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Could Blockchain Solve IoT Security Bottlenecks?

Could Blockchain Solve IoT Security Bottlenecks?

In 1982, the idea of the internet of things (IoT) started with a soda vending machine that was connected to the internet, allowing the machine to report its inventory and whether the drinks were cold or not. This increased the efficiency of the vending machine, allowing a worker to be sent out whenever it was actually needed, and ensuring that the machine was always stocked with cold drinks.

Since then, IoT has expanded to integrate any device with internet or radio connectivity, and it is estimated that 8.6 billion devices are connected as of 2018. For example, via Apple Home, a person can control their air conditioning, heating, light, speakers, outlet, switches, windows, fans, humidifiers, air purifiers, security sensors, security cameras, locks, doorbells, and garage doors with an iPhone app. This technology has the potential to make someone’s life much easier, and it sounds like something from a futuristic sci-fi movie. However, there is a major caveat: security.

IoT security concerns

With everything in someone’s home connected to the internet, a hacker could theoretically gain access to everything in someone’s home. Imagine if a hacker who intends to rob someone’s house gains control of the garage door, windows, locks, security cameras and sensors. This hacker could literally watch via the camera and wait for a family to leave their house, and then open up the windows or garage door and turn off all the security sensors, and rob the house blind without being caught. Also, having cameras connected to IoT could allow a hacker to spy on someone, compromising the basic human need for privacy.

A real-life example of IoT being compromised by hackers is the Mirai botnet, which took control of cameras, home routers, and DVRs. This botnet was leveraged to perform DDoS attacks, and also led to device connectivity problems and the exposure of private data.

Imad Labbadi is the CEO of VeCap, a company that focuses on securing IoT powered smart homes. He says:

“There is insufficient protection, several devices from well-known companies and other vendors have serious breaches in their security systems: insufficient encryption, weak authentication requirements — for example, auto-login, possibility of external connections via VPN. All it takes is one unprotected device to compromise the security of your smart system or smart home. Hackers only need to find that one breaking point to bring down the whole network. It takes hackers less than a minute to get access to smart home devices, from phones and TVs to routers and consoles; all these machines are connected to the internet. Vast numbers of devices with zero-day vulnerabilities will be hacked as soon as the breaches become known before manufacturers will be able to update all vulnerable smart devices. Short-term thinking compromises long-term security.”

Blockchain to the rescue?

This security caveat has prevented widespread adoption of IoT. However, the security and encryption of blockchain technology have the potential to make it completely secure, which would allow it to reach its full potential and be used by people worldwide without fear of hackers.

Data stored in a properly built blockchain cannot be modified or deleted, nor accessed by anyone who does not have permission. This is because blockchain technology is built with powerful cryptography. Smart contracts on the blockchain can then be used to run IoT devices.

Cyber-Trust is a blockchain-based platform which focuses on securing the IoT. It uses HyperLedger Fabric from IBM, which is a blockchain that can handle up to 100,000 transactions per second, quite necessary for global scalability considering the number of IoT devices is expected to reach 22 billion by 2024. The updated history of an IoT device’s integrity state is stored in the blockchain, which minimizes the risk of cyber attacks by ensuring that devices have the most up to date security software. Also, in general, all IoT device actions are performed via blockchain smart contracts, which prevents hackers from accessing the devices.

Another company which is using blockchain technology to secure IoT devices is VeCap. Smart contracts are used to secure all internal communications within a home IoT system, and all data is stored on the blockchain to prevent hacking.

The need for securing the internet of things (IoT) becomes even more essential due to industrial and government applications. For example, the power company CenterPoint has 7 million customers and they have installed digital meters and internet connected sensors for a 5,000 square mile area around Houston, Texas. This allowed CenterPoint to restore power more rapidly than usual after Hurricane Harvey, but it is essential that this connected grid of devices is secured from hackers. Also, medical devices in hospitals, industrial robots, and self-driving cars use the IoT, and it could be life-threatening and costly if hackers compromised those systems.

AI and computing

Hewlett Packard has invested USD 4 billion into edge computing, which uses a combination of blockchain technology and artificial intelligence (AI) to strengthen industrial uses of IoT. For example, X-ray machines across the US download data to the blockchain every 10 minutes or so, ensuring the data and the devices are secure, and then the data is analyzed by AI to help identify diseases like tuberculosis and pneumonia. This combination of blockchain technology and IoT is being called swarm computing.

