10 things you need to know about blockchain

Futuristic chains in a row, representing blockchain.

While some people stress blockchain’s disruptive potential, others remain somewhat more skeptical. But what is blockchain all about? We have compiled a list of the ten things you should know about this relatively new technology.

1. What blockchain is

Blockchain is a database that is managed on a peer-to-peer network of computers, which are referred to as nodes. It can also be described as a distributed ledger: a decentralized way to chronologically document transactions. Each participant in the network has access to the entire blockchain and its history. When a transaction is recorded, the accounts of all the participants are updated with the information. Transactions are grouped together in blocks, each of which is then linked to the one that came before it. The result is a chronological record that is basically impossible to tamper with, alter, or falsify.

2. How blockchain works

If two parties agree to a transaction, this information is broadcast to the computers (nodes) of the peer-to-peer network, where it is then validated. Once the transaction has been verified, it is added to a block together with other transactions. This block is then hashed. Every block contains a reference to the hash of the block that came before it. This guarantees the position of the block in the chain and ensures that it cannot be tampered with. The new block is then permanently added to the blockchain and distributed to all its participants. The transaction is now complete.

Photo of the skyline of Frankfurt.

With blockchain there is no longer a need for intermediaries.

3. There is not just one blockchain

Blockchain can be implemented in many different ways ; there is not just one single blockchain everybody uses. It is also not a product or a single software program. It can be compared to middleware in that blockchain itself has no real value – value is created only when it is used in conjunction with suitable applications.

4. Blockchain gets rid of intermediaries

Blockchain creates the very trust it requires to function. It allows participants to transfer assets directly among themselves, thus bypassing third-party intermediaries like banks or brokers . It also makes it possible to quickly prove who has the ownership of a specific asset. Because each block is secured by cryptography, it is almost impossible to manipulate transactions recorded in a blockchain. This ensures the authenticity of every transaction and makes them virtually immune to forgery.

5. Blockchain goes beyond virtual currencies

Though often mentioned in the same discussion, Bitcoin and blockchain are not the same thing. Bitcoin is a virtual currency (or cryptocurrency), while blockchain is the tool that makes virtual currency viable. But while Bitcoin may be the best-known use case for blockchain, there are many others besides .

Blockchain: Close up of a coin with the Bitcoin logo.

Bitcoin may be the best known blockchain use case but it is by far not the only one.

For example, blockchain allows musicians to get paid directly when consumers buy or listen to a song. The purchasing platforms can be cut out of the process, which also means they don’t take a cut of the revenue. Musicians benefit both financially and from a more direct relationship with their fans.

Another example is online voting. When a vote is cast and recorded in the blockchain, it is very hard to alter. That makes it difficult to commit voter fraud by manipulating votes. Furthermore, every voter would have a complete record at hand and could track the outcome as the vote takes place.

6. Blockchain is decentralized and reliable

Since blockchain is distributed across a peer-to-peer network, there is no central point where data is stored. A copy of the blockchain is saved on all of the computers of its participants. This decentralized approach ensures security and reliability , as there is no single point of failure for hackers to attack. Taking this idea a step further, the blockchain is generally managed by its participants: no one entity has authority over the blockchain as a whole (at least in the case of public blockchains).

7. Blockchain offers transparency

Whenever a transaction is conducted as part of a blockchain, it is recorded and visible to all participants. Blockchain participants can be, but do not necessarily have to be, anonymous. When talking about Bitcoin, the term “pseudonymity” often crops up, referring to a kind of anonymized pseudonym. Even though each user has a unique Bitcoin address, this pseudonym can be linked to their personal information in different ways. A simple example would be a user providing their home address to receive a delivery paid for with a Bitcoin transaction.

8. There is a difference between public and private blockchains

Public and private blockchains generally work in the same way; the main difference is who is allowed to participate. A public blockchain is open to anyone who wants to be part of it. The downside is that, due to the large number of participants, verifying transactions takes more time. Bitcoin is a well-known implementation of a public blockchain.

