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February 25, 2015, 01:15:00 PM |
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Blockchain brings The Internet of Things
The Internet of Things has become a hot topic once again thanks to a groundbreaking announcement by IBM. The 200+ billion-dollar company has revealed its plans to get in on the action, and they’re going to use blockchain technology to do it, bringing yet another major firm on board the decentralization bandwagon.
What is the Internet of Things, you ask? It is the idea that all devices should be connected to the Internet, including household items like washers, dryers, refrigerators and more. It might sound like a house from the future, but the reality is almost upon us, and it will change our lives.
The Internet of Things (IoT) would give appliances new levels of functionality. IoT-enabled products in the same home could form local networks, capable of remote monitoring and control by a hierarchy of residents with the homeowner(s) at the top. Devices could cooperate for optimized performance–for example, if too many devices were on at the same time, non-critical ones could power down to prevent an overload.
Every device’s performance could be measured and analyzed, stripped of personally-identifying metadata, and sent to its designer and manufacturer for generational improvement. Devices could automatically detect and download software updates (with a notification if the ToS changes), or even request maintenance, and “the owner and the vendor can negotiate … the time at which the service professional will arrive,” as explained by the IBM draft paper.
All of this as a dark side, however. At the very least, we know this will be used for marketing purposes: companies will want to know how and when we use products, not just to improve design, but to improve their advertising effectiveness. The associated name might be “John Doe,” but they will have a file containing everything you do at home.
And what if the name isn’t “John Doe”? No doubt, several security analysts just laughed at the phrase “stripped of personally-identifying metadata,” and that’s absolutely not how leaders in Washington, Moscow or Beijing want to use this technology. They could potentially see everything we’re doing, and surreptitiously manipulate or even hijack our personal property.
The Blockchain
Bitcoin’s blockchain technology is the answer to this and other criticisms of the Internet of Things concept, allowing us to keep a secure historical record of all Things without a central authority. If each device and its current state were stored in blocks, they could gain the benefits of such a global network without the major drawbacks.
Using blockchain technology, we could make the IoT into a decentralized network, operating with a peer-to-peer, meshnet-like protocol and structure. This would circumvent the control of any central authority, and definitively answer the question of whether or not technology will put too much power in the hands of the government (it won’t). User-authorized companies, however, would still get the same functionality.
The ideal blockchain for the Internet of Things would be a pseudoanonymous one similar to Bitcoin’s. Each device would be listed with its current state (such as on/off, network location, etc), which would be manipulable in a pre-determined manner by those with the correct private keys. The owner gets a master key, while subkeys are given to those with user privileges. Identifying who has the keys is unnecessary.
Eventually, the applications and third parties IoT devices interact with will also be decentralized, taking things even further. Concepts like MaidSafe and Storj–both of which use the blockchain to some degree–would allow marketable network data to be collected and analyzed without the possibility of human interference, or any central point of failure, at all. Participants could be automatically rewarded with cryptocurrency, much unlike your posts to Facebook.
With this set-up, the IoT could perfectly account for every device in a transparent way, without directly connecting them to identities. An extremely clever and dedicated detective could still figure it out, however, by looking at what he or she knows you to have ownership of or access to and comparing. Once you’ve been connected to one, we can connect the dots to others, piecing together your private life.
Even more crippling, problems of scale will quickly arise as tens of billions of Things around the world go online. There will be so many that we will require the new IPv6 Internet protocol to handle that many IP addresses. Given the rapid-fire speed with which many devices communicate, the blockchain would quickly be flooded with transactions.
The Factom Solution
“Multiple efforts like sidechains, treechains, and mini-blockchains are ongoing to address this problem,” as the IBM team noted. Factom is among these, a Bitcoin 2.0 solution that tackles several problems with the Internet of Things at once–all with the power of the hash.
For the mathematically disinclined: hashing is the process of taking a numerical value of any size and compressing it into a fixed length, in a manner that cannot be reversed. Cryptocurrencies use what’s called a Merkle function, which combines and hashes the data two at a time to form a “Merkle tree,” coalescing in a final value called a “Merkle root.” It is trivial to prove whether or not any number was used to calculate the root, without any additional information.
Factom utilizes this to provide a universal proof of existence: it takes snapshots in time, every one minute, of every document, photo, video, and decentralized application on the network. Each snapshot consists of the associated data as it was at that time, which is arranged into a series of Merkle trees and distilled to a single hash value, to be inserted ten at once into every Bitcoin block.
This is designed to combat the problem of “blockchain bloat,” a term used by critics in reference to non-currency data in transactions on the blockchain, which they claim will swell its size to unmanageable levels. No matter how many Things appear on the Internet, their final Merkle root will be small enough to fit inside a single Bitcoin transaction.
This saves us lots of bitcoins on transaction fees, as well. The operations are conducted on a separate P2P network made of Factom users and servers; the servers secure the network, and are rewarded with Factoids for doing so. Factoids are needed to make Entry Credits, which users need to interact with the Factom network. If anyone tried to fake Factom data for financial gain–such as by forging corporate account statements to steal funds–their data would fail to hash to the value stored on the Bitcoin blockchain.
As a final benefit, Factom’s organizational structure would render it far more difficult to spy on your activities. Data for any particular file, application or Thing on the Internet is contained in its own “Entry Block” upon being hashed and entered. The Entry Blocks for a given file or application, which form a record over time, and grouped into what’s called a “Factom Chain.”
Applied to the Internet of Things, we’d see individual Factom Chains for each Thing or group of Things, and those chains need only be accessible to the authorized users. For additional security, we could utilize additional blockchains with their own mining systems–one for each Thing or Thing group–and have Factom hash the Merkle roots of those. Normally, those sub-blockchains would be vulnerable to attack, but with Factom they’re backed by the full strength of Bitcoin.
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