Merging Blockchain and IoT: A Match Made in Heaven
December 3, 2017 1:15 by Rahul Nambiampurath
Merging Blockchain and IoT: A Match Made in Heaven
The Internet of Things (IoT) market has been on an upward trend in 2017. Those in the sector have been using the term as a catch-all phrase for everything from home automation to smart urban planning for a few years now. With an estimated 20.4 billion internet connected devices expected to be in use by 2020 though, many question the shortcomings that come with conventional implementations of IoT networks.
Tempering an Army of Machines
The sudden influx of smart devices poses new problems related to security and reliability, especially for items previously networkless. If, for instance, every household appliance relies on a connection to the internet, it would take no more than an ordinary hack to render most of them useless.
These machines also become vulnerable to breach as attackers can easily eavesdrop on the sensor data sent and received by Internet-connected devices. If companies can be incompetent enough to lack proper encryption for passwords, putting private data in their hands can be a recipe for disaster.
Not only do traditional IoT implementations lack essential security considerations, but they also suffer from the problem of centralization. In the case of a single point of failure for any large-scale IoT infrastructure, this also spells disaster for the functionality of these devices.
Following a server failure, for example, an entire army of smart devices is immediately crippled. Smart devices can become essentially worthless if a distributed denial of service (DDoS) attack is orchestrated against that central server. This is especially worrisome since DDoS attacks have affected multiple websites in recent years.
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The Blockchain to Soothe IoT Woes?
On the other hand, blockchain technology relies on peer-to-peer validation instead of a central, authoritative trust. Data on a blockchain is also cryptographically encrypted. In the IoT space, where every device communicates with each other, using a blockchain essentially negates all of the problems listed above.
Considering these advantages, it would appear as if the blockchain is the metaphorical knight in shining armor for IoT networks. The technology brings decentralization, multiple layers of redundancy, exponentially enhanced security and a multitude of other improvements that would require a more significant time and monetary expense to crack through traditional invasive hacks.
However, if blockchains are the definitive solution to all the problems IoT networks currently face, it is probably prudent to ask why it took several years of IoT evolution before any attempts were made to merge the two technologies together.
Looking Beyond Finance
The primary problem appears to stem from the relative infancy of the blockchain technology in general. Although its financial applications are well known, the advantages outside of the cryptocurrency territory are relatively unturned.
Bitcoin’s release in 2009 was the first practical application of a blockchain. In the case of digital currencies similar to bitcoin, blockchains are used as a public, decentralized ledger to record transactions in a secure, immutable manner. Since Bitcoin’s release, businesses have attempted to integrate blockchains into nearly every industry, from agriculture to logistics. Startups have also begun cropping up en masse, bringing with them a seemingly infinite supply of new Initial Coin Offerings (ICOs).
It is possible, after all, that the marriage of the blockchain and IoT has already begun at several companies. But as we inch closer to a future where everything is connected to the internet, it is now clear that blockchain technology will play a pivotal role in achieving increased security, reliability and trust in IoT networks. [Reply]
Food for thought and why I'm more comfortable buying bitcoin stock instead of bitcoin:
The US Federal Reserve issues a warning, urging that measures may need to be taken in the future to prevent financial instability if more money is invested in Bitcoin.
The US Federal Reserve has issued a warning stating digital currencies, specifically Bitcoin, pose “financial stability risks.” The news preceded a 10% reduction in Bitcoin’s price on Friday, which has since recovered over the course of the weekend to resume all-time high levels as the price hovers in the region of $11,000. The warning was prefixed by a statement citing that digital currencies, such as Bitcoin, do not yet pose major concerns at their current levels of use.
Randy Quarles, the Fed vice-chairman of supervision, said:
More serious financial stability issues may result if they achieve wide-scale usage. (Digital currencies are a) niche product that sometimes garners large headlines. (It) has no intrinsic value, is not the liability of a regulated banking institution, and in leading cases, is not the liability of any institution. Indeed, how to treat and define this new asset is complicated.
US DOLLAR RELIANCE?
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Randy Quarles went on to say that an economic system could be greatly challenged by liquidity and credit risks brought about by a lack of a stable exchange rate between cryptocurrency, such as Bitcoin, and the US dollar in times of adversity.
Given that Bitcoin specifically is seen as a potential successor to the US dollar, why would anyone want to exchange a dominant, backed currency for fiat currency that’s backed by government decree? It’s an arrogant statement from the Federal Reserve, but perhaps for speculators eager to exchange Bitcoin for US dollar profit, it may just scare them into thinking, or at least an awareness of, that a sudden crash in Bitcoin’s value might mean they will be unable to exchange it for USD rather than flip it onto the next man. It’s a short-term view, and yes, Bitcoin currently has no real advantage in the wider retail sector for payment, but as a cross-border method of payment, it excels. Also as a store of value, coming from a limited supply, its value is set to appreciate, especially if growth on a wider scale of retail acceptance is factored in. After all, if more people are investing in record numbers, then it only makes sense that they may wish to use it for payments rather than as an investment or store of value vehicle.
