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There is no doubt that blockchain will continue to grow and impact many industries. While most applications revolve around monitoring transactions and verifying data, there are also developers who integrate blockchain into internet-connected devices (aka the Internet of Things; IoTs).
With connected devices, cities, homes, factories, stores, schools, and hospitals can be improved. For example, smart door locks allow you to grant access to friends or family members and track who comes and goes; sensors in your home alert you if windows or doors have been opened when they shouldn’t have been; you can get alerts if something needs to be replaced before it goes bad, if something has been broken or stolen, etc., with smart appliances like the fridge. Adding connectivity isn’t just about making things “smart”, but rather taking them to the next level.
However, there is a concern about security breaches. In the vast majority of cases, connected devices are centralized, which means if attackers manages to penetrate smart devices or their server, it opens the door to a whole network of hacking and breaches. Imagine a situation in which your smart door lock maker has been hacked so that hackers have access to your door lock.
First, let’s talk about what blockchain is and how it works. In a nutshell, you can think of it as a giant spreadsheet that is duplicated thousands of times across a network of computers. A blockchain is a distributed ledger or decentralized database that stores and verifies data. Blockchains are composed of many blocks of data linked by timestamps and links to previous blocks. The data in each block is encrypted, and the entire chain is replicated across thousands of computers, or nodes, in a decentralized network. Since blockchains are encrypted and replicated, they are extremely secure, and since they are decentralized, no single entity can control them.
In a blockchain IoT network, each device is an autonomous participant (node) on the network. This setup makes it extremely difficult for hackers to compromise the network, since they would need to break into each device in order to access the network. Businesses can also harness the power of blockchain tokens or smart contracts to automate certain business workflow or functions.
Samsung has recently announced the implementation of a “private blockchain” system to their smart devices. It will be the extension of their security platform Knox Matrix.
Samsung didn’t disclose much except that they will release a unified security SDK for their blockchain solution. We expect the unified security SDK to work across different operating systems and provide a secure credential for multiple cross-devices. In one word, Samsung’s unified security SDK is a cross-device authentication system that enables easy, secure logins to different devices with blockchain.
There are several challenges associated with blockchain integration with IoT devices. The data that is being collected and accessed by the device should be validated so that it can be approved and put on the blockchain. It means it should be scalable so thousands of devices can be synced pretty quickly. Also, since the data cannot be edited on the blockchain, some users or devices do not always want it to be under the blockchain. Therefore, some organizations or end users want to decide whether to join the blockchain network.
There is also a challenge in finding a suitable consensus mechanism. This refers to how nodes on the blockchain reach agreement on new transactions. Ideally, the consensus mechanism should be secure, decentralized and scalable.
Most blockchain IoT networks are permissioned(private). This approach enables organizations to create a blockchain network that serves as a single source of truth for IoT devices. Sensors, cameras, databases and other devices can be added to the blockchain network, enabling real-time data analytics, improved operational efficiency and other business benefits.
Private blockchain for IoT seems great from a privacy and security standpoint. But there’s a fundamental drawback that it can be another obsolete and fragmented blockchain controlled by a single entity. At some point, it can cause security issues caused by outside attackers due to lack of transparency. As I write this article, Microsoft announced that a recent data breach exposed customers’ emails and contact details. That’s a fundamental risk on any centralized system.
A better approach would be to make the smart device open source under public chain and funded by manufacturers but not controlled by them — which is a decision made by the blockchain developers. DAOs can support smart device owners and control their device’s blockchain network. Making a hybrid of public chain and private data handling could be the ultimate solution. The concept is similar to the benefits of hybrid cloud.
The blockchain has given rise to a large number of novel business models and services, and consequently it may have a big impact on IoTs. Smart devices might be able to communicate autonomously and verify one another, as well as share data in real time over blockchain network. Bottom line — Businesses with IoTs can benefit from blockchain’s efficiency, transparency, and decentralized workflow process by adopting the proper type of blockchain with a consensus algorithm, development and deployment strategies.
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