Blockchain, IoT and 5G — CityAM

5G networks are beginning to roll out across the UK as well as around the world. One of the biggest promises of 5G is the ability to connect millions of IoT devices. And Blockchain networks have three services they can perform to drive adoption and add value.

IoT stands for the Internet of Things. More simply, IoT is a network of things/devices connected to the Internet. These devices include sensors to collect data, and other functions, allowing them to engage with the world around them. Some examples of IoT devices would be a temperature sensor with a 5G radio built-in or an automated door lock in a hotel room connected via WiFi. Together all of these devices make up the Internet of Things or IoT

With potentially millions of IoT devices coming online soon, there will be substantial demand for network bandwidth, hence the importance of 5G networks. But what does blockchain have to do with any of this?

Blockchain networks will play a vital role in three main areas: value Transfer, Identity and Data Collection.

As early as 2012 there have been IoT devices connected to the bitcoin blockchain. Specifically, there was an internet-connected vending machine which accepted bitcoin as payment. The first purchase was for a bag of popcorn. The system was simple enough. When the right amount of bitcoin arrived in a specified wallet, the vending machine would spring into action. Of course, there were some problems along the way.

The bitcoin network can take up to an hour to process a transaction. With some tweaking, it can be nearly instantaneous. The problem with this is that it removes some of the safety mechanisms to reduce fraud. For substantial transactions on the bitcoin network (like purchasing a house) it is best to wait for up to an hour to ensure that the network accepts the transaction.

Today’s IoT systems need immediacy and may rely on blockchain protocols with significantly faster performance than available today.

Today’s IoT systems need immediacy and thus may rely on blockchain protocols and networks with significantly faster performance and assurance against fraud.

Equally, today’s IoT systems will not rely on the transfer of cryptocurrency direction to a device. Instead, payments will be made using traditional fiat currencies across existing payment systems — and then receive blockchain-based notifications.

For any of these systems to function, including peer-to-peer communication, there must be a decentralised identity framework. Every device is registered and identifiable across the network. Blockchain can provide this identity framework. When implemented at an industry level, it allows for the identification of any IoT device, regardless of manufacturer, geographical location or purpose, to any other device.

An IoT Identity network can verify transactions as originating from authorised devices. Equally, the systems can ensure the sending of access transactions to the correct destination device.

An IoT Identity Blockchain is a hugely ambitious project…

An IoT Identity Blockchain is a hugely ambitious project, but one which has sufficient advantages to all stakeholders to put aside competitive objections and get on with the creation of the governance, protocols and systems of such a network.

Last week Vodafone and Energy Web announced a partnership that could provide identities for billions energy generating assets.

The last piece in the puzzle is the ability to automate the entire network. Enter smart contracts.

Smart contracts are programs which run on the network and orchestrate the automated communications between devices and the associated transfers of value. Smart contracts do not run only in isolation; they need input from the outside world. A smart contract needs to created, executed, to check conditions from the outside world and to cause actions in the outside world.

Connections between the outside world and smart contracts are known as oracles and oracle services (not to be confused with Oracle Corporation). Every IoT device or group of IoT devices can act as an oracle. Smart contracts can check with an oracle service to determine the temperature outside or the arrival time of a cross-country train. An oracle service can unlock the door to a properly rented Airbnb flat — or serve a bag of popcorn from a vending machine.

And all of these transactions, automated or not, can be recorded in a blockchain. By registering every transaction, transfer and transformation, a permanent, immutable record exists for independent verification and audit. And with appropriate access, there will live a vast amount of data.

Blockchain-based data records can prove useful for analysis but also for training machine learning and artificial intelligence models. Of course, these are not without their challenges.

Blockchain is not designed for storing vast amounts of data — whether in the number of transactions or data associated with single transactions. Equally, data stored on a blockchain must be masked in some way so as not to reveal personal, sensitive or competitively sensitive data inadvertently. Masking or hiding data by maintaining a centralised database with appropriate access controls addresses this issue.

Blockchain, IoT and 5G will provide an infrastructure allowing for extensive new business models and process automation opportunities. It will require thousands of companies to agree to work together, and it will require an evolution of blockchain and other distributed ledger technologies. And it will require a keen focus on managing privacy and access to data that works for everyone.

Get in touch with us info@blockchainrookies.com / Twitter @igetblockchain

Troy Norcross, Co-Founder Blockchain Rookies

Twitter: @troy_norcross

Originally published at https://www.cityam.com on June 2, 2020.

Strategy and Digital Innovation — Digital Marketing, Consumer Data and Digital Innovation — Oh yes and thoughts on all things food!