How-to-Blockchain: IoT on the Edge
Blockchain, a word synonymous with cryptocurrency, is starting to find its way into many different applications. What, you might be asking yourself, is the blockchain? This post aims to help you out by accomplishing these two main objectives:
1. Explain blockchain in a way that will help you sound like you know what you are talking about at parties (beginner’s walk-through)
AND
2. Discuss a novel concept I believe is uniquely positioned to take advantage of the blockchain (more technical discussion)
If you want a beginner’s walk-through only, stop reading right before we get into the “Internet-of-Things”. For a more technical discussion, read through this post as it might help you explain the blockchain to others.
What is blockchain?
The best way I have found to walk through explaining this concept starts with a bouncer at a bar. In a traditional centralized network, the security focus would be on the front door and ensuring that the bouncer is the biggest, toughest, meanest person out there to both deter attacks and ensure no bad/underage people get into the bar.
Now let’s visualize a decentralized network and how blockchain would secure the bar. The security guard would still be present, but this is a locals-only blockchain bar. In this bar, a patron can’t have a drink unless the majority of people present in the bar verify that a customer is both able to pay for the drink (because she has in the past) and that they are of-age and should be there in the first place. Each of the beers drank would be kept on the counter to show to everyone just how many beers she could drink. This scenario demonstrates a couple of important ideas:
- The system has a majority-verified record of all transactions or digital events among a group of participants.
- Information, once entered into a database, can never be erased (demonstrated by the finished beers on the counter). With the blockchain, users are allowed to add to the system on an “amend only” basis, which is in contrast to the traditional “read/write/edit” database functionality.
Venmo, an application which sends money between two known entities, is considered a trusted third party which verifies transactions. I recently completed the sale of a ticket by connecting with an interested buyer on Craigslist, meeting in a local parking lot, then receiving money from her via Venmo. The blockchain creates a legitimate distributed peer-to-peer network where non-trusted members can interact with the network without a trusted intermediary. If you are thinking this will make it easier than ever to conduct illegal transactions, the blockchain contains a verifiable record of every single transaction ever made. There will absolutely be abuses of this system, but there is also a long line of where the currency has traveled that will always be possible to trace.
In the rest of this blog, I am going to touch on a use case I think is particularly exciting and leave you with one more application to explore further, both of which are outside Bitcoin.
Internet of Things
The issues with the internet of things:
- Cost — High volumes of data created by the devices, and the requisite the analytical processes, will only increase with time.
- Security — Huge volumes of data are collected from these devices. This massive trove of privacy data is a juicy target for bad actors. Hacked Internet of Things (IoT) devices have also been used to cripple websites with distributed denial of service (DDoS) attacks. Each one of these devices is an entry point into the network.
- Architecture — Centralized cloud platforms remain a point of friction in a complete end-to-end IoT system. In my example with the bar checking IDs above, the bouncer is a both a chokepoint and a central point for attacks
Cost
Blockchain processing tasks are computationally difficult and time-consuming. One of the larger bitcoin mining operations, located in Xinjiang, China has about 25,000 mining machines and consumes 800 megawatt hours per day. This works in the blockchain’s favor as the need for heavy computing power helps protect the integrity of the chain (essentially more people in the bar).
In an article detailing his opinion of the main limitations of blockchain, Bill McCabe states,
“By design, the technology is made to deter fraud by making it economically and sometimes practically unviable. There’s no denying that as a chain grows, fraud becomes virtually impossible. Unfortunately, this also means that the entire chain becomes computationally intensive and slower to verify records; which is one of the biggest limitations preventing blockchain from being widely implemented today.”
From McCabe’s comments it appears as if the extremely slow latency of the blockchain framework is a deal breaker for IoT technology. The speed of adding blocks to the blockchain is based on the computational power of its users. The problem of needing an exponentially larger amount of computational power to add blocks to the chain will not magically go away with just more horsepower (read:cost). Distributed computing is another answer [more info].
The ability to distribute computing by sharing excess capacity will be a key component to generating this power. This blockchain-enabled disintermediation (big fan of this word, could be the worthy successor to the overworked “#disrupt”) creates a marketplace for bringing together the users and suppliers of computational ability.
By moving devices from the cloud and onto edge hosts we can ensure minimal latency and realize a massive reduction in network traffic on IoT devices.
Security
R&D magazine interviewed Ahmed Banafa (here) an IoT expert and faculty member at San Jose State University. Ahmed explained,
“The IoT ecosystem has multiple levels. The weakest one is the sensor — when you have all of these sensors gathering information it can be an access point for the hackers. You can secure connections between all of the sensors within a certain area using blockchain by using programming language where several sections within the program have to identify that each transmission is known to them, and is understood, according to a certain algorithm. For example, if someone is trying to send you information about the temperature and the temperature is coming in a certain way within a certain parameter than it will be accepted.”
Manufacturers are building IoT into pretty much every new device coming to market which could turn into a security nightmare.
How entrepreneurs are trying to solve this problem
Researchers at the University of New South Wales in Sydney, Australia have developed a new concept of a blockchain-secured smart home. Instead of the typical media center available in a home, a high-powered block miner would take its place in managing all communication between the home and external sources. This miner would take care of this private blockchain, which would ensure the security of data exchanged between IoT devices and the outside world. Any device effected by an outside actor would be seen by the “miner” which would then be blocked by the device’s data packets from leaving the home.
Architecture
The centralized security model common in enterprise today will have a difficult time scaling to meet the demands of IoT. Because blockchain is built for decentralized control, a security scheme based on it should inherently be more scalable than a traditional one.
I got in touch with Alexandru Stanciu, from the National Institute for Research and Development in Informatics in Bucharest, Romania to understand the state of the art for integrating edge computing, IoT and blockchain. In his paper “Blockchain based distributed control system for Edge Computing” he lays out a way to move beyond simply trading cost and performance. He explained,
“On the edge computing model there is a need to have computation close to the data. However, in some use cases there is a need to have a superior level for more complex algorithms. In our case it was a need for strategic decisions regarding the operation of the distributed control system, and that part was proposed to be executed on a blockchain.”
These strategic decisions are implemented across all the network nodes via smart contracts, which are stored set procedures programmed just waiting for an event to happen in order to execute. By setting up the architecture in this way, we can make smarter tradeoffs between security, speed and cost.
Bonus Blockchain Use Case- Document Handling
I was first introduced to the first attempt at bringing the blockchain to a government by Abhi Dobhal from Factom. Peter Kirby (CEO of Factom) talks about the hurdles his company encountered while trying to go through this process here. While it is not completely clear where the project was stalled, it does seem that the problem was with the Honduran government versus the actual implementation. Implementing a blockchain backed land title system would be revolutionary in a country with little transparency in land ownership.
Hernando de Soto, the famous Peruvian economist, coined the term “dead capital”. He estimates, in his book “The Mystery of Capital”, that by providing the world’s poor with titles for their land, homes and unregistered businesses would unlock $9.3T in assets. He also argues that capitalism’s success has depended partially on a formal system of documented property — the key to unlocking capital. The blockchain could start to help equalize worldwide wealth creation tools.
That’s all for now. The blockchain will not solve all our security problems but beginning to understand some applications should give you an idea of where this technology can take us into the future. For more information, I highly recommend this quick read by Tiana Laurence, this article by Jason Compton.
—
About the author
Richard “Erik” Huckle III is a former Marine Infantry officer and summer intern at Los Alamos National Laboratory, a current student in business school at the University of Texas at Austin and a future tech product manager. He is also actively looking to get involved with or invest in projects within this space. Twitter: beyourhuckberry