Private blockchains, on the other hand, are controlled by one entity that decides who is allowed to participate. This entity may also set up rules and regulations to govern transactions. Transactions are generally conducted faster within a private blockchain because of the limited number of participants.

In a business context, there is a third option: the consortium blockchain. Here, no single entity has full control; instead, a predetermined set of nodes are allowed to participate. A hypothetical case would be a consortium of ten different companies, with each one authorized to operate a node. This type of blockchain ensures that the transaction information stays among its participants without consolidating power in one place.

Closeup of Dashboard Instruments

A possible IoT use case: The Bosch IoT Lab explores whether blockchain can help prevent odometer fraud.

9. Blockchain enables smart contracts

A smart contract is a computer protocol that facilitates transactions and makes sure that the terms of a contract are met. It does this by automatically triggering actions following the finalization of a contract. One basic example is purchasing a computer program: as soon as the payment has been made, the download of said program starts automatically.

10. Blockchain has use cases in the IoT

In combination with smart contracts, blockchain can also be used for IoT use cases. One possible scenario, as presented by the German startup Slock.it, involves house rentals: the owner of the house installs a smart lock on the front door and sets a rental price. After the tenant has paid the required sum, the door opens automatically to let the tenant enter.

There are other scenarios besides smart contracts. Imagine you want to buy a used car that has had some parts replaced. With the help of blockchain, you can trace the origin of the spare parts to make sure they are not counterfeit. Another example is odometer fraud: by recording the car’s mileage in a blockchain, you can be sure that nobody has tampered with it.

More about blockchain:

How to prevent odometer fraud using blockchain. An interview with Timo Gessmann of the Bosch IoT Lab.

Timo also shares his thoughts about blockchain.

Bosch and other international companies have set up a new alliance to make use of blockchain and related technologies.

The post 10 things you need to know about blockchain appeared first on Bosch ConnectedWorld Blog.

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One size doesn’t fit all – for business case flexibility you need security and connectivity choices

As the Internet of Things (IoT) continues to mature, organisations are looking to select enabling technologies, services and solutions to turn their business ideas into reality. Among the many fundamental capabilities required, connectivity and security are among the most visible as Richard Stamvik, managing ecosystem and partnerships at MultiTech, discusses in this interview with IoT Now.

IoT Now: There are many decisions to be made to ensure optimal IoT deployments. What factors should organisations take into account when making connectivity decisions?

Richard Stamvik: There are several challenges for organisations: How large is the area they intend to operate in – is it a building or a country? What quality of service do they need and how much are they prepared to pay for that? What’s the acceptable energy consumption of the IoT solution as this relates to the cost of power from, for example, batteries? And what’s the amount of data to be transmitted and what are the related speed and latency requirements?

Different technologies have different pros and cons. For example, short range Bluetooth technology offers low energy consumption and high data rates. Similarly, you can roll-out low energy, long range low power wide area (LPWA) technologies such as LoRa or narrowband IoT (NB-IoT) but these won’t offer the high data rate of 3G or 4G.

A key learning here is that one size does not fit all.

IoT Now: Choosing between licensed and unlicensed spectrum is a core challenge. How can organisations judge the relative merits?

RS: The right to use licensed spectrum costs money, payable to the body managing the regional radio spectrum allocation. Here we find the 3GPP cellular ecosystem with operators offering worldwide network coverage and equipment providers with footprint across the globe. Licensed spectrum offers good quality of service, high reliability and low latency, and is suitable for critical or real-time control usecases.

Anyone can use unlicensed spectrum and this offers a quick route to market and cost advantages for infrastructure, devices and services which are all becoming widespread, with both private and public deployments across the world. Here we find LoRa and a several other technologies. Licensed and unlicensed spectrum both have their pros and cons and usecase requirements must govern which to select.

