Author: Josh Jones, CMO
The total number of connected Internet of Things (IoT) sensors and devices is expected to grow from 21 billion this year to 50 billion by 2022, according to recent data from Juniper Research. This is in-line with other analyst firms’ predictions, which have been adjusted over the last five to ten years, but in aggregate show undeniable massive growth forecasts.
Juniper claims the growth will be driven mainly by edge computing services – the processing of data away from the cloud and closer to the source.
A large portion of the estimated 46 billion industrial and enterprise devices connected in 2023 will rely on edge computing, so addressing key challenges around standardization and deployment will be crucial.
Communications Service Providers (CSPs) and others are paying attention to this, and it is driving large investments in edge technologies, including Multi-Access Edge Computing, “fog” computing technologies, and more.
Cloud providers are also taken note, and even investing in their own nanotechnology at the edge, including Google, who announced in July 2018 they’re developing their own silicon, chipsets, and other tiny edge hardware and firmware.
Blockchain, the immutable distributed ledger technology that can include self-executing “smart contracts” is strongly positioned to offer a standardized method for managing data exchange and making it more secure and easier to organize and log transactions between IoT devices and systems, essentially removing the middleman, or a centralized server that traditionally would handle such transaction enablement.
Given the sheer volume of end-points at the edge, it makes sense to remove central agents (services that approved and validate every transaction). Instead, with blockchain for IoT edge communications, distributed nodes participate in validating every transaction in any given network.
Blockchain technology has the potential to also improve security through decentralized data exchange with more scalable, distributed security and “trust systems” supporting millions and billions of IoT devices, applications and platforms.
Blockchain uses proven hashing algorithms to create the immutable ledger, with information encrypted and accessed through public and private keys.
Permissioned blockchains combined with private network approaches make the security and management even more controllable and secure, and given the dramatic growth of the IoT already, those who are in the middle of this space are well-aware of the security vulnerabilities, including those attacks which have been publicized (and those which have not).
How would this work?
One model is to embed self-executing code on IoT chips which help determine what action takes place when a condition is met. Those actions would only be executed when an incoming transaction authenticated.
Blockchain ledgers, while often considered too slow for truly real-time applications, do decrease the time required to complete IoT device information exchange and processing time – and this also lowers cost (in addition to enterprises not having to spend money licensing traditional centralized server software security offerings).
With the advent of 5G, which adds fuel to the connectivity innovation fire, edge computing is critical to also relieve pressure on networks and allow for sensible scaling up of deployments; conquering the edge means lowering bandwidth requirements, speeding up response times, and improving data security, and improvements in data security, according to Juniper.
Here are some sensible use cases.
In the pharmaceutical industry, drugs, including expensive cancer drugs, must be shipped and stored at certain temperatures (by FDA law in the US) and must also have clear expiration data and compliance reporting built in. The process for tracking this is hard, and pharma companies pay hundreds of millions of dollars to outsource this to traditional tracking companies.
This supply chain could be easily automated using blockchain to create a more streamlined and far less expensive mechanism to provide information to multiple subscribers in a secure way.
Other IoT use cases include oil tank monitoring (near real time data on fuel levels), tracking of sensors associated with the electrical energy market (on smart grids), tracking of construction equipment on job sites, and fleet management solutions which today are advanced, but could be made less complex and more affordable with blockchain.
While blockchain doesn’t replace all enterprise legacy systems, it provides a smart layer on top of existing applications, without disrupting the current course of business, management, and long held supply chain mechanisms.
Finally, combining blockchain with encryption means that the more end nodes that are added, the more secure the network becomes, which is exactly the opposite of traditional, centralized databases that have a single point of access. Blockchain-on-IoT devices are actually more secure as more are added, because of the dispersion factor (a cybercriminal would have a hard time controlling all those endpoints and nodes).
So where does the new revenue come into play?
For CSPs, they can add managed services using blockchain to their IoT offerings, which have been slow to take off.
For SIs like SAP and IBM, they can also build business through consulting through R&D, product development, testing and more, while they assist companies in building end-to-end solutions.
For cloud providers, like Amazon, Google and Microsoft, they can offload compute from their clouds while still retaining their customers and add blockchain-based edge solutions to their suites.
For device makers, they can speed up adoption by testing devices initially using blockchain, then expand and become more attractive to the SIs and other IoT market participants knowing they can innovate with a realistic grasp of the connectivity and security needs at the edge.
While we’re still early in the advent of enterprise blockchain, and while we need to continue – as a community – to build solutions that work to improve nearly everything digital enterprises do – at Windmill Enterprise, we’re finding tremendous interest in leveraging blockchain to break open new business models, particularly where the challenges today and in the future need to be addressed.
Conquer the edge – and securing the edge and all transactions in IoT in a better way, and no matter what kind of participant your company is in the hyper-connected world, you’ll build new value.