In December 2016 the Blockchain x IoT Summit in Berkeley, California brought together innovative startups (Ambisafe, BitSE, Chronicled, ConsenSys, Distributed, Filament, Hashed Health, Ledger, Skuchain and Slock.it) and industry-leading Fortune 500s including BNY Mellon, Bosch, Cisco, Gemalto and Foxconn.
The summit focused on the potential of integrating blockchain in IoT and challenges triggering multiple corporate partnerships to win collaboratively.
While in manufacturing space, blockchain technology has already gained traction in supply chain logistics , the applicability and significance of blockchain is much wider and deeper in scope. In one of the recent The IOT Review episodes, we sat down with Andre DeCastro, CEO of blockchain of things and a well-known authority in Cryptography to discuss and penetrate into this topic.
Presented here are some of the key insights from that discussion.
What is Blockchain & Distributed Ledger – a quick Intro
The origin of blockchain and distributed ledger technology is in the cryptocurrency called bitcoin. The bitcoin blockchain is an authoritative ledger to record all transactions between two individuals, when they exchange money between each other using this cryptocurrency.
Unlike PayPal and traditional banking – there’s no central authority. Individuals can transact globally in near instant speed and in a purely peer to peer fashion. The ledger itself is cryptographically secured. This ledger has been around for 8.5 years and as of today secures asset transactions of roughly 12 Billion US Dollars net worth.
Some powerful properties of this ledger are:
Immutability – Once a transaction has been added to this ledger, it can never be edited or deleted.
Traceability – The ledger tracks each transaction with cryptographic signatures and provides cryptographic proof of transaction.
Consensus based: Every participant or node verifies and approves the transaction before it is added to the ledger. We can think of it as a highly democratic excel spreadsheet.
A compelling case: Why blockchain for the Industrial IOT?
There are more than one reason that makes blockchain highly relevant for the industrial IOT.
Security & Resilience: The bitcoin blockchain spans globally. A recent study estimated its computational power as 550 times Google’s global processing infrastructure. This is pretty huge & this network is growing every single day. Yet till date none of the transactions were subverted.
Blockchain transactions are transparent, anyone can actually “see” the transaction live as they happen. The transactions are often of high net value (recorded up to 160 million US Dollars per transaction).
This provides a huge incentive to break in and hack the blockchain. And the very fact that no blockchain transaction was subverted since this ledger’s inception proves the cryptographic resilience of the messages.
This cryptographic resilience can be leveraged to reduce (if not eliminate) the risk of compromising industrial IOT as millions of devices get connected and exchange messages.
Immutability & Transparency: Other than security, the fact that each transaction is immutable can provide a stamp of authenticity along the supply chain. From a device leaving the manufacturing shop, in transit, after sale and throughout its lifecycle. In industries like pharma, advertising, precious metals or anything of high value, blockchain has already proven it’s applicability to track authenticity. Transparency of transactions also allows an audit trail and proof of records.
Peer to Peer Communication: Over the past decade we witnessed a sharp rise in centralized cloud-based solutions. And of late we are seeing hackers targeting these centralized infra using IOT devices as botnets.
The major denial of service attack on Dyn DNS in late 2016 was estimated to impact 50% of the Internet services in North America including Twitter and Netflix. The fact that hackers numbed Dyn’s substantial network infrastructure with dangerous traffic volumes makes us weary of industrial IOT adopters with much less substantial infra and relying on centralized cloud services.
And now imagine the impact of a security breach in cloud-based industrial IOT use cases involving critical assets like smart city lighting and traffic control systems, medical device implants etc.!
“Ironically when the Dyn DNS was attacked, Bitcoin Blockchain was unfazed. People were happily sending bitcoins all over the world!” Andres DeCastro points out.
Peer to peer communication no doubt is much less prone to such attacks. But how many peer to peer solutions do we have today for the Industrial IOT?
The bitcoin blockchain as a peer-to-peer solution with nearly a decade worth of track record could mean significant improvements not just from a security perspective but from an attack vector perspective.
Hackers will be challenged with their current strategy to attack central nodes using IOT bots. Instead they’ll have to target dozens if not hundreds of nodes to trigger the same impact.
And that’s fairly impossible. Why?
“If a denial of service attack floods three or four geographically spread server clusters instead of just one, then the traffic gets distributed as well and no longer remains a denial of service attack!” Andre explains.
Security is a big elephant in the room as we look to accelerate enterprise IOT adoption. There are rising pressure from government and regulatory bodies as well to prioritize industrial IOT security.
While budgeting for spend on cloud based IOT solutions, enterprises have a choice to look and integrate peer to peer technology in addition and without significantly impacting their cloud based models by working with blockchain providers.
