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Blockchain Rising: Have You Considered Blockchain for Your IoT Strategy?
By Gavin Whitechurch, EVP Product & Strategy, KNect365 TMT
A cryptographical technology originally developed for financial applications, blockchain technology could ultimately be more valuable than the currency it supports, as the Harvard Business Review notes. One of its advantages lies in cybersecurity where it provides a fundamentally different approach to than the centralized client-server security architecture. It is a challenge to use a centralized secure model for a sizable network of IoT devices that can easily include tens of thousands or more of endpoints set across large areas. Such IoT deployments can overwhelm traditional network administrator professionals and are often difficult to secure with traditional IT security techniques. The startup Xage Security, for instance, is using blockchain in its industrial IoT security platform. But blockchain applications expand beyond security. Large enterprises like Microsoft, SAP, Ericsson, IBM and Maersk have made blockchain central initiatives.
The blockchain alternative
Blockchain, in contrast to the traditional client-server model approach, is a distributed ledger wherein transactions are verified and immutably recorded across the network, without a single central authority.
Adoption rates rising
Blockchain technology is top of mind for many enterprises, with companies like UPS, JPMorgan, Barclays, and Spotify already deploying or testing the technology. IoT World’s recent study, What’s Keeping IoT Executives up at Night in 2018, surveyed over 100 IoT executives and found that forty-six percent of respondents are currently considering the use of blockchain technology in their IoT security strategy. As blockchain adoption rises, it is important for companies to consider its benefits along with its limitations when planning for the implementation of an IoT security plan. Blockchain's decentralized nature, transparency, and tamper-resistant record give it an advantage in data integrity compared to a repository with a single source of control, which can become a single point of failure. Blockchain can be used to secure everything from voting information, medical records, and financial information. Even though the technology can prevent tampering once data has entered the distributed ledger, it is critical to ensure that the data that is entering the system in the first place is accurate and to ensure that no unauthorized parties gain control over the majority of the network hashrate—which is essentially the computing horsepower used to solve the cryptographic puzzles used to verify transactions.
Potentially broad benefits
For companies wanting to justify the investment in blockchain to support their IoT strategy, there are many benefits to consider. Our survey respondents valued blockchain’s ability to reduce the risk of collusion and tampering (15.05 percent), followed by building user trust with blockchain-based cryptography (13.98 percent) and accelerating transactions by reducing the settlement time from days to minutes or hours (12.9 percent).
Blockchain can be a powerful tool in helping organizations secure their IoT deployments and enable complementary services like proof of payment in IoT-related transactions and smart contracts, as well as providing transparency in supply chains. Additionally, blockchain can help ignite cross-sector collaboration and knowledge-sharing. A rising number of organizations are testing the power of distributed ledger technology for IoT deployments. It’s time to consider, and carefully explore, how blockchain might transform your business.