Blockchain of Things- Building the best out of Blockchain and Internet of things (IoT)
This is the part 2 module for Applications and Use Cases of Blockchain and IoT. In our first part, we discussed the Internet of Things (IoT), IoT devices, creating secured IoT platforms by merging blockchain technology and internet of things as well as the potential of Smart Contracts in IoT. If you are unfamiliar with the structure of Internet of Things (IoT), you can review it here to get a clear picture
Now taking a step further, we are going to examine the practical applications of the blockchain of things, current ongoing project examples and use cases.
Blockchain and IoT
Blockchain and IoT are two emerging technologies which can have an immense impact on our future. The current expansion in IoT projects will change the way in which we communicate with electronic devices. IoT redefines the communication of machine to machine interaction in ways that have never been explored before. Communication with minimal efforts so that businesses and lives can become simpler and efficient.
But, IoT brings with it its own set of issues. With data being amalgamated at multiple points in unsecured devices, multiple risk factors including privacy, security, and reliability come into play. Furthermore, trust is also an integral constituent in creating a secure data exchange platform for IoT devices. The current model of IoT systems does not promise the ‘level of trust’ required to satisfy consumer skepticism.
In our first module, we examined how the key components of blockchain can create a more productive IoT ecosystem. It can be vital to solving issues of IoT such as security, privacy, and trust. Additionally, smart contracts can give a whole another paradigm to the functioning of IoT devices. Smart contracts on blockchain can give an entirely new direction to the Internet of Things.
Now, we are further going to take real use cases for the blockchain of things. This will give a deeper understanding of how these two technologies can merge or converge at particular points.
Blockchain and IoT Use Cases
As we become increasingly dependent on the devices surrounding us, we become more dependent on IoT. Even as of right now, without even realizing, we exchange data with IoT devices at various points- in our businesses as well as day to day lives. Which is why the use cases of the blockchain of things can stem from smart appliances to smart vehicles.
Here are a couple of innovative use cases for blockchain in IoT systems.
Shared Smart Cars
One of the latest trends in this industry is the emergence of smart cars. IoT sensors have given a new era to the fully automated self-driving cars. A blockchain application for sharing the network of self-driving cars can be an innovative alternative to the current centralized service providers like Uber.
A car shared between a network of participants. Rather than owning a car, shared car model opens new possibilities. On a blockchain, the ownership of the shared car can be defined. IoT devices track car usage, maintenance, usage by individuals, etc. A smart contract is formed between these users which clearly defined roles and responsibilities such as- Who pays for maintenance, number of commute hours for each individual, fuel usage for each individual, etc.
A blockchain wallet can also be set among these individuals. The fuel charges, maintenance charges can automatedly be deducted from the wallet.
Another market, which holds value for blockchain and IoT is the renewable energy source market. Using smart metering and renewable sources such as solar rooftops, individuals can track their energy usage as well as produce energy.
Now consider a peer to peer energy trading platform. Users can trade off the excess energy produced in their houses and can consequently earn energy credits for engaging in renewable sources of energy. This peer to peer platform is possible with blockchain and tracking of energy, usage, production- can be made via smart devices. With blockchain, it becomes possible to share the renewable sources of energy as well as trade energy tokens, just like shares.
The energy grid surplus encourages users to build more sources of renewable energy, build new income streams, reduces energy waste, helps in giving uniform supply, as well as cost-effective utilities to the masses.
Blockchain and IoT Energy Example
Powerledger, a blockchain, and IoT focussed initiative has developed a software which allows peer-to-peer energy trading from rooftop solar panels. Using blockchain technology in order to empower households to trade their excess rooftop solar power with their neighbors.
Whether we know or not, we now have a growing inclination towards smart devices. Smart television, smart home appliances, smart air conditioners, even smart ‘Alexa’ assistants- even unknowingly, we have been used to it.
But, one of the rising concerns of these devices is they highly lack data security. We are yet to reach a point of unhackable security with these IoT devices. Systems such as smart lock in place, if compromised or hacked, can lead to safety concerns with consumers. Additionally, the information is on centralized cloud storage. It becomes relatively easy for hackers to retrieve the data
Blockchain technology encompasses cryptography so as to make the transmission of data more secure. Secured identification on blockchain-enabled devices will provide much secure environment than the current infrastructure. One step further, blockchain also uses decentralization and hence the data collected from smart appliances will be stored on a decentralized network. This relatively makes it more difficult for hackers to access the data.
Supply Chain Management and Logistics
Supply chain industry is among the top 5 industries having potential use cases for blockchain and IoT.
The growing complex industry is multi-layered with a lack of interconnections. Data flow, multiple stakeholders, repetitive interactions, complex procedures- fill-up the myriad of problems faced by the supply chain sector.
The integration of smart sensors tracking movements of individual products, freight or career are placed. Tracking sensors such as temperature and location movements are placed. Now, these sensors directly relay the data collected and pass to a blockchain platform. This directly reduces the amount of paperwork as well as the interactions needed to process certain actions. Products or freights can also be given digital identity in order to track and trace each action, ownership transfer and recording its specific history.
Another use case for integrating the two technologies is automated operations via smart contracts. An automated smart contract with predefined conditions helps in reducing the number of decisions to be made. IoT devices interact with smart contracts and in turn, these contracts perform actions based on the data supplied.
Blockchain and IoT Supply Chain Project
Ambrosus is a blockchain-powered IoT network for food and pharmaceutical enterprises, enabling secure and frictionless dialogue between sensors, distributed ledgers, and databases to optimize supply chain visibility and quality assurance.
Tradelens, by IBM, is another project of blockchain and IoT in the supply chain. It combines Blockchain and IoT to reduce the cost of global shipping, reduce the paperwork, and increase the visibility across the supply chain.
In these two modules, we have explored how distributed ledger technology can provide relevant enhancements to the Internet of Things. But, the story is far from over. Blockchain technology faces its own sets of challenges such as scalability and on-field expansion. Granted, it has a varied number of use cases considering its characteristics. However, it is yet at a very primary stage.
Other than blockchain, other emerging innovations such as big data, robotics, artificial intelligence- have also been recognized as the game changers, paired with Internet of Things (IoT).