Blockchain means big changes for IoT: Are you ready?
What is blockchain?
Blockchain is a technology for a new generation of transactional applications that establishes trust, accountability and transparency while streamlining business processes. A blockchain has two main concepts. A business network, where members exchange items of value through a ledger, which each member possesses and whose content is always in sync with the others.
What is IBM Blockchain?
- A private blockchain infrastructure of distributed peers that replicates the device data and validates the transaction through smart contracts
- A permissioned blockchain that makes it possible to define who can join- allowing participants in a business network to see only what they’ve been given rights to see on the blockchain
- A blockchain infrastructure that helps establish trust, accountability and transparency while streamlining business processes and enabling new business models
Why is IoT and blockchain a potential game changer?
There are three key benefits to using blockchain and IoT together:
- Build Trust
- Reduce Costs
- Accelerate Transactions
Leveraging blockchain for your IoT data offers new ways to automate business processes among your partners without setting up a complex and expensive centralized IT infrastructure. Blockchain’s data protection fosters stronger working relationship with your partners and greater efficiency as partners take advantage of the information provided.
Using IBM Watson IoT Platform and blockchain together enable Internet of Things (IoT) devices to participate in blockchain transactions. Specifically, IBM Watson IoT Platform enables IoT devices to send data to private blockchain ledgers for inclusion in shared transactions with distributed records, maintained by consensus, and cryptographically hashed. Blockchain’s distributed replication allows your business partners to access and supply IoT data without the need for central control and management.
“Businesses don’t exist in isolation. They are connected to customers, suppliers and partners. They exist in countries around the world and have to comply with regulations. The networks are not static and over time, they morph because of business acquisitions and mergers. Finance, risk management, healthcare, insurance, and the Internet of Things (IoT) are some of the other systems that are poised for dramatic change using blockchain networks.”
Jerry Cuomo is an IBM Fellow and Vice President of Blockchain Technologies 1
For example, it is now possible for information from devices such as RFID-based locations, barcode-scan events, or device-reported data to be used with IBM Blockchain. Devices will be able to communicate to blockchain-based ledgers to update or validate smart contracts. That means that as an IoT-connected package moves along multiple distribution points, the package location and temperature information could be updated on a blockchain. This allows all parties to share information and status of the package as it moves among multiple parties to ensure the terms of a contract are met. Additionally, the distributed ledger makes it easier to create cost-efficient business networks where virtually anything of value can be tracked and traded, without requiring a central point of control.
The result: Blockchain with IoT together becomes a potential game changer by opening the door to invent new styles of digital interactions, enabling IoT devices to participate in blockchain transactions, as well as creating opportunities to reduce the cost and complexity of operating and sustaining business.
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1Forbes, How to Provide secure and trustworthy blockchain networks in the cloud, Apr 2016.