IoT Now: Among the wide range of unlicensed options, why are organisations choosing LoRa solutions?

RS: There has been a big uptake of LoRa solutions because other unlicensed technology alternatives are either immature, have small ecosystem and deployment footprint or unsuitable business proposition, and licensed technology alternatives such as cellular NB-IoT or LTE category M1 haven’t been widely available. Cellular options such as 3G and 4G were not really designed for low bandwidth and low energy consumption applications whereas LoRa would fit the requirements as well as offer an industry standard and a growing ecosystem of product and service providers.

There’s a massive diversity in use cases which means many different approaches are required. Consider the business case options; once you have bought your cellular devices you pay a recurring fee to an operator, whereas after your investment in unlicensed […]

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Need for Cybersecurity Agenda for the Connected Age

To address the security concern in the connected economy, BSA proposes a Cybersecurity agenda. Cybersecurity practices and tools must defend the integrity, privacy, and utility of the Internet ecosystem. Given that effective cybersecurity requires close collaboration between the private and public sectors, BSA in the cybersecurity agenda urges that the Indian Government expand its leadership both here and abroad.

We are connected through our smartphones and web browsers. Also, through home appliances and industrial manufacturing robots. While these online connections bring opportunity, they also create risk, including large-scale data theft, privacy violations, phishing scams, ransomware, and malicious information operations that affect millions of people in India and around the world each year. Technologies such as cloud computing services and artificial intelligence connect businesses and governments, and transform their operations.

BSA suggests that the need of the hour is to Drive IoT cybersecurity through adoption of proven software security best practices. Leverage on emerging technologies to enhance security. Target investments and constructive policies to capitalize on the tremendous potential of artificial intelligence, quantum computing, blockchain, and other emerging technologies to enhance security.   Read more…

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We need a more sustainable approach to Network Neutrality

Yesterday, Federal Communications Commission (FCC) Chair Ajit Pai announced that in the FCC’s upcoming December 14 meeting they will vote to remove the Title II classification of Internet service providers.

As we outlined in our Policy Brief on Network Neutrality, the core principles of choice and transparency are fundamental to a free and open Internet that benefits users around the world. Simply put, users should be able to access the Internet content and services they choose without corporate or government interference.

Now is not the time to give up on these goals. Regardless of the action the FCC takes in the coming weeks, the Internet Society will continue to fight alongside allies around the world for our fundamental goal – to ensure an open Internet, characterized by access, choice and transparency for all users around the world.

Thus, we believe that strong rules are still needed – merely focusing on transparency is not enough to protect users’ access to an Open Internet.

We hope that the U.S. government can take a more sustainable approach to net neutrality; one that upholds the principles that are rooted in the Internet Society’s core values of a global and open Internet. Between seemingly endless court battles and the fact that FCC regulations can change from one US Presidential administration to another, it is clear that we need to try something different. Americans need clarity in this debate.

The future of the open Internet is in each of our hands. To #shapetomorrow we need to work together to find new ways to ensure an open Internet is available for everyone.

Image credit: Blaise Alleyne on Flickr  CC BY 2.0

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Alcatel Lucent Enterprise: Airports need to get smarter, not just bigger

Alcatel Lucent Enterprise: Airports need to get smarter, not just bigger

In a contributed article to Internet of Business, Kelly Allen, director of transportation for Europe North at Alcatel Lucent Enterprise, argues that intelligent airports don’t let lack of space hold them back.

Alcatel Lucent Enterprise: Airports need to get smarter, not just bigger

Kelly Allen of Alcatel Lucent Enterprise

Civil aviation is booming and airports are under constant scrutiny to maintain or improve safety levels as passenger numbers continue to grow and the number of routes and flights increase. In order to improve profitability and because of increased market pressures, airports are being driven towards operational efficiency and cost reductions. But capacity constraints, due to lack of space, mean that it is new technologies that are starting to introduce new efficiencies.

