It was a matter of time to end up writing an article to talk about the connection between Internet of Things (IoT) and the technology (arguably still in the infancy of its development) that may have the greatest power to transform our world, Blockchain.

In a future planet interconnected not just by devices, but by the events taking place across it, with billions of devices talking to one another in real time, the Internet of Things will require a secure and efficient way to track all interactions, transactions, and activities of every “thing” in the network.

Blockchain’s role could be a coordination layer across devices and the enabler of the IoT to securely facilitate interactions and transactions between devices, and may also support certain processes related to architecture scalability, data sharing, and advancements in encryption and private key technology, enhanced security, and potentially even privacy.

With blockchain, the Achilles’ heel of the IoT of heterogeneous OEM devices world now becomes viable. I wonder however, if is feasible that this decentralized IoT network may co-exist IoT sub-networks or centralized cloud based IoT models.

But let's face it, blockchain is still a nascent and controversial technology (experts estimate that it might take 5 -10 years for the mainstream adoption of blockchain technologies). Therefore, we must consider that blockchain’s applications within the Internet of Things is still a matter of conjecture and trial, and that it will take more time to determine whether and how blockchain might be implemented to secure IoT ecosystems.

What is Blockchain?

Blockchain, the technology that constitutes the backbone of the famous bitcoin, is a database that maintains a continuously growing set of data records. It is distributed in nature, meaning that there is no master computer holding the entire chain. Rather, the participating nodes have a copy of the chain. It’s also ever-growing — data records are only added to the chain.

A blockchain consists of two types of elements:

Transactions are the actions created by the participants in the system.

are the actions created by the participants in the system. Blocks record these transactions and make sure they are in the correct sequence and have not been tampered with. Blocks also record a time stamp when the transactions were added.

If you want to know more about blockchain you can read:

· http://www.businessinsider.com/what-is-blockchain-2016-3

· http://blogs.wsj.com/cio/2016/02/02/cio-explainer-what-is-blockchain/

Fascinating opportunities ahead with IoT and Blockchain

The possibilities of IoT are virtually countless, especially when the power of IoT is combined with that of other technologies, such as machine learning. But some major hurdles will surface as billions of smart devices will want to interact among themselves and with their owners.

While these challenges cannot be met with the current models that are supporting IoT communications, tech firms and researchers are hoping to deal with them through blockchain .

Applying the blockchain concept to the world of IoT offers fascinating possibilities. Is yet to be seen if blockchain is bound to expedite the revolution, simply by being the backbone for most of the future IoT systems.

An example - 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). But, this is only the beginning for the blockchain and Internet of Things (IoT) . A washing machine could become a semi-autonomous device capable of managing its own consumables supply. It can perform self-service and maintenance, and even negotiating with other peer devices.

Challenges of Blockchain and IoT ecosystems

The chaotic growth of IoT will introduce several challenges, including identifying, connecting, securing, and managing so many devices. It will be very challenging for the current infrastructure and architecture underlying the Internet and online services to support huge IoT ecosystems of the future.

Forrester analyst Martha Bennett in the report “ Disentangle Hype From Reality: Blockchain’s Potential For IoT Solutions “ defines three categories of challenges that Internet of Things and blockchain ecosystems participants must address: Technology, Operational challenges and Legal and compliance issues.

According with the report, the result of multiple surveys indicates that what the IoT requires more than any technological or architectural advancement is trust: trust between stakeholders and the devices interacting with them, their customers, or on their behalf.

“As technology and commercial firms look for ways to deploy and secure Internet of Things technologies at scale, blockchain has emerged as a clear favorite for managing issues like identity and transaction security”

Blockchain, a strategic ally to Democratize the IoT

The big advantage of blockchain is that it’s public, so there is no single authority that can approve the transactions or set specific rules to have transactions accepted. Thus, the primary utility the blockchain is a censorship resistant way to exchange value without intermediaries.

Will blockchain disrupt the disrupters?. In my post “ Is it possible to democratize the Internet of Things? How to avoid that a handful of companies can dominate the IoT ” I already suggested the use of blockchain to avoid that data-hungry businesses and governments collect data on the behaviour of people and the performance of objects. Blockchain could avoid that Multinational and governments deepening tracking and control of citizen behaviour and attitudes.

Are IoT Business Models at risks with Blockchain?

IoT Service Providers hope not. There is a risk that the combo of blockchain and the sharing economy trashes some new IoT business models. Same way that, successful or not as successful platform, companies like Uber and Airbnb, are worried today.

Just think, the success of these and some other platform companies is largely due to people trading assets they own and are paid for, but from which new value could be derived, And they release this value by using platforms to match up sellers of the extra capacity – whatever it may be – with buyers. Further, they collect data about transactions “for further commercial gain”.

Indeed, arguably many of new IoT companies’ main line of business will be data, but, what if blockchain enabled buyers and sellers to work peer-to-peer and cut out the middleman/data aggregator and seller? In that case the secure connectivity could be king not the data.

