities, specifically with reference to the sheer growth that is expected in the number of networked “things”, it becomes imperative to provide for an acceptable level of confidence in the platforms that will power the Internet of Things. The blockchains’ ability to work as a distributed network, and safely execute on a wide variety of requirements make it an ideal candidate to support the level of innovation and adoption required for IoT to succeed.
The key issues of scalability, identity management, autonomy, reliability, security and marketing can all be addressed by a well architected blockchain.
The current centralised architectures of IoT networks pose a problem when we consider the scale of citywide networks that would track hundreds of metrics from millions of things. The expected points of failure and scalability bottlenecks can be adequately addressed by a blockchain. Decentralisation is a core feature of blockchains, and if implemented appropriately could allow for a shift to peer to peer network designs, greater fault tolerance and expedited scalability.
A massive IoT network would also be required to manage identities — of both users and things — efficiently and securely. An intuitive benefit of a common blockchain would certainly be the efficiency with which this identity management would take place. After all, if all identity records are contained within a single network, their discovery and management will be far simpler than if multiple networks had to be connected just for these devices to be able to talk to each other.
The very nature of IoT mandates a certain level of autonomy in the functioning of enabling platforms. The reliance on server farms is expected to be significant for any large scale IoT implementation. Once again, the blockchain offers a possible solution. With a blockchain, devices would be able to communicate without the need for large server farms and could be deployed in a device-agnostic manner at scale.
The tamper-proof nature of the blockchain is yet another quality that draws companies and entire industries towards it. This essential security feature finds perfect application within IoT, where authenticity and verification of data are critical, especially in the case of digitised citywide networks.
Security is expected to be a significant area of concern as IoT networks get larger and more ambitious. The information flowing over IoT networks can be secured effectively by storing it as a transaction on a blockchain. Powered by smart contracts, the blockchain could enable secure communications between devices, with scope for radical innovation.
While all these represent efficiency improvements that would allow for greater innovation, large scale adoption is another matter that accompanies distinct requirements.
Remarkably, the blockchain possesses the ability to increase market access for deployed services. Transactions between peers can be simplified to a significant degree, and without the need for authorities or third parties. The blockchains’ trustless environment, which ironically offers unprecedented levels of distributed security, is ideal for the deployment of micro services and for the simplified execution of micro transactions.
Comparisons between blockchain and the internet are unfounded. The versatility of the blockchain is established by the fact that it integrates well in a wide variety of applications, and can drive efficiency across a range of parameters. What then is the most appropriate course of action to begin integrating the blockchain with the IoT and, possibly, with Artificial Intelligence too? Perhaps an answer can be found in an examination of what the technology has enabled in other sectors, and try to integrate what has worked, while avoiding what didn’t. The R3 model is one that offers up some unique insights. The consortium today is made up of nearly 200 members and has in four years been able to implement a blockchain based financial solution. Yet, membership in this consortium is not limited to financial institutions, but rather best served, as it currently is, by mix of banks, IT companies and others.
The IoT sector has a mix of stakeholders, each with a vested interest in the success of the paradigm. Wouldn’t, then, cooperation between these stakeholders be the key ingredient that brings to fruition the development of an open source IoT blockchain that is capable of accelerating innovation in and adoption of IoT networks and service?
The writer is president of Broadband India Forum. Views are personal. Research inputs from Kartik Berry.