Perhaps the greatest endeavor which has combined blockchain technology with the internet of things (IoT) is IOTA, which has a cryptocurrency called MIOTA that has a market cap of nearly USD 1 billion and is ranked #18 on CoinMarketCap (at time of writing). IOTA’s developers foresee that global data pipelines will inevitably become congested, preventing IoT devices from communicating and storing all the data they produce. The IOTA network prevents that problem by funneling all of this IoT traffic into their blockchain, which has the additional effect of providing higher security and decentralizing the network, so centralized points of failure are eliminated.

IOTA uses a unique variation of blockchain called Directed Acyclic Graph (DAG), and in the specific case of IOTA this DAG blockchain is nicknamed “The Tangle”. With a classical blockchain such as Bitcoin, all previous blockchain history is required in order to issue a new transaction. With DAG however, a node only needs two previous transactions in order to issue a new transaction. This makes IOTA fast and efficient while providing the same cryptographic security as a classical blockchain.

Aside from providing a medium which can handle the storage and communication of data for all IoT devices, IOTA also creates a new system where individuals and machines pay micro-transactions for exactly what bandwidth they consume and when they consume it instead of subscription models. Also, individuals maintain ownership over their data, and they can sell their data to make money, which has applications for the big data industry.

Thus, the proliferation of IoT, which has the potential to revolutionize the way people live, has encountered a roadblock due to security concerns. However, blockchain technology appears to be the solution, and companies and organizations like IOTA, Hewlett Packard, CyberTrust, and VeCap have already successfully integrated blockchain technology with IoT, which prevents hackers from accessing IoT devices.

This merger of blockchain technology and IoT is paving the way for a future where all the devices in the world are connected, leading to a more efficient life and a more efficient economy.

 

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Central Bank of Iran Trails Blockchain to Revamp Financial System

Central Bank of Iran Trails Blockchain to Revamp Financial System

The Central Bank of the Islamic Republic of Iran aims for blockchain inclusion economy for the country’s financial system, as reported by news outlet AL-MONITOR.

According to the report, in the past year, the Central Bank, through its technology division the Informatics Services Corporation, in partnership with blockchain solutions firm Areatak, has been developing a nation-wide blockchain platform dubbed Borna. Built on the Hyperledger Fabric, the platform will onboard other banks and financial institutions to bring about seamless transactions and financial service operations.

The core principle embedded in the Borna platform is to enable the Central Bank to communicate seamlessly with other banks and financial institutions and implement directives through smart contract technology. More so, the platform is expected to reduce the effective cost of developing blockchain solutions by participating stakeholders.

The source citing the Borna whitepaper said the platform has two distinct layers. A noncompetitive layer handles know your customer (KYC) operations, token management, and online auditing services, while a competitive layer allows financial players to “offer an array of services” to include “accepting deposits, offering loans, commercial financing, and asset management”.

It appears Borna has a political incentive for developing the platform on the Hyperledger architecture, as it will enable them to connect with international allies in the future without being crippled by US sanctions.

Further, another major milestone for the Central Bank will be to issue a sovereign rial-backed cryptocurrency to facilitate transparency during local transactions. This cryptocurrency may as well be integrated to the Borna platform, the source indicated.

Earlier this year, the Central Bank of Iran released a draft on cryptocurrency regulations, thereby slightly lifting a blanket-ban it had previously placed on the emerging asset class – allowing for trading of the digital asset class but prohibiting its use as a medium of exchange within the walls of the Islamic country.

On the subject of blockchain development in Iran, there appears to be sufficient evidence the financial system is receptive of the blockchain industry and continues to drive initiatives towards an inclusive global blockchain economy. In February, Bitcoin News reported four Iranian banks working with blockchain startup Kuknos to develop a gold-backed cryptocurrency.

 

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IBM Launches Australian Blockchain Cloud Service, Second to Follow

IBM Launches Australian Blockchain Cloud Service, Second to Follow

IBM’s platform built on Hyperledger Fabric has launched its blockchain main net at its Melbourne-based data center in Australia.

