Blockchain technology is far from ubiquitous, but the internet of things, or IoT, has permeated nearly every industry and sector. Analysts have estimated there would be 11.2 billion connected devices this year. From Amazon’s Alexa to connected sensors in factories and the growing number of drones, the IoT has arrived.
Yet, it may be blockchain that helps IoT reach its full potential, so long as key hurdles can be overcome.
That’s the premise of a joint study by the Boston Consulting Group and Cisco Systems, which argues that challenges ranging from a lack of standards to security and privacy concerns have slowed the adoption of IoT, and that integrating blockchain technology may provide solutions.
When it comes to blockchain and IoT, the bigger issue is understanding the relationships among different partners in a connected network of businesses.
“It’s yet to be proven, but we think blockchain and IoT start to bring that together full circle,” Anoop Nannra, head of blockchain initiatives at Cisco and chairman of the Trusted IoT Alliance, tells ThirtyK. “We want to make sure we start asking the right questions about blockchain and interoperability so we don’t relive the situation we’re in right now in IoT.”
Many Use Cases
The BCG-Cisco study found 35 use cases involving a combination of blockchain and IoT technology, including supply chain operations visibility, interactions among smart appliances, smart cities, car leasing and ride sharing, and smart-vehicle charging and fueling. But only about one-quarter have moved beyond the proof-of-concept phase and are ready for production, according to the report.
Some IoT-blockchain use cases, including the kinds of supply chain-focused operations tracking and provenance solutions that have driven enterprise technology development, have advanced more quickly and are now moving into production. For its part, Cisco is exploring the use of blockchain and IoT in provenance solutions for the anti-counterfeiting measures in its own complex supply chain, according to Nannra.
While industry standards, data models and interoperability are well-known challenges that must be resolved in both blockchain and IoT, Nannra argues that the bigger issue is understanding the relationships among different partners in a connected network of businesses.
“When a collection of individuals and enterprises come together and understand their complementary role in the ecosystem, that will change the way we think about blockchains, not as services and markets but [determining] the minimum viable ecosystem that is required,” he says.
