Blockchain + Internet of Things
What is the Internet of Things (IoT)?
The “Internet-of-things” was coined between 2008 and 2009 when connected devices surpassed the number of humans on earth. Coincidentally this was around the same time as the advent of Bitcoin. Roughly a year later, in 2010, IPv6 – a network layer protocol central to IoT, was launched publicly. Fast forward to October 2021, there were 21.5 billion connected devices worldwide, approximately three times as many humans on earth.
What are IPv4 and IPv6?
IP stands for Internet Protocol, and v4 stands for version 4. It first launched in 1982 and is the underlying technology that allows connecting devices and machines to the World Wide Web. IPv4 addresses are a set of four numbers in a decimal format where a dot separates each set of numbers: 184.168.10.300. Your IP address is your digital identity and is the network address for your computer, so the internet knows where to route your emails, data, etc. *1
IP addresses can be assigned to devices and machines either dynamically or statically. Static IP addresses, like a fire alarm, are typically set manually on the device. Static IP addresses don’t change; therefore, it’s a best practice to assign static IPs to network devices like routers, switches, and servers. Dynamic IP addresses are automatically allocated to a device using DHCP (Dynamic Host Configuration Protocol). A laptop or desktop would be assigned a dynamic IP address for someone to be able to connect to the internet. IPv4 has two types of IP addresses, public IP addresses, and private IP addresses. Public IP addresses route internet traffic and are assigned out through the ISP (internet service provider) like CenturyLink, Spectrum, Cox, Xfinity, Verizon, AT&T, and others. Private IP addresses are used in internal, private networks that never touch the internet.
The primary function of IPv6 is to allow for more unique TCP/IP address identifiers to be created now that we’ve run out of the 4.3 billion created with IPv4. This is one of the main reasons why IPv6 is such an important innovation for the Internet of Things (IoT). Internet-connected products are becoming increasingly popular, and while IPv4 addresses couldn’t meet the demand for IoT products, IPv6 gives IoT products a platform to operate on for a very long time. *2
3 Reasons Why IPv6 Is Important for the Internet of Things
Security
With billions of new smart products being created every day, security is an essential thought in the back of all IoT engineers’ minds. Organizations and individuals have learned of the real and imminent threat that hackers pose recently, but the IoT brings up a whole new line of security intricacies. Hacking a secure network and stealing millions of credit card numbers is terrible, but if a bad actor with ill intentions was to hack into a smart city or a neighborhood of smart houses, the outcome could be catastrophic. The good news is that IPv6 offers better security solutions than its predecessor. *2
For one thing, IPv6 can run end-to-end encryption. While this technology was retrofitted into IPv4, it remains an extra option that is not universally used. The encryption and integrity-checking used in current virtual private networks (VPNs) are a standard component in IPv6, available for all connections and supported by all compatible devices and systems. Widespread adoption of IPv6 will make “man-in-the-middle” attacks—i.e., thinking that you’re signing into a secure bank log-in when walking into a cyber “trap”—significantly more difficult. *2 *3
DDoS and phishing attacks, data theft, and remote hacking of industrial control systems, healthcare systems, and automotive technologies are all likely to carry over from IPv4 to IPv6. Experts say that although the structural elements of IPv6 are naturally beefed up, along with the huge address space, hackers will eventually find the network vulnerabilities and, after that, get to work on attacking the higher layers. *3
Scalability
IPv6’s expanded pool of IP addresses provides scalability and offers enhanced protection, which makes it harder for attackers to search and identify the host. IPv6 performs End-to-End encryption and increases internet bandwidth in many regions, both of which are integral to scaling. *4
Connectability
With billions of new IoT devices entering the market each year, allowing network-connected devices to “speak” to each other is vital. IPv6 allows IoT products to be uniquely addressable without working around the traditional NAT and firewall issues. Larger and more advanced host devices have tools to make working with firewalls and NAT routers easier, but small IoT endpoints do not. With IPv6, many of these issues become easier for TCP/IP-enabled IoT devices to handle.
The Internet of Things (IoT)
The internet of things (IoT) is transforming the way enterprises operate using sensors, other edge devices, and infrastructure. With the number of connected devices growing every year, the amount of data processed by IoT devices is enormous. These data are supplied in a chain and exposed to attacks by cybercriminals. *5
Blockchain is a distributed ledger technology that combines IoT to make machine-to-machine transactions possible. It uses a set of transactions recorded in a database, verified by multiple sources, and entered in a shared ledger distributed across every node. The combination of IoT and blockchain offers various potential benefits and allows a smart device to function autonomously without the need for a centralized authority. It can also track how devices communicate with each other.
While blockchain and the IoT are each powerful, the combination of these two technologies can be incredibly leveraged by enterprises. *5
The Internet of Things (IoT) is expected to become a $7 trillion market by 2025. IoT’s rapid growth is partly due to the many benefits it offers. For example, by connecting devices to the internet, information can be collected and transmitted in real-time while installing and maintaining infrastructure costs are significantly reduced.