Hyperledger is an umbrella project of open source blockchains and related tools, started in December 2015 by the Linux Foundation and supported by big industry players like IBM, Intel, and SAP to support the collaborative development of blockchain-based distributed ledgers.

The launch allows IBM customers to run their applications on the company’s cloud. A second Australian center is also planned for the end of March in Sydney. IBM Australia’s Head of Blockchain, Rupert Colchester, said that a second center would make the technology more widely available, adding, “Customers who are deploying blockchain applications have reached a maturity of projects that requires the data to be stored in Australia.”

Colchester highlighted the degree to which blockchain technology was now being used across all industries in Australia with many IBM clients now “trying to understand how best they can apply it to the business problems they have”.

An example of the growing use of blockchain at the corporate level in the country saw Australian real estate company Vicinity adding blockchain to its business operation in tandem with Australian energy tech company Power Ledger as part of a USD 75 million solar program, late last year.

 

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NASA Looks to Blockchain for Air Traffic Management

NASA Looks to Blockchain for Air Traffic Management

The United States National Aeronautics and Space Administration (NASA) is examining the potential of employing a management blockchain to enable secure, private and anonymous communication with air traffic services.

The prototype has already employed Hyperledger and has proven to researchers that this infrastructure would offer rapid deployment at an affordable cost. The paper published by NASA highlights the benefits of the system:

“This framework features certificate authority, smart contract support, and higher-bandwidth communication channels for private information that may be used for secure communication between any specific aircraft and any particular authorized member.”

Another system planned to be launched soon, the Automatic Dependent Surveillance System (ADS-B) which will be mandatory by 2020, has had teething problems. This is mainly due to its susceptibility to third-party spoofing, the reporting of false airport positions, as it publicly broadcasts aircraft positions. NASA researchers have suggested this privacy problem could be overcome by implementing cryptography.

The new Aviation Blockchain Infrastructure (ABI), based on Hyperledger Fabric and smart contracts, would allow control over what data is shared publicly or privately with authorized entities.

NASA has been making blockchain history since its announcement last year that it would fund and co-run a research project utilizing Ethereum blockchain smart contracts in safeguarding deep space travel. That project focused specifically on implementing the technology in improving space communications, ensuring navigations that take place are safer and more efficient. Even earlier in 2017, NASA awarded a USD 330,000 grant to support the development of a blockchain-based spacecraft system.

In December 2018, development firm Blockstream launched a fifth satellite which now broadcasts the Bitcoin blockchain back to Earth.

 

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German Central Bank Hails “Success” of Two Blockchain Trials

Germany’s central bank, Deutsche Bundesbank, has successfully completed two blockchain trials during its collaboration with Deutsche Börse, owner of the Frankfurt Stock Exchange.

The two blockchain prototypes were designed to test the technology’s potential in securities settlements, transactions, and payments, as well as bond repayments.

A joint press release on Thursday reveals that these aims were ”successfully” achieved, with the prototypes facilitating “productive operation of a realistic financial market infrastructure”.

Developed on Hyperledger Fabric and created by Digital Asset, the prototypes come from a joint blockchain research project dubbed BLOCKBASTER. The collaboration came together with the goal of developing a blockchain framework to transfer and settle securities and fiat currency.

The press release pointed to the recent upgrades on both Hyperledger Fabric and Digital Assets, saying they may well benefit the performance or the prototypes further if they are updated.

Berthold Kracke, CEO of Clearstream Banking and head of Clearstream Global Operations at Deutsche Börse Group, praised the tests for proving that blockchain can be the basis for financial settlement applications, as well as potentially for other financial infrastructures.

Burkhard Balz, member of the executive board at Deutsche Bundesbank, said that the positive results have encouraged them to continue experimenting with relevant blockchain use cases and pursue the implementation of the two prototypes further, citing that in particular, he sees a future use for them in processing ”high-volume applications”.

Blaz noted that permissioned blockchains have proven to serve the needs of the financial sector well, while Kracke finished, ”We are very happy with the results of the project… we were able to tailor the product to the needs of the industry.”

Deutsche Bundesbank is not the only central bank conducting blockchain tests, with the likes of Canada and South Africa already hosting similar trials.

 

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