Blockchain and IoT examples

The Internet of Things is such a broad and confusing space, with so much potential impact in business, society and home life, that talking about it feels a bit like talking about the universe. After all, what isn’t a “thing” that can be connected to the Internet? When we’re referring to the Internet of Things, do we include our smartphones? Our cars? Our televisions? What about our satellites and our aeroplanes? Our 3d printers and our factory robots? And getting metaphysical on the issue, what about Facebook pages? Video games? Bank accounts? They’re things too, right? But to bring the discussion of the impact of the Internet of Things into the realm of practicality, most studies and businesses focus on gadgets, either big or small. The smartphone is so obviously a thing connected to the Internet that it is usually not featured in the sector studies, except as a conduit for information from other things. The same goes for computers and sensors. Those obviously-connected devices are what we embed in physical things to get them talking to us and to each other. So, when we refer to the “Internet of Things”, or IoT, we’re really talking about things connected via other things. Sensors, computers and phones talking to each other is the backbone of today’s development. But it’s not new and it’s not news. It’s what those sensors, computers and phones are talking about, what data they are transmitting and what objects they represent, that is of interest.

by Todd Quackenbush for Unsplash - blockchain and IoT
by Todd Quackenbush for Unsplash

For this discussion, I’m just focussing on physical gadgets not related to transport, the supply chain or to the energy sector (there’s so much going on there that we have the basis for a separate series of studies). While IoT is already a reality, its impact so far has been useful but fragmented, more an indication of what’s possible tomorrow than what we can change today. Blockchain technology is increasingly looking like a potential unifier for the different device-specific, manufacturer-specific and sector-specific networks currently in operation or under development. Yet its application is still fraught with obstacles and issues, most of which will be overcome with experimentation and creativity. Here I look at some of the more advanced projects participating in this journey – I fully expect that we’ll be hearing more from them in the months to come, as well as adding interesting newcomers to the list.

As with most blockchain activity these days, experimentation in the Internet of Things space is not limited to startups. In one of the first major papers on the subject, at the beginning of 2015 IBM revealed ADEPT (Autonomous Decentralized Peer-to-Peer Telemetry), a proof-of-concept of a universal IoT blockchain platform that combines P2P messaging, BitTorrent and Ethereum. Two interesting case studies were included: a washing machine that can manage its supply of detergent, self-diagnose and solve maintenance issues, and “negotiate” with other household devices the optimum time for an energy-consuming cycle run; and electronic billboards that manage, allocate and automatically charge for ad display. The proof-of-concept code was supposed to be shared on GitHub, although as far as I can tell it hasn’t yet, perhaps because the project leader left IBM at around the time of the paper release. IBM have certainly not been idle, though, and a few months ago revealed that they are working on combining the blockchain with Artificial Intelligence to manage IoT ownership, access and diagnostics. This is part of IBM’s commitment, announced in March 2015, to invest $3bn in the Internet of Things. Yes, that’s billion with a b. This should be fascinating.

One of the best-funded startups in the blockchain + IoT area is US-based Filament, which has received $7.35m in investment from VCs such as Bullpen, Pantera, Verizon, Crosslink, Samsung, Digital Currency Group and others. Its focus is long-range wireless networks, and its main product is the Tap, a device registered on the blockchain with environmental sensors that can integrate with other sensors, and which has a wireless range of over 15km that does not depend on wifi or cellular networks. These sensors help farmers to monitor soil quality, cities to control outdoor lighting, and vending machine operators to optimize inventory, among a host of other potential applications. While most uses at the moment do not need universal registry, the blockchain base will enable connectivity in the future, which will encourage the development of additional efficiencies and possibilities. Running on the bitcoin blockchain allows for micro-transactions, which will open up the project to a wide range of new business models. And if things are going to talk to and transact with each other, they’re going to need Filament’s blockchain-based help with decentralized identity creation for inanimate objects. The Patch, their other main product, is an embeddable version of the Tap that adds wireless connectivity to any hardware. Filament is one of the most advanced IoT and blockchain companies, in that it actually has paying clients and a seemingly viable business model: it owns the sensors, and charges for the configuration, the data, the maintenance and the updates.

IOTA approaches the issue from the other direction. Instead of focussing on the devices, it has created a cryptocurrency to facilitate micro-transactions between devices. Rather than a heavy blockchain, though, it runs on a lightweight “Tangle”, a “block-less” distributed ledger that makes it possible to transact without fees. Tangle doesn’t have miners that need incentivizing, but “verifiers” that are also users. They process transactions as they use the network, which allows for transactions at no cost, ideal for the high-frequency, low-value, light and constant transactions of the Internet of Things. Technically IOTA does not use a blockchain, but I include it here for its decentralized, trust-less approach to the exchange of value, and its innovative approach to the sticky problem of micro-transactions (still relatively expensive, even on the blockchain), both of which could put the goal of a viable and efficient Machine Economy within reach.

Chainofthings focusses on the security of the data collected and uploaded by the Internet of Things. Run as a consortium composed of several startups and established businesses active in the IoT and blockchain space, it supports and collates research and organizes events designed to promote solutions-based exploration. Participants and supporters include blockchains Ethereum, Lisk and Emercoin; IoT startups Filament and IOTA (mentioned above); blockchain businesses Skuchain and Everstore; bitcoin node hardware manufacturer Bitseed; solar power startups SolCrypto, SolarCoin and ElectriCChain; advisory businesses such as Zerado and Neuroware; and large international conglomerates such as electricity company RWE. Its first case study, revealed at a recent Chainofthings event in London, looked at the application of distributed ledgers to solar power generation, and the next one will focus on sensor mobility.

UniquID is a young project that was first presented at the Consensus conference in May 2016. Based in the US and in Italy, it allows users (still in beta) to create a private blockchain which acts like a sort of “wallet”, on which they can register their devices. All devices registered on that blockchain can communicate with each other, without the need for external authentication. Access to these “wallets” could be from a range of configured devices, which would give flexibility to the format and the deployment of these “local” IoT networks. Unlike other efforts in the sector, UniquID’s idea seems to be to maintain the separation of IoT networks, and it remains to be seen how this is better than a simpler database approach.

Riddle&Code is another young project in development, with an interesting twist. According to its website, the platform “connects blockchain technology to real world objects”, which is what most participants in the sector want to do. The twist is that it uses NFC technology that permits the secret exchange of data and of the cryptographic keys that determine who can access that data.

As you can see, the intersection of blockchain and the Internet of Things is attracting attention, but not yet at the scale the potential warrants, and not yet with a “success story” business model (Filament seems to be on the right track, but there is little public information, and it’s still early days). The ideal balance between hardware and software, centralization and decentralization, complexity and convenience will be difficult to find. But it will emerge as the sector gets more competition and as the businesses move along the timeline from idea to implementation to revenues. This progress is worth encouraging, as the end results will not only open up new potential Internet of Things business models. They will also teach us even more about the potential and actual real-world applications of blockchain technology and its derivatives, which will lead to more innovation and creativity. It won’t be easy – there are many conceptual issues revolving around identity and data that will need to be addressed – but the most important things in history never are.

(If I’ve gotten anything wrong on any of the businesses mentioned, please let me know! I don’t ever want to mis-represent a company or an individual, ever. A similar version of this post was published on LinkedIn. I twitter away at @NoelleInMadrid, come and say hi!)

How can the blockchain save the Internet of Things?

Have you ever been to one of those parties in which everyone is talking really loudly at the same time because the noise is such that they can’t tell that the other person’s talking? Let alone hear what they’re saying? Everyone is just shouting into the cacophonic mess of sound and pointlessness?

This isn’t the beginning of a bleak novel about contemporary society, but an apt metaphor for the Internet of Things (IoT). We’re seeing more and more items promising greater smartness all around. And yet we’re not really seeing the benefits of this smartness. I speak as someone who has found it easy to resist the pull of the smart wristband since I really don’t want someone telling me how many steps I need to take before lunch. And knowing how many I have taken wouldn’t make me smarter, just more burdened with guilt, or triumphant with empty victory, depending on the day.

While some gadgets may be useful, many do not compensate the additional hassle with enough additional information to really make a difference. I love the idea of smart lightbulbs. But turning the light on and off was never really very taxing. I wouldn’t say no to a smart toaster. But burnt toast is not the bane of my life. And for a good chuckle, check out WePutAChipInIt.

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A large part of the pointlessness and the noise is due to the limitations of current IoT platforms. We hear a lot about how the Internet of Things will change our daily lives, change our relationship with things, change society… Your connected humidity detector, door lock, refrigerator and mattress not only try to fit into your lifestyle, they also try to feed you (and others) information about that lifestyle. More information than you can possibly absorb (unless you are obsessed with self-quantification, I suppose), and delivered via a multitude of apps in a multitude of formats. Today’s gadgets don’t really talk to each other. The sector is built around hundreds of different systems, each with different interfaces and data sets. And your wristband knows that you’ve had a really hard day but it can’t transmit that information to your stereo so that it can pipe relaxing music through the connected speakers. Your refrigerator knows that you’re low on milk but it can’t coordinate that purchase with your washing machine’s need for detergent.

The Internet of Things is full of efficient if slightly obsessed potential. But until we can start to unify systems and coordinate value, it’s not going to give us the revolution that it promises. APIs and sharing agreements that connect affiliated products are convenient patches, but will always be platform-specific and vertically integrated, rather than universal and horizontal. We end up with atomized services in which we eventually lose interest when something even more compelling and colourful comes along.

