Close your eyes and imagine the future Internet of Things (IoT) — what do you see? Most imagine a world where all devices are connected, can talk to each other seamlessly, and are “smart” enough automate our lives while keeping our data private. Unfortunately, today’s IoT landscape is far from this future vision and innovation in the IoT industry is relatively stagnant. Using traditional cloud-based approaches, we have succeeded in connecting everything to the Internet, but have hit technical and operational roadblocks in interoperability, automation, and data privacy. Overcoming these roadblocks and capturing the full potential of IoT requires a new decentralized approach: blockchain technology.

The intersection of blockchain and IoT has grown rapidly in 2018 and is still gaining momentum. What started as a nascent industry has transformed into a vibrant ecosystem of companies developing blockchain components and solutions for smart cities, supply chain, renewable energy, transportation, and other IoT-enabled industries. Although it is simple to bundle all of these companies together as “blockchain & IoT”, they actually vary in scope / approach and address different layers of the blockchain & IoT tech stack:

IoT Devices: physical layer of connected devices that capture and transmit data to the blockchain, making it usable in various applications || Example: Bosch

physical layer of connected devices that capture and transmit data to the blockchain, making it usable in various applications || Example: Connectivity: enables transmission of data from IoT devices to the blockchain; IoT devices support one or more types of connectivity networks || Example: AT&T

enables transmission of data from IoT devices to the blockchain; IoT devices support one or more types of connectivity networks || Example: Blockchain platform: environment which facilitates the building and running of DApps — includes infrastructure (compute, storage, network resources), protocol (consensus, permissions, other network rules), and services (tools / modules to facilitate DApps)|| Example: IoTeX

environment which facilitates the building and running of DApps — includes (compute, storage, network resources), (consensus, permissions, other network rules), and (tools / modules to facilitate DApps)|| Example: Decentralized Applications (DApps): user-facing software built on blockchain infrastructure that performs specific functions using data, user inputs, and smart contracts || Example: HAB, weeve

In our last blog “Blockchain’s Role in Today’s IoT Landscape”, we explained how blockchain will revitalize innovation in the IoT industry and unlock new capabilities. In this blog, we take a deep dive into the multiple layers of the blockchain & IoT tech stack and describe how these layers ultimately come together to form end-to-end IoT solutions.

Internet of Things (IoT) Devices

Connected IoT devices serve as the bridge between the physical and digital worlds and can greatly expand the reach and impact of many applications. While non-IoT applications only process data from user-generated actions (i.e., sending tokens between nodes), IoT-enabled applications can push / pull data from IoT devices, which operate as nodes in the network. By 2023, there will be an estimated 100 billion IoT devices that will digitally record the physical history of our world.

IoT devices generally have one or more types of sensors / trackers (e.g., location, temperature, speed, light, air quality), which digitally record physical qualities of a person, asset, or environment at a specific point in time. There are billions of IoT devices that collect data for various purposes, including battery-powered sensors deployed in hard-to-reach areas and smartphones with advanced sensors (e.g., gyroscopes, accelerometers). In addition to types of data they capture, IoT devices are further differentiated by their compute / storage resources, connectivity, and power: