A projected 10 billion more devices will be connecting to the Internet in the next four years. The business potential behind that number is huge, but so are the challenges the IoT ecosystem faces. In fact, reflecting on the last decade of IoT, projections in both revenues and adoption rates have fallen short. The space suffers from a wide range of barriers hindering its growth
- High fragmentation of architectures, protocols, standards
- Low integration, low interoperability
- Major (and growing) security vulnerabilities
- Unclear data protections, data consent, data ownership
- Unclear regulations and device compliance regimes
- Costly partnerships and ecosystem integrations
- “Ecosystem-based” business models difficult to realize
- Consumer value unproven
- Competitive shifts cannibalizing market shares
While blockchain technologies remain in the early, even embryonic days, they introduce new design configurations and data authentication, security, and sharing mechanisms that could evolve the IoT narrative. Today, we’re connecting ‘things’—appliances, devices, machines, infrastructure—but the vision for this technology is far more than connecting. It is about interconnecting and extracting information between these things; and building the infrastructure for autonomous networks. Such a network of intercommunicating objects requires a secure and efficient way to track the interactions, transactions, and activities of every “thing” in the network. It also requires a way to define value by how an entire ecosystem of constituents (e.g. businesses, municipalities, service providers, consumers, etc.) integrates, protects, and leverages product data contextually.
Such a universally shared architecture does not exist today.
While it is unlikely this will manifest as a single ‘mother’ architecture, the notion of distributed record-keeping and smart contracts (embedded governance) and cryptographic security techniques are inherent to blockchain. The ability to divide transactions to the 8th decimal point make microtransactions a feasible way to re-think monetizing machine-to-machine or person-to-machine interactions. In our research report The Internet of Trusted Things, we examine the use cases for anchoring machine identity, interactions, and transactions to blockchain or distributed ledger technologies. What becomes clear is the incredible complexity of the lifecycle of any product.
- Multiple companies involved across supply chain and product life
- Multiple users with different roles, access, personas
- Other devices and connectivity protocol (especially in an IoT context!)
- Multiple data sets, software updates, security patches, APIs, etc.
This lifecycle didn’t demand much monitoring or continuity in an analogue world, though the opacity in the supply chain has been costly for companies. But the digitization of products, services, consumers, and supply chain itself has opened up new visibility and interactions that create value. The problem is we can’t yet secure, authenticate, audit, or trust these interactions—a requirement for the next phase of digital: autonomy.
The ways that distributed ledger technologies, smart contracts, and token economies introduce new methods for monetization are vast, and we’re only scratching the surface with current blockchain-IoT projects. We recently partnered with Venture Beat for a webinar to explore this topic, discuss our new research, hear from those working on projects in healthcare, financial services, identity, and beyond. In the webinar we discuss:
- What distributed ledger technologies such as blockchain mean for businesses in 2018?
- How blockchain for IoT can build trust between people and parties who transact together, reduce costs, and accelerate transactions
- The future IoT business models and what it DLT means for autonomous products and services
Check out the full webinar recording below: