Over the last couple of months, more news on how distributed ledger solutions are being leveraged by major consumer brands started popping in the headlines. Turns out, for now fintech and banking solutions are blockchain darlings: American Express, Mastercard, Barclay’s — are all competing to get that patent first. How about other mainstream industries? Well, it looks like they are all still waiting for a killer Dapp. The mass market might have started testing the waters, but many do not know what they are doing, or even what it is.

Vitalik Buterin in his blog ‘ The Value of Blockchain Technology’ denies the entire notion of a ‘killer app’ on blockchain completely. “First, there will be no “killer app” for blockchain technology. The reason for this is simple: the doctrine of low-hanging fruit. If there existed some particular application for which Blockchain technology is massively superior to anything else for a significant portion of the infrastructure of modern society, then people would be loudly talking about it already,” Buterin explains. He does cede that perhaps there is a killer app out there that has already made its mark on Blockchain technology, and indeed, is being spoken about — loudly. “If you want to get more scalability, you can try to optimise the chain a bit, you can try to go up to 28, 50 or 100 but for real mainstream application you really need many thousands of transactions per second, to be flying around for lots of applications”, Buterin concluded.

Blockchain didn’t appear to be very efficient for IoT, and so far not a single company has been able to demonstrate successful implementation of blockchains with IoT. Public blockchain networks must first achieve a certain level of scalability to handle IoT networks. From the blockchain networks of IBM to the newly introduced Hashgraph technology, some of the largest technology and financial conglomerates have been testing the applicability and potential of blockchain with the Internet of Things (IoT) market since the beginning of 2016. Yet, with nearly $4 billion invested in blockchain research and development, not a single company has been able to demonstrate the successful integration of blockchain technology with IoT. Buterin also emphasized that for blockchain networks to handle IoT, they need to be able to process hundreds of thousands of data points per second. Plasma, an Ethereum scaling solution, could become a practical solution to the severe scalability issues of blockchain networks. It uses multiple blockchain networks that are interconnected with each other, and several aspects of transactions are kept confidential through the usage of Zcash’s ZK-SNARKs cryptographic system. This reduces the size of transactions and ultimately, increases the capacity of the blockchain.

Several technology conglomerates, such as IBM, are focused on developing centralized blockchain networks or permissioned ledgers. With the implementation of permissioned blockchain networks, there is a definite trade off between security and flexibility. Nevertheless, if we hope to implement blockchain technology with IoT in the near future, permissioned blockchain networks are the only realistic solution in terms of scalability. By 2018 it is likely that major blockchain consortia, such as Hyperledger, Ethereum Enterprise Alliance (EEA), R3CEV, and Axoni, will have attempted to introduce a number of permissioned ledgers to demonstrate the potential of blockchain technology in IoT. In the long term, public blockchain networks will very likely achieve the level of scalability needed to handle IoT networks. However, as Buterin explained, it will take least three to five years to get there.

Does this all mean we need to abandon the blockchain and IoT match made in heaven? Not necessarily, especially with potential value of IoT for further human/machine interaction. What if your office equipment knew when it was running low on supplies and automatically re-ordered more? What if your car knew where the nearest car shop was and drove itself there to get fixed? What if your fridge knew when it was running out of food and automatically purchased food at the closest grocery store? Or imagine a vending machine that can not only monitor and report its own stock, but can also arrange for the delivery of new items automatically based on the purchase history of its customers or their online reviews.

Same as with any other disruptive tech, as IoT opens the door to huge opportunities, it does also to many challenges — security being the biggest. With billions of devices connected together how can we be sure that their information stays secure? Blockchain technology has the potential to solve this in the same way it works for cryptocurrency: making sure that data is legitimate and the data processing is well-defined. Therefore, blockchain technology is still the missing link to maintain privacy and address reliability concerns of the IoT. Remember the example of a vending machine and a fridge? Machines might be smart, but for now they still need some human help when making a purchasing decision. Where would you turn to if you’re having difficulties when making a choice? Probably Yelp or Google reviews, but unfortunately these platforms are not able to deal with robotic requests. Moreover, it’s a proven fact that 60% of all the reviews are fake either ordered or generated by millions of bots. However, it looks like the challenge has now been accepted by Revain: customer reviews are based on human opinions and available for both human and robotic requests, which means that the machine sends the question and gets the answer as if it was a human request. So a vending machine will be able to go online, scroll down the reviews on chocolate bars and choose the one with the highest review rating. Plus reviews on Revain reviews can’t be faked or altered. This is truly revolutionary for the future machine communications and as we see technology is booming, so the application of these developments is truly universal.