Introduction to IoT Applications with Blockchain

Written by Drew Mailen

On June 14, 2022

The Internet of Things (IoT) is a catch-all phrase for any physical device which can send and receive data. Every day, you likely interact with devices connected to the Internet of Things, whether you use a thermostat controlled by an app on your phone, a speaker that connects via Bluetooth, or a smart device such as Alexa. Our digital world is becoming increasingly physical, and technology is readily adapting to keep pace. 

New infrastructure is being deployed to support the growth of the IoT industry such as the rollout of 5G, which can benefit IoT devices more than it benefits mobile phone reception by making greater data transfer speeds available. The speed of 5G enables the development of innovative technologies such as wearable watches that can translate a conversation in real-time between two people who do not speak the same language. As the capability of IoT continues to improve through technological advancement, there is potential for improvement by augmenting it with blockchain technology.

Smart Contracts and IoT

Blockchain is a distributed ledger system that stores immutable transaction information, meaning that the data cannot be edited across a network of computer servers known as nodes. The immutability of data through blockchain has several security benefits, as the data cannot be altered assuming normal operations are taking place. Whenever a new transaction is committed to a particular blockchain, it is recorded in a data block and appended as a link in an unbreakable chain. 

The data on this digital ledger can represent ownership of an asset such as a building, a piece of artwork, the copyright to intellectual property, or a digital token such as a Bitcoin. Some blockchains support the creation of smart contracts, pieces of programmable business logic that will execute when certain conditions are met, such as automatically selling the intellectual property rights of a patent when money is received. Smart contracts can be foundational for bringing the benefits of the blockchain to IoT technology.

The Intersection of IoT and Blockchain

Innovators are hard at work applying the benefits of blockchain to IoT technologies, yet there is room to grow in the scalability and security of these products. Look no further than IBM. Watson, one of IBM’s most sophisticated Software-as-a-Service solutions, has recently released an IoT Blockchain service. IBM’s Blockchain Service offers a practical solution to complex supply chain issues involving freight transportation and component tracking. 

For instance, using Watson’s service, a company and its clients can monitor and share a variety of data about the status of shipping containers as they are en route. Vital information about the shipping container can be shared on the blockchain with interested parties like the supplier of a product, the shipping company, and the warehouse where the products are destined. Accumulate’s design can benefit IoT with greater throughput, segmented addresses, scratch accounts, and authorization schemes. Below are existing use cases at the intersection of IoT and Blockchain.

A Supply Chain Use Case

IoT-enabled devices can send and receive specific information between the parties mentioned above, such as: 

  • The temperature of the containers 
  • The container’s global position
  • Expected arrival time of the container 

A shipping container can be sent to an automated warehouse at which smart contracts are set up to respond and react accordingly to the changing conditions of the shipping container. A smart contract is similar to a real contract because when certain terms are met, certain conditions are enforced, except that in a smart contract, the terms are enforced by computer-coded logic. For example, a smart contract can be arranged that the order can be canceled if the temperature of a container exceeds a specific temperature. 

A self-driving IoT vehicle can be set up to unload the container when it arrives. The contract can verify the delivery to everyone involved in the order via the blockchain, potentially triggering more smart contracts and allowing for more efficient scheduling of deliveries. 

A Maintenance Use Case

The intersection of blockchain and IoT can be used to verify that maintenance has been conducted on a machine that sees regular wear and tear such as an elevator. A smart contract can be set up to automatically schedule maintenance as soon as required which makes the world safer. This information can also be automatically shared with regulators keeping track of compliance with federal safety codes and cutting through red tape. IBM is just one of many businesses taking advantage of the possibilities that IoT and blockchain can enable. 

A Survey Use Case

NetObjex, a California-based startup, creates applications on its proprietary decentralized IoT-blockchain platform. They have worked with the Brooklyn Public Library to provide secure phone charging lockers, which library visitors can access after filling out a survey meant to improve the user experience at the library. The answers are stored on a blockchain where various stakeholders can analyze the results and carry out improvements. Storing answers on a blockchain creates some verifiability for the data and how it got there.

A Smart Home Use Case

ArcTouch, a San Francisco-based startup, is a leader in developing decentralized apps (DApps) which run on the blockchain and connect to smart devices. Their applications include a tool for 3M, which connects home air filters to Alexa, monitors longevity, and informs users when they need to be changed. This leads to better air quality, as people often forget to change their filters.

Security and Scalability Remains as Top Issues for IoT Industry Experts 

While the previously mentioned examples from IBM, ArcTouch, and NetObjex are potentially great use cases for IoT-connected devices and blockchain, they need progressively better infrastructure to become more secure and scalable. That’s where Accumulate can help. 

Despite IoT technology’s increasing presence in our world from the above examples and many others, industry experts believe that IoT is being held back from its truest potential due to security and scalability concerns. A Deloitte Perspective piece stated that IoT devices often suffer from vulnerabilities and are an easy target for cybercriminals via Distributed Denial of Service (DDoS) attacks. 

Experts from Deloitte also believe that another issue with IoT is the technology’s current level of scalability. As the number of overall IoT-connected devices grows, the network becomes congested, so it becomes less efficient in authenticating, authorizing, and connecting to different devices. 

How Accumulate Helps with IoT Security Concerns 

Accumulate’s design can serve as a defense mechanism to combat the security and scalability issues that impede the potential of IoT-connected devices. While we discuss this more in-depth in the blog post “How Accumulate Can Mitigate DDoS Attacks” it’s worth noting here that there are several aspects to Accumulate’s design that makes the network capable of mitigating DDoS attacks, thus improving the security and scalability of IoT-connected devices: 

  1. Rather than existing as a single blockchain, Accumulate is a chain of chains. Each chain has its own security and bandwidth. Thus, attacking all chains is more complicated than attacking a single network. 
  2. Accumulate’s fee structure requires fees to originate from a single signator, making the identification of attacks easier. 
  3. Accumulate’s two-token system has ACME and Credits. While Credits provide a security add-on, ACME is a spendable token like ETH that Accumulate issues to reward services providers (e.g., Validators) 
  4. All IoT devices have their own identity on the blockchain, preventing spoofing. As related to IoT, spoofing happens when an entire security system is breached via entry from a lower level of the system. A classic example is when a personal computer is hacked because it’s connected to the same network as an IoT-enabled light switch. Even on encrypted networks, the hacker can bypass the network’s encryption by blending into it, so the network thinks the hacker is encrypted as well

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