The internet of blockchains, or something
I’ve said a few times that I think the Internet of Things is where mobile was a couple of decades back.
Some of us had mobile phones, and we loved them, but we really didn’t see what they were going to turn in to. I mean, I was always bullish about mobile payments, but even so… the iPhone 6s that’s next to me right now playing “Get Out Of Denver” by Eddie & the Hot Rods out through a Bluetooth speaker is far beyond anything that I might have imagined when dreaming of texting a Coke machine to get a drink. We’re in the same position now: some of us have rudimentary Internet of Things bits and bobs, but the Internet of Things itself will be utterly beyond current comprehension.
“Specialized elements of hardware and software, connected by wires, radio waves and infrared, will be so ubiquitous that no one will notice their presence”
That was Mark Weiser’s prediction of the Internet of Things from 1991. It seems pretty accurate, and a pretty good description of where we are headed, with computers and communications vanishing from view, embedded in the warp and weft of everyday life. What I’m not sure Mark would have spent much time thinking about is what a total mess it is. Whether it’s wireless kettles or children’s toys, it’s all being hacked. This is a point that was made by Ken Munro during his epic presentation of smart TVs that spy on you, doorbells that give access to your home network and connected vibrators with the default password of “0000” at Consult Hyperion’s 19th annual Tomorrow’s Transactions Forum back in April. I’d listen to Ken about this sort thing if I were you.
“Speaking during a Q&A session for the upcoming CRN Security Summit, Ken Munro, founder of Pen Test Partners, claimed that security standards are being forgotten in the stampede to get IoT devices to market.”
We’ve gone mad connecting stuff up, just because we can, and we don’t seem concerned about the nightmare in the making. I gave a talk about this at Cards & Payments Australia. The point of my talk was that I’m not sure how financial services can begin to exploit the new technology properly until something gets done about security. There’s no security infrastructure there for us to build on, and until there is I can’t see how financial services organisations can do real business in this new space: allowing my car to buy its own fuel seems a long way away when hackers can p0wn cars through the interweb tubes. I finished my talk with some optimism about new solutions by touching on the world of shared ledgers. I’m not the only one who thinks that there may be a connection between these two categories of new, unexplored and yet to be fully understood technology.
“Although I’m a little skeptical of the oft-cited connection between blockchains and the Internet of Things, I think this might be where a strong such synergy lies.”
The reason for the suspicion that there may be a relationship here is that one of the characteristics of shared ledger technology is that in an interesting way it makes the virtual world more like the mundane world. In the mundane world, there is only one of something. There’s only one of the laptops but I’m writing this post on and there’s only one of the chairs that I’m sitting on and there is only one of the hotel rooms that I’m sitting in. In the mundane world you can’t clone things. But in the virtual world, you can. If you have a virtual object, it’s just some data and you can make as many copies of it as you want. A shared ledger technology, however, can emulate the mundane in the sense that if there is a ledger entry recording that I have some data, then if I transfer the data to you, it’s now yours and no longer mine. The obvious example of this in practice is of course bitcoin where this issue of replication is the “double spending problem” well known to electronic money mavens.
“The idea of applying the blockchain technology to the IoT domain has been around for a while. In fact, blockchain seems to be a suitable solution in at least three aspects of the IoT: Big Data management, security and transparency, as well as facilitation of micro-transactions based on the exchange of services between interconnected smart devices. “
The idea of shared ledgers as a mechanism to manage the data associated with the thingternet, provide a security infrastructure for the the thingternet and to provide “translucent” access for auditing, regulation, control and inspection of the thingternet strikes me as an idea worth exploring. That’s not to say that I know which shared ledger technology might be best for this job, nor that I have any brilliant insight into the attendant business models. It’s just to say that shared ledgers might prove to be a solution a class of problems a long way away from uncensorable value transfer.