Opinion: Why the blockchain is the missing link in the effective application of the Internet of things

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Opinion: Why the blockchain is the missing link in the effective application of the Internet of things

Maciej Kranz, Vice President of strategic innovation division of Cisco Systems and one of the world’s leading experts in the field of Internet of things (IoT). In the article, the original of which is published on the website Networkworld, Krantz describes the potential of joint use of the blockchain technology and IOT.

Talk about the blockchain, for example, in the office kitchen — and the discussion almost inevitably will be reduced to crypto-currencies and hidden transactions. But blockchain is more than serbezovski digital financial register and are surrounded by hype new technology.

In combination with the Internet of things (IoT) blockchain creates new advantages and business model, which helps to ensure transparency during data transmission and to cope with the challenges associated with the complexity and safety. In many ways, the blockchain — the missing link, which will allow to realize the potential of the various usage scenarios of IoT.

What is the blockchain

Before delving into this subject, let’s start with definitions. First of all, the blockchain is a distributed registry that allows multiple parties to conduct effective accounting transactions, reliable and immutable. Recorded in the blockchain data can’t be manipulated. Thus, the blockchain becomes a single source of accurate information about transactions, eliminating the need for verification by a third party. Everything is quite simple.

IoT and blockchain

So how does the blockchain associated with IoT? The business value of IoT is determined by the data create the associated device. These data can be analysed and transformed into solutions to improve certain aspects of operating activity, as well as to create new competitive offerings, and markets. For example, analyzing the data streams from connected within IoT machines in the shop, you can optimize a preventive maintenance system and enjoy a longer time of continuous operation.

In many scenarios of use of IoT data is beyond the scope of individual organizations and even corporations that allows you to see the global picture of operations. The question is how to ensure that the data was consistent, reliable and trustworthy. Validation of such data requires time, particularly if carried out manually and involves the processing of data sets derived from disparate sources, which often do not correspond to each other.

It is here that the can help the blockchain. As already mentioned, it provides an unobstructed, permanent, and decentralized data entry of IoT, coming from different devices and even in the framework of cooperation of entire organizations. Let’s look at some usage scenarios.

Usage scenarios of IoT and blockchain

Let’s start with the supply chain. In such a complex and multi-layered ecosystems blackany will help in solving many problems of recording the movement and origin of the goods. This will become less counterfeit, cases of a product recall and even diseases caused by defective products.

Counterfeit products is a serious problem in many industries. In only one industry, semiconductor manufacturing counterfeit costs us chip manufacturers $7.5 billion a year. Using blockchain technology, they can track the movement of chips through the supply chain. If there is a suspicion that the chip is fake the manufacturer is able to test them, and find out at what stage appeared counterfeit. The same method applies in the case of defective products.

Similarly, you can use the blockchain in the food industry to trace the origin of defective products, preventing damage to health and the removal of products from the trade.

Critical speed of reconciliation of transaction data, allows manufacturers and distributors of products to control your supply chain in real time.

The Department store chain Walmart has demonstrated the use of this scheme in practice, tracing the path of the packaging of mangoes from the counter to the farm where the fruit was grown. With bloccano and IoT process took only 2.2 seconds, whereas traditional digital and paper-based methods would require a week.

The scope of the blockchain in combination with IoT is not so limited. Take, for example, medical records. With instant viewing securely recorded and stored medical history of the patient doctors can be sure that they do not prescribe medications that negatively affect the patient, based on current or past medical conditions. Such a scenario will improve the results of treatment.

In addition, the blockchain could strengthen privacy protection decentralize personal data stored in different repositories, giving users the ability to know who requested access to them. With regard to new business models, using the blockchain you can make micropayments, allowing the services to reduce transaction fees, reduce the term of their implementation and creating a transparent and fair system of payment distribution. Example that uses micropayments, industry the music streaming.

What’s next?

The author touched only the most obvious possibilities of the blockchain, especially in combination with the IoT. And the future of this technology is impressive. It is expected that by 2024, the global market for blockchain technology is estimated at $7,59 billion with a combined annual growth rate of 37.2%. However, most current blockchain projects are still in the stages of technology research and proof of concept.

To meet the demands of the market, it is necessary to build industry solutions using technologies that will ensure the interaction of different parameters blockchain networks. Such solutions must be scalable and provide flexibility in the application, the confidentiality of information and powerful protection along with Analytics, allowing you to anticipate threats and to control possible problems.

And, of course, they should provide good results in the real world. Specialists in IoT is to examine how you can apply the blockchain in their data streams, and specific scenarios to determine the suitability of this technology to solve their problems — perhaps this is the missing link, without which it is not possible to realize the potential of IoT fully.

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