How blockchain may secure the next generation of IoT services
Life in the Information Age undoubtedly provides us with a vast range of advantages. Digital technology and services ranging from online banking to telematics insurance products, e-health and online shopping, have markedly improved our quality of life. Things are simpler, quicker and less expensive and thanks to technology, we enjoy the benefits of the knowledge society, an era in which information of every kind is available at the touch of a fingertip. Indeed, the entire economy is now largely digital, and the evolution of technology has become the driving force behind our social and cultural evolution.
Internet of Things
Today, the Internet of Things interconnects our many digital devices with the domotics systems in our houses and offices, intelligentvehicles (soon to become autonomous) and the quickly developing infrastructure of smart cities.
Gartner estimates that there are over 5 billion devices connected to the Internet of Things, excluding computers. And this figure will rise to 20 billion by 2020. “Research and Markets” posits that this increase will drive the reference market value from today’s US$157 billion to US$661 billion in just five years’ time.
Cyber Security
Unfortunately, the Information Age has also introduced a new form of crime, cybercrime, which is conducted through the diffusion of viruses, Trojan horses and other forms of malware, as well as the risk of cyber-terrorism. All of these new menaces have evolved symbiotically with the development of the ICT systems that control and connect virtually every aspect of our world. This risk threatens not only our personal information, but also all on-line public and private databases, digital rights management systems, financial and banking systems, utility and transportation networks, and governments around the globe.
In May 2017, the “WannaCry” cyber-attack – the largest global cyber-attack registered to date – crippled 200,000 computers in more than 150 countries around the world, including 48 hospitals in the United Kingdom and various multi-nationals operating out of Europe, America and Asia. It was the largest admonishment to date about the need to improve our cyber-security standards.
Blockchain
Cybersecurity systems, which are based on cryptographic measures that protect hardware devices and software systems from undesired intrusions, have become fundamental in our day and age. Researchers and experts continue to update and devise new systems to stay abreast of the latest digital threats developed by hackers, cyber-criminals and rogue states around the world. Recently, however, a somewhat older system is garnering attention: blockchain.
Blockchain, which was originally developed in the early nineties, has recently risen to global prominence thanks to the growing interest in bitcoin and other cryptocurrencies, as it has proven to be a particularly secure system for the protection of information.
Basically, a blockchain is a list of records, called blocks, which are linked and jointly secured through cryptographic codes. Each block of information in a blockchain, also referred to as a distributed ledger system, contains a cryptographic hash of the previous block, a time stamp and specific information. Once this data has been recorded in any given block, it cannot be altered without receiving permission to modify all the blocks created subsequently in the chain. Thus, the system is inherently resistant and tamper-proof; so much so that researchers are looking to adopt it in a number of sectors.
Future Applications for Blockchain
Blockchain is not only ideal to secure various levels of protection for the big data which drives the Internet of Things, but also provides great promise for supply chains and logistics in a wide range of sectors and specific applications. Moreover, its proven ability to secure peer-to-peer networks is of great interest.
Experts have recently posited that blockchain could also be employed in the following sectors:
- Insurance and Forecasting – Data science has become the cornerstone of what was once the realm of statistical analysis and forecasting. Today, insurance telematics faces the challenge of developing new analytic algorithms for pattern recognition that can mine and provide meaning to the vast ocean of available big data. Once the data has been mined and crunched, insurance companies can use the results to develop a wide range of predictive models and custom-tailored pricing schemes based on a wide range of parameters and predictions. Blockchain is not only an excellent system for securing information and preserving its anonymity but can also be used to decentralise prediction markets, just as it has decentralised payments and financial transactions.
- Health Care and Research – the more data is available the better doctors can make diagnoses and researchers can draw conclusions. However, this is exactly the type of data that demands complete security. Blockchain is the perfect tool to provide fast and secure data transfers amongst patients, services, insurance companies and other health-related stakeholders and regulate the access level of each user.
- Energy Sector – the proven functionality of blockchain in peer-to-peer cryptocurrency platforms is perfectly suited to modern, distributed energy networks, that now allow individual citizens to commercialise privately produced solar energy. A blockchain-based system could regulate trade between private parties without having to rely on energy companies to act as middlemen in the transaction.
- Monitoring, Surveillance and Tracking – blockchain allows for the secure exchange of information and is thus perfectly adaptable to sensitive, private information that must be carefully controlled.
Indeed, in May 2017, the World Economic Forum published a white paper entitled “Realizing the Potential of Blockchain,” which described how the blockchain system has the “ability to generate unprecedented opportunities to create and trade value in society […] It will lead to a generational shift from an Internet of Information to a new-generation Internet of Value. This ability is based on the way blockchain leverages global peer-to-peer networks to guarantee the integrity of the value exchanged amongst billions of devices without the need for trusted third parties.”