Blockchain: an internet we can trust?
From securing virtual currencies to cars that pay for themselves, blockchain is going to disrupt everything
Securing the Internet of Things
However, blockchains don't only work in the authorities' favour they can be the consumers' friend, too. One area in particular where blockchains could protect people is by helping to safeguard data held by Internet of Things (IoT) devices.
Today, devices such as fitness bands, medical sensors, voice assistants and other IoT devices collect large amounts of sensitive, personal data and feed it back to the manufacturer. "We have lots of manufacturers who make devices, and those devices talk just to the systems that the manufacturers provide," said Paul Fremantle, a doctoral researcher at the University of Portsmouth, who has devised a method of securing Internet of Things devices with blockchain technology. "Nest only talks to Google's back-end, Fitbit only talks to Fitbit's back-end. These devices are hardcoded to talk to their mothership."
Fremantle says there are two problems with this siloed approach. First, there are many manufacturers out there who don't really want to be in the hardware business, they simply see a value in collecting all this personal data. Then there are the cheap box-shifters who are flooding the market with low-cost devices, but who have no incentive to provide security updates, leaving millions of devices vulnerable to attack.
If devices were connected to a blockchain, however, consumers could be selective about which data they're prepared to share with manufacturers and other companies. Smart contracts between the user and the maker could also deliver a stiff financial rebuke to companies playing fast and loose with your private data. "If you're caught using this data in ways that you shouldn't, breaking that contract, then there is a payment made to the person," said Fremantle. "Instead of having to take the manufacturer to court... the system would automatically pay people. That would be a massive disincentive for people to misuse data."
What's in it for the device makers? "There are manufacturers who don't want to infringe privacy," insisted Fremantle, whether that's because they fear being sued or because they're dealing with highly sensitive information such as health data. But there's also a financial reward, "if they can be incentivised via a blockchain to do the right thing".
"Blockchain could be a means of paying manufacturers for updates," Fremantle suggested. Plus, using a distributed blockchain network means manufacturers don't need to invest heavily in their own cloud provision. "It could be something that smaller manufacturers jump on."
One potential obstacle is that IoT devices generally don't have enough processing grunt to query a blockchain. It "takes at least 512MB of RAM and a 1GHz processor to participate," Fremantle noted in his white paper. But the ever-increasing processing power of mobile devices could soon make such concerns moot.
There's virtually no industry, no application, where someone isn't considering a blockchain alternative. Indorse, for example, is a blockchain-based social network for professionals a rival to LinkedIn that promises to reward endorsements from fellow pros. Users are asked to submit "claims", such as earning a qualification, writing an article or something as prosaic as learning to play the piano. Those claims are anonymously endorsed by other users of the network, boosting your reputation and earning both you and the person who endorsed you an "Indorse buck". These bucks can be converted into tradeable tokens, which can be used to purchase advertising on the site or other services. In short, you're getting something in return for sharing your data or expertise.
This "decentralised professional network" is powered by Ethereum, which allows participants to be paid for completing "smart contracts" with the Ether cryptocurrency. Recently, the value of the Ethereum currency has been rising so rapidly that it led to a surge in the price of GPUs. Why? People were so keen to join the gold rush that they were going out and buying high-powered PCs that could be used to mine the currency, in much the same way there are a few people sitting on a fortune's worth of Bitcoin that were mined in its early days.
Ethereum is also the fuel behind another startup called Slock.it. The company aims to power smart locks on anything from apartments and rented offices, to bikes and lockers. Once again using the principle of smart contracts, you could pay to rent an apartment on Airbnb, for example, and Slock.it would automatically open the front door when you press "unlock" in a smartphone app.
The smart locks or Slocks are controlled by "The Ethereum Computer", open-source software that can be imaged onto low-cost devices such as the Raspberry Pi or Samsung Artic platform when it's released later this year, allowing developers to create their own smart lock products without having to invest in a huge cloud infrastructure.
Car, manage thyself
The most exciting, and terrifying, potential for blockchain-based smart contracts is that they will conceivably allow devices to manage themselves. Take cars, for example. Firstly, the idea of hiding a car's mileage and maintenance history from potential buyers can be avoided by logging all repairs and MOTs in a blockchain.
However, the entire concept of car ownership is being threatened by autonomous vehicles, with self-driving cars likely to become similar to public transport cars will arrive at your house on demand, take you to where you want to go, and then set off to pick up the next passenger.
Smart contracts could even let the car become financially independent. The car could pay for its own spot in long-term parking if there aren't enough fares to make working worthwhile that day, or even move to a new city where demand is higher. In the same way we pay for pensions, it could set aside some of the fare from each journey to fund repairs or even a replacement vehicle for when it reaches the end of its useful life. If it hasn't got enough money in the retirement pot, it could sell tokens to private investors to pay for the replacement, and then give them a percentage of future fares as part of another smart contract. The car's not only plotting its own route, its plotting its own destiny.
Blockchain will massively increase the trust we can place in online transactions. The big question we now must ask ourselves is: can we trust the machines to manage themselves?
In This Article
Activation playbook: Deliver data that powers impactful, game-changing campaigns
Bringing together data and technology to drive better business outcomesFree Download
In unpredictable times, a data strategy is key
Data processes are crucial to guide decisions and drive business growthFree Download
Achieving resiliency with Everything-as-a-Service (XAAS)
Transforming the enterprise IT landscapeFree Download
What is contextual analytics?
Creating more customer value in HR software applicationsFree Download