IoT, automation, big data, robots, artificial intelligence (AI) and virtual reality are becoming part of the civil aviation ecosystem, along with integrated data collection and better real-time communications channels. To make the most of these technologies, airports need to put in place processes that simplify and speed up collaboration within aviation communities. And these of course are diverse, bringing together many different operators and interest groups together, from airlines, ground handlers and air traffic management to consumers, retailers and regulators.

Read more: IoT set to transform the airport experience

Managing a complex ecosystem

In both operational and customer-facing roles, the potential for IoT-enabled connected assets to streamline processes cannot be understated. There’s real-time visibility into the condition of assets, for example, or location-based services and beacons for wayfinding and asset tracking. There’s digital marketing and signage, live information sharing, remote sensors for monitoring runway or environmental conditions and IP cameras linking to facial recognition software or enabling whole digital control towers. There’s baggage handling, passenger tracking and self check-in – it’s everywhere.

It’s a near-impossible task to manage all these types of technology if they are rooted to individual subsystems which all need their own management and maintenance. No matter what digital tools, platforms or systems airports choose to adopt, they will never reach their full potential without the right network or communication building blocks. Further to this, ineffective implementation will increase the potential for these new devices to place a strain on network resources, introduce new vulnerabilities and negatively impact traveller experience.

Yes, aviation industry players need to align, but airports in particular need to evolve towards cost-efficient, IP-based solutions for most systems. This will immediately enable better connectivity between people, processes and smart ‘things’ – and also simplify IT management. This is where the connected airport comes in.

Read more: Cincinnati Airport uses Bliptrack to improve passenger wait times

Digital security

Whether it’s IP security cameras or heating, ventilation and air condition (HVAC) systems, or information boards, running all processes on a single network infrastructure is more cost-effective to manage and maintain and offers much greater visibility on an enterprise-wide scale. But there are dangers to poorly secured deployments and any compromized device can be a possible backdoor into the network. As more fixed and mobile devices connect to the network edge, it becomes increasingly important that these IoT devices are properly contained.

With network virtualization techniques, it is possible to create virtual isolated environments on a single infrastructure and make IoT more manageable. This enables different teams or departments to maintain their own IoT network deployments. Virtual segmentation on the network can create ‘IoT containers’ to group together, manage and secure devices and users, and in the event of a breach, can stop threats moving east-to-west across the network.

IoT containment also makes it possible for the different departments to enforce their own quality of service (QoS) policies on the network to optimise their own operational processes. In each virtual IoT container, it is possible to see and manage all the traffic and users, prioritize devices and applications, reserve or limit bandwidth, blacklist devices or monitor for suspicious traffic patterns. Quality of service policy enforcement can ensure that critical operational processes or network assets can always get the network resources they need to function properly.

Airports can manage passenger movement, optimize operations and implement better emergency communications. Airlines can provide a hassle-free customer experience by relying on infrastructure such as beacons for automated notifications. Passengers can get real-time updates about estimated waiting time at security lines, locations of specific airline check-in counters, gates or baggage belts.

Retail concessions and restaurants can use location-based services to promote offers which will lead to increased interaction with passengers and a subsequent increase in revenue. Critical passenger or situational information can be shared directly between relevant parties in real-time – getting the right information to the right people, exactly when it is needed.

Read more: Athens International Airport turns to IoT for environmental monitoring

Intelligent airports

The need for real-time information exchange will see airports adopt new technologies for a free-flow of communication. Innovations that integrate smart devices and share information at every point of a passenger’s journey, and enable greater communication between civil aviation stakeholders, will play a vital role.

But rolling out the right infrastructure needs careful planning, an eye on future developments and a security-first approach – from customer-facing services, right down to the hardware. The ‘intelligent airport’ is more than a vision, it’s a must. With the right infrastructure, it has the potential to become a global reality.

Read more: Billund Airport invests in IoT system to improve passenger experience

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