Accelerated Data Change
According to Aftrex Market Research, one of the leading benefits of the combination of IoT and blockchain is accelerated data change. Reportedly, the current implementation of blockchain has limitations with this facet because it caps the number of transactions per second. A more enterprise-grade approach, like a permission-based blockchain, is required to handle the amount of data, the number of devices of IoT, and the speed at which two parties transact. A blockchain can minimize the time to validate transactions by leveraging trusted nodes and can handle the speed of IoT data exchange. *5
Lower Costs
One of the most praised benefits for enterprises is the ability to reduce operational costs. Blockchain allows data to be submitted on a peer-to-peer basis without centralizing control, which lowers business expenses. Scaling a highly reliable centralized infrastructure is bound to be expensive. Decentralization enables a more cost-effective way to eliminate single points of failure while addressing the scale of IoT. *5
Improved Security
Security is one of the innate attributes of blockchain, thanks to its ability to legitimize data and ensure it comes from a trusted source. Because of the high number of devices within IoT, this benefit is especially helpful. The combination of the technologies could strengthen privacy agreements and enhance secure communications. And it’s not just devices – it’s also human to human, device to device, and human to machine. This trusted ledger that transparently shows who has access and transacts, and a record of all those transactions is a significant benefit. *5
Enterprises currently utilizing a combination of blockchain and IoT often count on security measures like device authentication, though this is just the tip of the iceberg. To fully ensure security, there need to be various security layers implemented to prevent unauthorized access or cut-off access if a bad actor is detected. *5
Streamlines Accounting
Accounting is one of the first departments within an enterprise that could benefit immediately from the added transparency provided by blockchain and IoT. It is crucially important for entities to know what organizations sharing/ sending money/data across a linear, time-stamped chain are. It’s a hardened and reliable chain of transactions that can’t be changed. *5
A More Efficient Supply Chain
A top priority for many enterprises is making supply chains more efficient. Yet, numerous economic and global challenges make this process more difficult. By eliminating the middleman, blockchain and IoT can improve supply chain efficiency, increasing the speed of transactions and lowering costs. If a typical supply chain transaction takes four or five hops to be validated, fees are paid with each hop.
With the blockchain serving as a validator to a degree, untrusted parties can exchange data directly, eliminating the fees associated with every hop. *5
Distributed Ledger Technology is about to change all aspects of digital business, and according to some, blockchain is a bigger deal than the internet. Combine blockchain and IoT, and you have two bigger deals than the internet that need each other for numerous reasons. *6
Virtually all research firms have mentioned blockchain as a rapidly accelerating evolution, and it’s not just about financial services companies. The convergence of blockchain and the Internet of Things is on the agenda for many companies, and there are existing implementations, solutions, and initiatives in several areas, outside of IoT and the transformation of financial services. *6
Blockchain and IoT: 7 Examples Making Our Future Smarter
According to the article by builtin published on September 1, 2022, here are seven examples of how blockchain technology and IoT are making the future brighter:
Helium
Helium is a decentralized machine network. The company uses blockchain to connect low-power IoT machines (like routers and microchips) to the internet. Helium’s blockchain-based wireless internet infrastructure uses radio technology to strengthen internet connection and drastically reduce the power needed to run “smart” machines. *7
Chronicled
Chronicled combines blockchain and IoT products to deliver an end-to-end supply chain solution. Focusing on the pharmaceutical and food supply industries, Chronicled uses IoT-enabled shipping containers and sensors to give real- time updates on shipping processes. *7
Implementing blockchain in their IoT devices allows for all parties involved in a medicine or food supply shipping process to be fully aware of the chain of custody and if any problems arise during the process.
Chronicled developed a technical pilot showing how supply chain events can be registered on a blockchain. The blockchain considered the pharmaceutical industry’s stringent data privacy policies and complicated handling rules to record a supply chain of events successfully. *7
ArcTouch
ArcTouch develops and builds blockchain-based software for a range of smart, connected items, including voice assistants, wearables, and smart TVs. *7
The company has built personalized, decentralized apps (DApps) for dozens of companies that link to IoT devices. ArcTouch’s DApps provide an extra level of IoT security and can process agreements faster through smart contracts. The company has built several blockchain DApps that connect to IoT devices like Amazon Alexa and Facebook Messenger. *7
NetObjex
NetObjex has created a standardized, decentralized mechanism for IoT devices to communicate with one another. The company’s blockchain-enabled IoToken provides a secure digital platform for interacting and communicating with smart devices within the same ecosystem. *7
NetObjex claims its IoToken can be used to communicate seamlessly with other devices in a myriad of industries. At a drive-thru restaurant, patrons could use the IoToken in their crypto wallet to pay for their meals. In drone delivery, the IoToken can be used to mark a point of delivery and verify payment. *7
The company partnered with the Brooklyn Public Library to install its Smart Mobile Phone Charging Station technology. Powered on NetObjex’s blockchain-IoT technology, the charging stations require users to watch a brief informational video and take a short survey. *7
The survey results are securely stored on a blockchain for the Brooklyn Public Library to analyze as part of its growth initiative to improve the patron experience.
HYPR
HYPR uses decentralized networks to secure connected ATMs, cars, locks, and homes. One of the main reasons cyberattacks are so devastating and widespread is that centralized databases store millions of passwords. *7
HYPR stores biometric logins on their blockchain, securing and decentralizing important information. The company’s biometric security protocols include unique facial, eye, voice, and palm recognition tools for IoT devices. *7
HYPR has successfully experimented with several decentralized uses for its IoT security platform. They have tested biometric scans on smartphones to access ATM personal banking. The company created a DLT digital key for homeowners to have a single access point to everything from IoT-enabled doors to smart entertainment centers. *7
Xage Security
Xage is the first blockchain-protected security platform for IoT. It focuses on industrial industries like agriculture, energy, transportation, and utilities. Xage’s blockchain enables IoT devices to be tamper-proof and have access to secure lines of communication between smart objects. *7
Xage has a suite of decentralized IoT applications that do everything from securely managing policy to offering tools that issue instant alerts about suspicious hacking activity.
Xage joined the Smart Electric Power Alliance (SEPA) to focus on how it can bring its IoT devices to the clean energy sector. The company wants to make its ledger technology more widespread to thwart cyber-attacks. *7
Grid+
Grid+ specializes in making hardware for cryptocurrency and digital assets. The company bills its GridPlus Lattice1 and SafeCard as ultra-secure hardware wallets that let people use crypto with safety and ease of use in mind. *7
