Can Blockchain Provide the Security, Scalability & Privacy IoT Needs?
Gartner predicts that the total number of installed IoT devices would rise to a whopping 20.4 billion by 2020, while BI Intelligence forecasts a number close to 24 billion. IDC has gone a step further and estimated the number of connected devices at 30 million by 2020. And, if all these predictions seem a little optimistic, IHS Markit surveyed 5,000 data scientists, industry specialists, analysts and financial experts and set its expectations at 125 billion devices by 2030.
Much earlier than that though, IDC expects IoT revenue to touch the $357 billion mark by the end of 2019, while McKinsey & Company says the revenue would reach $11.1 trillion globally by 2025. All these predictions are based on expectations that IoT platforms would soon be able to analyze data to find valuable information, which could then be shared with other devices to initiate specific actions or commands. The end result would be unparalleled user experience, improved efficiencies and definitely much greater automation.
The Internet of Things has not just been optimizing manual processes but translating them into the digital era, being able to access and transmit volumes of data like never before. This sharing of information has led to the development of smart apps that have led to better quality of life and management of services through digitization.
However, it has been centralized architectures, such as those used in cloud computing, that have driven IoT development to a large extent. This is where the challenge of data transparency arises, given that participants in centralized networks do not have clear insight into how and where the information they provide will be used. So, there are some key challenges that will need to be addressed for IoT to reach the levels of acceptance that key research reports have been predicting.
Challenges to Overcome for Increased IoT Adoption
In traditional IoT systems, based on centralized architecture, information is relayed from a device to a cloud, where this data is processed and analyzed and then sent back to the connected device. If billions of devices are to join IoT networks, there will certainly arise issues that will not just compromise network security, but also make the network extremely slow and expensive, at the same time. This will happen because each of the billions of micro-transactions between connected devices will need to be checked and authenticated.
We have already seen this problem with blockchain networks, where lack of scalability means huge delays in verification of transactions. Bitcoin, for instance, hasn’t been able to go beyond 7 transactions per second, while Ripple has been able to scale only to 1,500 tps. And, the data here is not even a fraction of the data that are already being produced by IoT devices.
With huge volumes of data comes the risk of vulnerability to leaks and attacks. There might be vulnerabilities created at the point where a device connects to the network or the devices themselves might be at risk from cyber-attacks.
NEC believes that all these challenges and questions can be aptly addressed through a blockchain solution.
The Blockchain of IoT
IoT can be revolutionized with the use of blockchain, an ecosystem that is best suited for trusted sharing, such as that required by the Internet of Things. With blockchain, data is traceable, immutable and reliable. The key solution to most challenges that IoT faces today can be resolved with the blockchain IoT solution developed by NEC.
The NEC blockchain solution offers a lightweight interface for IoT devices, where smart contracts allow connected devices to function autonomously and securely through agreements that are executed when specific pre-determined conditions are met. This helps minimize the device resources required to connect and communicate with the IoT gateway. With this lightweight mode of operations, only a small segment of the blockchain needs to be downloaded to complete the operation.
Both storage space and resources are saved since the complete blockchain does not need to be processed either. The smart contracts on the NEC platform offer transparent and flexible support to complete interactions between connected devices. This is very similar to the Simplified Payment Verification (SPV) solution created to enable lightweight Bitcoin clients, where only the relevant part of the blockchain needs to be downloaded and processed in order for the transaction to be verified and completed.
In the existing blockchain solutions, IoT devices need to connect to the entire blockchain consensus to process any commands or updates. This wastes a huge amount of energy and bandwidth for the device. On the other hand, NEC’s solution requires connected devices to only access a single node for the processing of commands or to receive updates. At the same time, being on the immutable distributed ledger, no one can manipulate the view of the IoT device, giving it strong security.
So, the key areas in which the NEC blockchain solution helps make the experience of IoT much smoother are:
? Resource savings
? Energy savings
? Storage space savings
? Bandwidth savings
All this makes NEC blockchain solution more suitable for IoT with the additional advantages of blockchain, such as:
? Scalability, where unlimited connected devices can be added onto the network.
? Security & privacy, so that hacking into connected devices or access to any unauthorized third-party is prevented.
? Device identity, where individual devices on the network can be identified, making device authorization smoother and more secure.
Also, without the need for a third-party to oversee contract fulfillment, transactions remain low-cost and security remains high through permissioned access to data.
(February 28, 2020)