The rise of blockchain and distributed ledger technology (DLT) is driving renewed enthusiasm among Internet of Things (IoT) stakeholders. Hashed Health was fortunate to be a part of the Blockchain/IoT Summit held recently in the California hills overlooking Berkeley and the San Francisco Bay. I came away from this roundtable convinced that the distributed nature of the blockchain is an excellent enabler of IoT applications and the smart contracts that make these smart devices meaningful. While the technology is still in its early stages, I think we are going to see some interesting use cases arise over the next few years. Using the blockchain, IoT entrepreneurs can build secure, smart-device-based economies with blockchain-registered devices that can process transactions, sign attestations, execute contracts and even transfer funds.
The event in Berkeley was hosted by Chronicled. In attendance were some of the world’s thought-leading IoT hardware and software companies, including Skuchain, Filament, Ledger, VeChain and Slock.it. These companies presented a few of their pending proofs of concept (POCs) in areas such as pharma, drones and international trade. Much of the discussion focused on designing the key activities that sit between the application layer and the blockchain utility layer. These key activities include:
· The registration of entities (registrars, registrants, things) on the blockchain;
· The verification of devices and the wallets that sit on the IoT object;
· The transfer of ownership of an asset;
· The ledger of events and transactions from sensors, devices and individuals;
· The wallet on the device.
These are the basic activities that allow smart devices to become autonomous objects that can process transactions and execute agreements. A few examples of what new blockchain-based companies are working on:
· Slock.it uses these activities to combine an identity and a wallet with a door lock that can talk to the cell phone of a guest.
· Filament turns oil refineries into smart systems with tokenized devices and meters, improving the provenance of data.
· VeChain is using chips on luxury clothes to track the movement of assets across the supply chain and improve the customer experience.
· Chronicled is researching how drones can be registered and authenticated on the blockchain so that they agree to, follow and attest to their correct flight paths.
· Ledger uses secure smart cards with tamper-proof chips to ensure the integrity of transactions on a device.
· SkuChain has connected the IoT devices on cargo ships to the payment process for international cotton transactions.
The reason the blockchain is a high-potential element in all of this lies in its ability to manage the activities listed above in a distributed fashion with little friction between participating parties and machines. The operational efficiency, reduced transaction costs, improved auditability, strengthened security, better stability and facilitated regulatory compliance are among the benefits of a blockchain-based IoT solution. This could challenge more closed and lethargic first generation IoT deployments, which were architected around centralized models that have a more retrospective view of supply and demand signals. Many of these models can guarantee device and data integrity directly from the source device. The blockchain creates an immutable ledger of transactions. The rate of maturation for these solutions will depend on these organizations, the validity and value of early projects and the security and scalability of the blockchain itself (most specifically in the smart contracts that manage transactions on top of the blockchain).
Another accelerant for these companies (and mine) is to really understand and explain the “why” behind it all. Why does it belong on the blockchain? Why would people pay for it? Answering these and other non-technical questions will guide us more effectively to a future in which the blockchain and DLT can provide the infrastructure that accelerates the adoption of safe and secure, new IoT economies.
CEO of Hashed Health
John Bass is the Founder & CEO of Hashed Health, a healthcare technology innovation company focused on accelerating the commercialization of blockchain & Distributed Ledger Technologies in healthcare. John has over 20 years of experience in healthcare technology with expertise in collaborative software platforms, patient engagement, systems integration, supply chain and value-based payments.