Blockchain, IoT’s Missing Link?
The Internet of Things (IoT) is one of those important technological developments on which the digitial transformation process is based. Studies that predict an extremely rapid expansion frequently see the daylight, but in the real world the IoT technologies' trayectory can be compared to that of a boomerang.
First of all, the gathering and processing of data in an IoT project used to take place in closed envirnoments. Later, sensors became cheaper and advances in communication protocols permitted a broadening of the range of environments in which they could operate. This enabled basic devices to aggregate data from multiple sources in open environments. With the application of advanced analytics, the power of “intelligence” and the development of APIs a variety of use cases emerged.
It is true that the application of IoT keeps growing every year. However, the real expansion is - once again - happening within closed environments. Companies are capitalising on the IoT opportunity, but at the same time keeping their data protected, without considering the possibility of sharing them or turning them into a new line of business. This results in limited insights into the IoT developments that are taking place and for what exact purposes they are actually implemented, and also hampers a homogenous evolution. While economic sectors like industry progresses fast in the area of IoT, the adoption is much slower in the more open, collaborative and innovative environments and settings.
There are two main explanations to this, and that both act as effective barriers: the great concerns about the security of data stored in the cloud and also the challenge of creating new business models in the digital era with the backdrop of traditional burocracy inherited from the analog business world.
Blockchain, an enabler for the development of IoT
At this stage, a technology like Blockchain, that offers security, thrust, intelligence and decentralisation could be the one factor that enables IoT to really take off.
Blockchain improves the peer-to-peer business model that is on the rise. Adding the concept of blocks, each of these encrypted, and then distributed to thousands of nodes participating in the chain, blockchain constitutes a robust system that keesp data secure. Also, thanks to its smart contracts system, the creation of new business models is made easy and flexible.
The smart contracts are like a set of services that defines the rules and policies that give access to the information in each block. In a simple process, when a service is looking for a certain block’s information it requests the data stored within and then decides whether it agrees or not to consent to the conditions for accesss. Thus blockchain renders the power to the owner of the data.
By employing the Blockchain technology, each and every device that is connected to the Internet may turn into a information generator, all while the control with and security of the data are maintained. Then if a smart contract is applied to the connected object in question, the data it stores may be commercially exploited in a safe way.
While in traditional, more burocratic environments the launch of a new service may take months, Blockchain technology will enable the creation of new businesses that might only make sense in a specific moment and during a limited time span. This is a clear example of how innovation may facilitate new business initiatives.
Definitely, blockchain could turn into the technology that makes IoT develop further within open environments, as it offers a homogenous layer of security, thrust and intelligence that at this moment is necessary in order to facilitate the emergence of new services and applications.
Josep Balaguer is Blue Telecom Consulting's Sales Director
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