Opinion: Why blockchain matters for the IoT
Blockchain could be hugely important for the IoT, but is the incorruptible digital ledger for transactions as robust as it needs to be, asks Adrian Bridgwater?
Blockchain technology was originally designed to serve as the computing foundation and model underpinning the Bitcoin cryptocurrency – but it is proving to be capable of doing so much more besides.
At its heart, it is an open distributed ledger that records transactions between two parties in a verifiable and permanent way. In the case of the IoT, those ‘parties’ might of course be sensors, machines, devices, or output streams emanating from data services that have been engineered to serve those original ‘things’.
Now seen as applicable outside the confines of ‘mere’ cryptocurrency, blockchain methodology (and the data that resides within it) is lauded as inherently resistant to modification. This means that the data held within each block should be immune to hacking and alteration.
Why is this so? It’s because the data it holds exists as a ‘shared and continually reconciled’ database, hosted on millions of computers around the planet, so that no single version exists in one single place.
“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value,” write father-and-son team Don Tapscott and Alex Tapscott in last year’s Blockchain Revolution.
So what does blockchain do for IoT?
Broadly speaking, this should be a positive benefit for machine data security in an IoT world that grew up with what are widely agreed to be less-than-adequate levels of security provisioning.
Blockchain connections can be set up for devices so that their synaptic data connection points (whether through application programming interfaces or other core networking protocols) become the basis of a reputation system based upon past transactional history.
In practical terms, this could mean that an autonomous car from BMW, for example, can write to a dedicated distributed ledger for automotives, tracking anything from the market price of a vehicle to its road safety records to its miles-per-gallon performance and so on. They key here is that this BMW’s information is regarded to be more validated than that which comes from an unknown source.
We can also now move to so-called tokenization in cryptocurrency microtransactions based on blockchain, designed to enable humans (or other electronic systems) to pay for services automatically. This could allow us to move more quickly towards machine-to-machine IoT-centric areas such as automatic inventory tracking, ordering and management.
In other words, the network is starting to come alive on its own, just a little bit.
Is it hackable?
We do know that blockchain is essentially secure, via its distributed nature. Notwithstanding the development of some uber-networked quantum computing brain that is capable of penetrating every device on the planet, we should be able to trust in the bulk of what it offers us.
What is not fully robust (and may never be) is how hackable this seemingly anonymized ledger of records is. We might, however, use machine data streams (fed into platforms such as Splunk, for example) to crunch data and look for anomalous patterns that might help to identify which blockchain transactions relates to who or what.
To explain the above in more practical terms, we can cross-reference all other transactions made on the web (on social media platforms, ecommerce sites and so on), especially if we are given government freedom to do so, and then correlate this with the blockchain that we think could represent corollary figures and records.
This means that blockchain systems underpinning the IoT could be tracked to a records chain that most logically represents the activity of the devices we are trying to hack.
A blockchain truism?
Yes, this technology is game changing. Yes, it is global. And yes, it will have an impact upon the IoT. In Dubai, UAE, the government has set out goals to be the first blockchain-powered government for all transactions by 2020. So yes, blockchain matters.
But at this stage, in 2017, what (arguably) matters for any organisation working to develop (or finesse) an IoT strategy is that this strategy should have space for blockchain in future, as an enabling technology at the foundational layer.
Coming soon: Our IoT Build events, taking place in London in November 2017 and San Francisco in March 2018 are a great opportunity for attendees to explore the platforms, architectures, applications and connectivity that comprise the IoT ecosystem.