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For the Federal Reserve, as with the Chinese government, they serve a role in protecting the average citizen, to warn them of danger. Anyone looking to make a short-term profit from Bitcoin should seriously consider other less volatile options. Members of the financial sector have already warned that investors would seem to be only wanting to sell their Bitcoin to the next person, the bigger fool theory, rather than invest in it for its future value or technological worth. Perhaps those investors then really should steer clear. [Reply]
The Blockchain to Soothe IoT Woes?
On the other hand, blockchain technology relies on peer-to-peer validation instead of a central, authoritative trust. Data on a blockchain is also cryptographically encrypted. In the IoT space, where every device communicates with each other, using a blockchain essentially negates all of the problems listed above
this is just not true.
blockchain does not create or eliminate trust. It merely converts trust from one form to another. While we previously had to trust financial institutions to verify transactions, with the blockchain we have to trust the technology and the peer itself.
Peers can be compromised. There are already rumors of man in the middle exploits being on the cusp of release.
There is no chance in hell block chain will be mainstreamed without an authoritive 3rd party between the transactions and peers. [Reply]
Originally Posted by Hog's Gone Fishin:
Food for thought and why I'm more comfortable buying bitcoin stock instead of bitcoin:
The US Federal Reserve issues a warning, urging that measures may need to be taken in the future to prevent financial instability if more money is invested in Bitcoin.
The US Federal Reserve has issued a warning stating digital currencies, specifically Bitcoin, pose “financial stability risks.” The news preceded a 10% reduction in Bitcoin’s price on Friday, which has since recovered over the course of the weekend to resume all-time high levels as the price hovers in the region of $11,000. The warning was prefixed by a statement citing that digital currencies, such as Bitcoin, do not yet pose major concerns at their current levels of use.
Randy Quarles, the Fed vice-chairman of supervision, said:
More serious financial stability issues may result if they achieve wide-scale usage. (Digital currencies are a) niche product that sometimes garners large headlines. (It) has no intrinsic value, is not the liability of a regulated banking institution, and in leading cases, is not the liability of any institution. Indeed, how to treat and define this new asset is complicated.
US DOLLAR RELIANCE?
Could Cryptocurrencies Take Over the US Dollar as World Reserve Currency?
Randy Quarles went on to say that an economic system could be greatly challenged by liquidity and credit risks brought about by a lack of a stable exchange rate between cryptocurrency, such as Bitcoin, and the US dollar in times of adversity.
Given that Bitcoin specifically is seen as a potential successor to the US dollar, why would anyone want to exchange a dominant, backed currency for fiat currency that’s backed by government decree? It’s an arrogant statement from the Federal Reserve, but perhaps for speculators eager to exchange Bitcoin for US dollar profit, it may just scare them into thinking, or at least an awareness of, that a sudden crash in Bitcoin’s value might mean they will be unable to exchange it for USD rather than flip it onto the next man. It’s a short-term view, and yes, Bitcoin currently has no real advantage in the wider retail sector for payment, but as a cross-border method of payment, it excels. Also as a store of value, coming from a limited supply, its value is set to appreciate, especially if growth on a wider scale of retail acceptance is factored in. After all, if more people are investing in record numbers, then it only makes sense that they may wish to use it for payments rather than as an investment or store of value vehicle.
PUBLIC SERVICE
A Coordinated Law Enforcement Operation Across 3 Countries Took Down AlphaBay
For the Federal Reserve, as with the Chinese government, they serve a role in protecting the average citizen, to warn them of danger. Anyone looking to make a short-term profit from Bitcoin should seriously consider other less volatile options. Members of the financial sector have already warned that investors would seem to be only wanting to sell their Bitcoin to the next person, the bigger fool theory, rather than invest in it for its future value or technological worth. Perhaps those investors then really should steer clear.
I honestly would start selling if the feds start to regulate crypto or make it a pain in the ass to own.. [Reply]
Originally Posted by BigRedChief:
this is just not true.
blockchain does not create or eliminate trust. It merely converts trust from one form to another. While we previously had to trust financial institutions to verify transactions, with the blockchain we have to trust the technology and the peer itself.
Peers can be compromised. There are already rumors of man in the middle exploits being on the cusp of release.
There is no chance in hell block chain will be mainstreamed without an authoritive 3rd party between the transactions and peers.
The protocol is trustless because its math. Your last statement is false because that’s exactly the reason it IS mainstreaming. [Reply]
Originally Posted by BWillie:
I honestly would start selling if the feds start to regulate crypto or make it a pain in the ass to own..
I'm not so sure. Most bitcoiners are libertarians but regulations would actually make it even more mainstream and easier to buy in your 401k. I believe this will increase trading volume 10 fold, driving the price even higher. [Reply]
I was floored. An hour at deer camp was on this topic and I'm still shocked by the 3 guys who apparently buy bitcoin. I would have bet money none of them had even heard of it. [Reply]
