What does blockchain mean for business and IoT?

Blockchain continues to enter into the mainstream business market at a fast pace, while moving into other industries outside of the financial services and banking industries. In addition to core business applications, blockchain is also being explored as a possible security solution for the broken and unsecure connected devices and IoT market space. But I wanted to look at blockchain from a business aspect, and explore how it’s expected to impact businesses, as well as emerging as a tool to secure the Internet of Things.

Blockchain for business

Before we dive in, let’s get our arms around what blockchain is and discuss this in simple to understand terms. Blockchain allows the secure sharing of business processes (contracts, business records, business activities, or other records) between companies and partners (business peer network) in an encrypted manner. As information or records from a business or partner is created (call it an event, transaction, or element), those events are added to a growing chain of events that are all secure and encrypted. What is interesting about blockchain, is when events/elements are added they become permanent and can NEVER be changed, edited, or deleted and become transparent to all parties within the network or chain. This essentially creates an accurate history of business transactions, activities, or elements.

Compass Intelligence, LLC

IBM perspective & supply chain management

One of the most leading use cases for blockchain in business is supply chain management or tracking goods and services as they move from point A to point B. According to IBM:

“Blockchain is already making a difference across a range of industries. For example, U.S. retailers Walmart and food and drink giant Nestlé are deploying the technology to create greater transparency around their food supply chains in order to reduce the risk of foodborne diseases. And Everledger is using Blockchain to help businesses to track the provenance of a diamond throughout its supply chain, tackling unethical miners and dealers. The potential applications are manifold – and exciting.”

IBM also notes that several blockchain consortiums are being formed, and this may be where businesses can learn, explore, and get involved.

IoT and blockchain opportunities

One of the largest roadblocks for IoT adoption for businesses has been the vulnerabilities that connected devices and assets present to potential cybersecurity and network security present. As such, the industry continues to explore new avenues to secure the connected assets (devices, equipment, fleets, etc.) and provide for end-to-end encryption and reduce failure points. Because the supply chain is a major component of sensor systems and tracking/monitoring of assets leveraging IoT technologies, the supply chain opportunity is one of the largest opportunities where blockchain can be used. In addition, as we move assets throughout the supply chain, blockchain will both remove duplication and provide for more secure tracking and monitoring. This would also apply to fleet management, the delivery of goods and services (cold chain, transportation, etc.), and even better enable data logging automation requirements for fleets.

In addition to records management and supply chain management solutions around IoT and connected assets and fleet, cyber security related to connected devices is the other burgeoning opportunity for blockchain. The decentralized nature of blockchain is just what the doctor ordered to better manage and secure the host of connected and IoT devices on the market. Most cybersecurity breaches revolve around the hacker getting access to sensitive and vital company, patient, personal information. Blockchain provides for encryption and access controls that may be beneficial to connected devices that have been known to allow for an open back door into the corporate network. Based on the Forbes article:

“Just using blockchain to register a device doesn’t get you much,” said Thomas Hardjono, chief technology officer of MIT Connection Science. “We need infrastructure to manage devices and control who has access to data.” In a recently published paper, he argued that some or all of these parties could be allowed to license or sell anonymized data coming from IoT devices. Receiving the data could create incentives for outside agencies to participate in the blockchain, bringing additional CPU power to support the health of the system.

Other use cases

• Banking & financial transactions
• Mortgage and real estate transactions
• Contract management (corporate contracts, legal documentation)
• Regulatory compliance and auditing
• Medical health records and privacy control
• Insurance claims
• Media and advertisement
• Content management and distribution