Blockchain Use-case: Internet Of Things
IoT or Internet of Things is an interconnected network of
smart devices that include everything from our phones, baby monitors, fridges,
front door keys etc. Increasingly, these devices are becoming integrated into our
lives. According to Wikipedia, “The number of IoT devices increased 31%
year-over-year to 8.4 billion in 2017 and it is estimated that there will be 30
billion devices by 2020. The global market value of IoT is projected to reach
$7.1 trillion by 2020”. There are already lots of examples of IoT
networks in use today. One welcomed example of an IoT smart device is the
Petnet Smart Pet Feeder. This device allows us to automate the feeding of our
pets. It is able to determine which is the best type of food for your dog or
cat and order it via online stores.
The feeder will then automate
the amount and times when your pet can eat according to what is best for it.
This device can be controlled via any smartphone so owners can ensure that
their pet is being fed even if they are halfway around the world on holiday.
Now that we have a clear
understanding of what IoT and blockchain are all about, we can take a closer
look at how these two technologies can be used in parallel to create exciting
new software solutions.
Since the main selling point of
blockchain is security, I will start by looking at how using blockchain to
secure the internet of things will make many of the apps we use in the future
safer and more secure from cyber-attacks.
Security
Using blockchain with IoT stands
to benefit applications enormously. Current applications rely on the
client-server model in order to function. In essence, this means that all
devices are connected to one central authority that controls the network and
data.
Time and time again, this
central flaw to this model has allowed hackers to gain control of networks
and steal data and even access webcams and speakerphones in people‘s
homes. The blockchain model would
prevent such attacks from happening. Since a decentralized database would
remove any one point of weakness attackers would have to target individual
nodes on the network instead.
Any attack on an individual node
on the network would also be futile as all the other nodes would resist any
attempt to alter the data. Since data is held in a blockchain is secured
by cryptography it is much safer
than with a traditional client-server database.
Increased Speed
of Transactions
Another advantage of employing
blockchain solutions to IoT networks is the potential to increase the speed of
transactions. This advantage is very specific to the use case to which it is
applied. Bitcoin transactions, for
example, takes longer than VISA because of limited network speeds. Since
each participant on the network is required to validate transactions rather
than one single entity, these kinds of straightforward transactions are faster
with the client-server model.
It is when the transactions
become more complex than an IoT application using blockchain technology can
really shine. The implementation of smart contracts will allow multiple
resulting actions to occur automatically.
A future version of the Petnet
Smart Pet Feeder will be far more independent. The entire process of automating
every aspect of feeding your pet could be done by the feeder. While the current model can
reorder food, a future version would be able to employ smart contracts to
initiate payments to the online store without the need to involve the owner.
Once the goods were received, the feeder could be refilled at which time the entire
process would begin again.
Automation would allow more
complex transactions to take place instantaneously. This has enormous benefits
for IoT users.
Reduced Costs
While there is still much debate
regarding the true cost of blockchain databases (in several countries the cost
of mining a single Bitcoin currently exceeds $10,000),
the overall consensus is that IoT networks costs would be reduced
significantly.
The biggest reduction in costs
will come from removing intermediaries and automating more complex
transactions. Smart contracts only require relatively small “gas” fees to
automate many of the processes that currently take time-consuming human
intervention.
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