Blockchain technology is maturing to improve IoT security and monetization

Rage Comment : The Internet of Things is considered to be most closely related to blockchain, and the U.S. Department of Homeland Security has also allocated funds to Factom to develop blockchain applications in the Internet of Things. Obviously, the potential of blockchain to reshape the Internet of Things has become a global consensus, but it is still unclear what kind of chemical reaction the two will produce. However, experts believe that blockchain technology has matured and can be integrated into many areas of the Internet of Things.

Translation: Annie_Xu

Experts say blockchain technology can already be used to secure and monetize the Internet of Things.

One example comes from the Isle of Man, a self-governing region independent of the United Kingdom, which is trying to defend itself against IoT hacking using a blockchain prototype.

The Isle of Man is a financial center that hopes to expand its service projects with Internet financial technology. Currently, the Isle of Man has participated in the digital currency project. Craig Bachman, a participant in the Open Digital Program project of TM Forum, said that blockchain can also increase the security, privacy and micropayment functions of devices and sensors.

What is blockchain?

For those who need to understand this revolutionary verification and transaction system, blockchain is a secure database, or ledger, distributed across a network.

The nodes of this network all hold a copy of an encrypted database, adding new records using complex hashing functions. These records are stored in blocks, firmly linked to the previous block, hence the name blockchain.

The database maintained by each node contains the complete transaction history, so there is no need for a central database. The security of the records is partly due to the fact that no one person can manipulate them; the data is replicated to all nodes and cannot be modified without the key.

Perhaps one of the most important elements is the indelible record of all transactions and events, which prevents fraud because any unusual activity will be obvious.

Blockchain ledger system for IoT devices

In the Isle of Man case, blockchain startup Credits worked with the government to develop a blockchain-based distributed ledger system to assign and manage unique digital identities for the Internet of Things.

Nick Williamson

Nick Williamson, CEO and co-founder of Credits, said the idea behind the system is to "assign unique, unforgeable identities to physical objects. Blockchain provides a way to manage and maintain those identities."

That is, first register the IoT devices and then use blockchain technology to provide identity verification.

The monetization of IoT is another area, and also a topic of Bachman's blog post.

Alex Tapscott and Don Tapscott, authors of Blockchain Revolution, said in a Bachman blog post, "The Internet of Things needs a ledger, which is the Ledger of Things. It is necessary to record the communication objects in the Internet of Things, the lending and borrowing of currency, and coordinate the relationships between them."

Bachman said the Internet of Things' myriad sensors could be monetized through micropayments.

For example, contract review and execution according to service level agreements are implemented because sensors and chips are configured.

It is conceivable that the Internet of Things will eventually become one of trillions of devices, so a method needs to be designed to audit trillions of micro transactions. Bachman said that blockchain can "record data while ensuring that these records cannot be tampered with." Therefore, this is a good choice.

Services that bind IoT devices and sensors, timestamps, and digital assets such as music and intellectual property may be a good fit for blockchain technology

Interestingly, most timestamping by global banks etc. uses atomic clocks from the GPS system. It’s just that civilian grade GPS is not verified, so it can take advantage of the inherent fraud detection capabilities of blockchain.

Elections, public auditing of ballots, and even banking could be ideal applications for blockchain.