A question for IoT Platform vendors, if we have a secure, foolproof decentralized system, why do I need your IoT Platform if I and all the communities I belong to can do it for ourselves, without anybody collecting, analyzing and selling data about me?

The convergence of Blockchain and the Internet of Things closer

In my post “ Will we be able to build the Internet of Things?” I warned about the Babel tower of Alliance & Consortiums in the Internet of Things.

A blockchain technology industry consortium is emerging from the meeting, New Horizons: Blockchain x IoT Summit , with the objective of defining the scope and implementation of a smart contracts protocol layer across several major blockchain systems.

In December 2016, representatives from a group of industry-leading startups and innovative Fortune 500 companies met in Berkeley, CA to discuss the challenges facing blockchain and IoT innovation and the potential for a collective effort to address them. The meeting was the first step towards a collaborative effort to explore and build a shared blockchain-based Internet of Things protocol. Participants in the discussions included blockchain companies Ambisafe , BitSE , Chronicled , ConsenSys , Distributed, Filament , Hashed Health , Ledger , Skuchain , and Slock.it , along with Fortune 500 corporations BNY Mellon, Bosch , Cisco , Gemalto , and Foxconn .

Who is using Blockchain in IoT

The IoT and blockchain combination is already gaining momentum, and is being endorsed by both startups and tech giants. Several companies are already putting blockchain to use to power IoT networks.

Filament , a startup that provides IoT hardware and software for industrial applications such as agriculture, manufacturing, and oil and gas industries. Filament’s wireless sensors, called Taps, create low-power autonomous mesh networks that enable enterprise companies to manage physical mining operations or water flows over agricultural fields without relying on centralized cloud alternatives. Device identification and intercommunication is secured by a bitcoin blockchain that holds the unique identity of each participating node in the network.

Telstra , Australian telecommunication giant Telstra is another company leveraging blockchain technology to secure smart home IoT ecosystems. Cryptographic hashes of device firmware are stored on a private blockchain to minimize verification time and obtain real-time tamper resistance and tamper detection. Since most smart home devices are controlled through mobile apps, Telstra further expands the model and adds user biometric information to the blockchain hashes in order to tie in user identity and prevent compromised mobile devices from taking over the network. This way, the blockchain will be able to verify both the identity of IoT devices and the identity of the people interacting with those devices.

IBM , allows to extend (private) blockchain into cognitive Internet of Things. To illustrate the benefits of blockchain and Internet of Things convergence, IBM gives the example of complex trade lanes and logistics whereby smart contracts can follow (and via blockchain technology register), everything that has happened to individual items and packages. The benefits: audit trails, accountability, new forms of contracts and speed, to name a few.

IBM and Samsung introduced their proof-of-concept system, ADEPT , which uses blockchain to support next-generation IoT ecosystems that will generate hundreds of billions of transactions per day.

Onename are creating the infrastructure for blockchain based identities that can be used for humans and machines. This means the blockchain can act like a phone book that lets machines find each other.

Tierion is being used to collect data from industrial medical devices to build a verifiable record of their usage and maintenance history. Tierion is thrilled to be the first partner to join Philips' Blockchain Lab. Together they are exploring how blockchain technology can be used in healthcare.

ConsenSys working with Innogy (a subsidiary of German utility RWE) are exploring how to enable an energy marketplace fed by distributed solar and other electricity-generating devices, which are run using a decentralized power grid.

21.co , Microsoft , Slock.it , and others are working directly with adopters in manufacturing, supply chain management, energy and utilities, agriculture, and construction; distributed ledgers may further automate, secure, and drive new services for these industries.

Blockchain is not the unique silver bullet for IoT security

Given the importance that Security has to fulfil the promise of the Internet of Things (IoT), I wrote “ Do not stop asking for security in IoT ” although I did not talk about how blockchain can help secure the Internet of Things. Now with this post, I hope I have corrected that gap.

The existing security technologies will play a role in mitigating IoT risks but they are not enough. Cryptographic algorithms used by blockchain technologies could perhaps be a silver bullet needed by the IoT industry to create a more resilient ecosystem for devices to run on and to make consumer data more private. But blockchain should not be viewed as the unique silver bullet to all IoT security issues considering that today’s blockchain space is even more nascent than the IoT.

Manufacturers, legislators, IoT hardware and software vendors, IoT Service Providers, System Integrators, analyst, and end users, must be aware of the IoT security challenges and focus on increase security efforts to reduce the risk inherent to the fragmented Internet of Things so among all we can accelerate adoption.

In the long term, we should keep dreaming in a fully decentralized and secure IoT using a standardized secure communication model. We must trust this dream will be possible, if worldwide, engineering talent, startups, large companies, and governments increase the investment in time, energy, and money to innovate in solutions that address the IoT’s and blockchain’s shared problems.

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