We need to figure out how the devices and the gadgets can coordinate, compare and collate the information that we actually can use to improve our productivity and quality of life. We need to find a way to unite the various systems into a compelling web of services that seamlessly runs in the background while we enjoy our enhanced performance and time management. We need to find a way to get our things to talk to each other more than they talk to us. Only then will they work for us, rather than us for them.

Enter: the blockchain.

By now you probably know how the blockchain works (if not, see here). How can the blockchain help with IoT?

In standard IoT devices, embedded sensors track activity, and relay the relevant information through wireless connections to the relevant database or file system, where it is then parsed, formatted and either presented or enacted upon. But the information stays within the device’s network. What if the information could be relayed to the blockchain, where it is combined with information from all the other devices in your life? As well as information from other devices in other people’s lives?

by Tracy Thomas for Unsplash
by Tracy Thomas for Unsplash

Before you cry “Privacy!”, the collective information shared does not have to belong to a personal identity. It could instead be associated with certain parameters (male, young, lives in Frankfurt) that could help to decipher aspects of human behaviour. Collective information about our lifestyle combined with data about our interaction with products and services would enable businesses and institutions to improve design and processes, especially if that information could be shared (again, without “full identity” attached). The economic value of this data exchange and the redistribution of that value could form the basis of a re-thinking of business models and even public finances, but that’s a topic for a different debate.

Back to the blockchain… The technology allows for decentralized sharing of data between participants. It also ensures that the data cannot be falsified or changed. Both of these factors are crucial to the development of a useful IoT network. Decentralized distribution will mean greater engagement, lower costs, greater efficiency and a broader application. And immutable data implies trust, a base requirement for effective use of that data. Machine-to-machine communication could start to replace some human-to-machine communication. That is not as scary as it might seem. Do you really need to be the one to call the dishwasher maintenance guy? Or could your dishwasher do it for you? With decentralization, and no need for trust, you would have a choice of maintenance options, or you could let your machine choose the most economical or fastest option.

Decentralized sharing and immutable data combined with algorithmic options could also lead to a more efficient usage of excess capacity. Driverless cars automatically re-routing according to need. Airplane parts being 3d-printed and shipped directly to where they are needed, rather than sitting in a warehouse. Containers on ships sharing space with other manufacturers, lowering the price of transport.

With distributed data, the end use would be up to the participants. We could have a mixture of private and public entities, each with different objectives, pulling the information that they need for their purposes. A wider choice of information available, with greater applicability and personalization, at a lower overall cost.

And since sensors are much better at multitasking than us humans are, the gain in efficiency would not be a one-time thing, but an exponential improvement in productivity. Sensors embedded in products could also multi-task as tracking devices, ensuring that the microwave, car or computer moves from assembly to final client with a smoother blockchain-based exchange of bills of trade, shipping documentation and sales slips. Fewer delays, less cost overhead and greater transparency… The retailer and the final client would know where the purchase was at any given time, as well as where it was put together and where its components were sourced from.

Imagine sensors embedded into containers of non-IoT items, offering the same trade efficiencies and transparencies by making the containers easy to track and process. Payments could become automatic upon sensor confirmation that the container had reached a certain destination, removing uncertainty, the need for collateral and potential delays. The cost savings of lower overhead and faster delivery could be shared between the manufacturers, the facilitators and the final client, improving economic activity and generating even more trade.

Municipal sensors are already starting to make the concept of smart cities a reality, although the adoption is so far limited and slow. Imagine the impact a blockchain system could have on this potential. Imagine a network of closed data silos opening up to developers from both the public and private sector, as well as to city planners, academics, economists and entrepreneurs, accessible to all but corruptible by no-one, with no single point of failure. Real-time data from real life collective activity, being applied in practical and creative ways.

The potential of IoT technology is exciting, but so far has shown no signs of being able to live up to the hype. Brilliant minds have been and are still coming up with ingenious applications, and the innovation is, well, a lot of fun. But simply enabling connectivity does not necessarily make a device smarter, or us, for that matter. And the noise and overcrowding in our already overloaded attention spans is already starting to drown out the possibility of IoT achieving its full promise. With the application of blockchain technology, however, not only could it start to do so, but it could open up areas of opportunity that even the optimists have not yet seen. New marketplaces, new efficiencies, new business models and economies of scale… Decentralized, distributed networks that allow collaboration and communication between machines, with benefits enjoyed by humans, would create a base from which we could amplify the content and transaction networks of today and reach new levels of productivity. So, it’s not so much a question of the blockchain helping IoT. We need the blockchain to step in and save it.

(This post was originally published on LinkedIn.)