Blockchain technology is far from ubiquitous, but the internet of things, or IoT, has permeated nearly every industry and sector. Analysts have estimated there would be this year. From Amazon’s Alexa to connected sensors in factories and the growing number of drones, the IoT has arrived.
Yet, it may be blockchain that helps IoT reach its full potential, so long as key hurdles can be overcome.
That’s the premise of a by the Boston Consulting Group and Cisco Systems, which argues that challenges ranging from a lack of standards to security and privacy concerns have slowed the adoption of IoT, and that integrating blockchain technology may provide solutions.
When it comes to blockchain and IoT, the bigger issue is understanding the relationships among different partners in a connected network of businesses.
“It’s yet to be proven, but we think blockchain and IoT start to bring that together full circle,” Anoop Nannra, head of blockchain initiatives at Cisco and chairman of the , tells ThirtyK. “We want to make sure we start asking the right questions about blockchain and interoperability so we don’t relive the situation we’re in right now in IoT.”
Many Use Cases
The BCG-Cisco study found 35 use cases involving a combination of blockchain and IoT technology, including supply chain operations visibility, interactions among smart appliances, smart cities, car leasing and ride sharing, and smart-vehicle charging and fueling. But only about one-quarter have moved beyond the proof-of-concept phase and are ready for production, according to the report.
Some IoT-blockchain use cases, including the kinds of supply chain-focused operations tracking and provenance solutions that have , have advanced more quickly and are now . For its part, Cisco is exploring the use of blockchain and IoT in provenance solutions for the anti-counterfeiting measures in its own complex supply chain, according to Nannra.
While industry standards, data models and interoperability are well-known challenges that must be resolved in both blockchain and IoT, Nannra argues that the bigger issue is understanding the relationships among different partners in a connected network of businesses.
“When a collection of individuals and enterprises come together and understand their complementary role in the ecosystem, that will change the way we think about blockchains, not as services and markets but [determining] the minimum viable ecosystem that is required,” he says.
New Revenue Streams
These ecosystems also could provide new revenue-generating opportunities for the businesses in them. While existing blockchain-IoT solutions focus largely on cost savings and efficiencies, the combination of technologies could ultimately create a marketplace for the growing amounts of machine-gathered, data-connected devices are generating.
In many IoT solutions today, data collected from devices are “typically being thrown away,” Nannra says. With blockchain providing a way to verify the authenticity of data and machine learning analyzing it on the fly, that information could be placed into “an asset-backed security that could be traded,” he adds.
Data involving consumer goods and usage, autonomous vehicle performance, health care records and the environment are among the examples of valuable information which could be collected and analyzed without human intervention in the “machine economy,” according to the report.
“What’s been missing is a way to independently verify the authenticity of the data that [are] coming from the machines,” Nannra says. “If you have-high quality data that [are] attestable and set to a machine-learning algorithm, [they] could generate trustworthy insights and … new and high-value outcomes.”