Blockchain: From The Internet Of Things To The Internet Of Value

The integration between IoT and blockchain enables the transformation towards the Internet of Value. Thanks to the distributed ledger technique, data and information are managed in a transparent, traced and unchangeable way. It is known that the Internet of Things is based on the concept of “intelligent” objects that can exchange and share information among themselves, thus generating an ecosystem in which each object acquires its own digital identity and collaborates with other objects in an interconnected way. 

The IoT is not just a purely technological concept but impacts all objects (smartphones, appliances, cars, production plants, etc.) used in daily life; all these objects exchange data and information that can make the whole ecosystem more efficient. The integration between IoT and blockchain allows us to enhance this information, making it trace, transparent, and verifiable by all the objects part of the ecosystem. Thus, the Internet of Value was born.

Internet Of Things, Some Preliminary Considerations

To understand how IoT and blockchain can be integrated, it is necessary to take a step back and summarize the prerogatives of this technology. The IoT has evolved in a disruptive way from a technological point of view and a cultural point of view; today, the meaning of IoT goes far beyond the simple definition as it revolutionizes the context in which it is used holistically. At the base of this revolution, there is the concept of the interconnection of “intelligent” objects that exchange information and data among themselves.

IoT can be seen as a path of technological and cultural innovation in which things become part of an ecosystem, thus generating changes in terms of process and methodological approach. Therefore, it can be said that technology enables a transformation that has a 360-degree impact on the context in which it is used; it is reductive to speak of IoT from a purely technological point of view. At the same time, it is essential to understand which are the enabling technologies that allow the introduction and support of the so-called “IoT ecosystem”; today, the IoT is based on a combination of technologies that have existed for some time:

1. Device: are the “intelligent” objects that are part of the IoT ecosystem; they transmit and receive data, generating bi-directional information flows;
2. Sensors: these are the elements that allow you to measure data relating to a specific process and activity; there are many types based on the size you want to measure (GPS, accelerometer, gyroscope, magnetometer, pressure sensor, temperature sensor, etc.)
3. Networks: they are the element at the base of the interconnection between devices and enable the sharing and exchange of data;
4. Software: they allow data to be processed and Value to be generated so that they are usable and readable by all devices that are part of the ecosystem.

The technologies above are fundamental and essential for the IoT ecosystem to exist and function correctly; the continuous development and improvement allows today to have a stable and sufficiently mature ecosystem, but always in constant evolution. The applicability of the IoT knows no limits and boundaries: we move from the car that exchanges information with road infrastructures to medical devices that provide real-time information on the patient’s health status, to sports monitoring devices that provide data on athlete’s performance up to home appliances that generate data to optimize consumption. 

Below is an overview of the sectors most impacted:

1. Agri-food: monitoring of significant parameters for the quality of agricultural production to track and make the supply chain more efficient, reducing resources and environmental impact;
2. Automotive: a collection of data relating to vehicle dynamics to monitor driving style, reducing the risk of an accident and enabling autonomous driving systems;
3. Insurance: detection and monitoring of significant parameters to provide customized policies to specific customers;
4. Smart Home: solutions for the automated and intelligent management of all devices in the home to reduce energy consumption, improving comfort and safety;
5. Smart City: monitoring of significant parameters in the urban environment to improve the liveability, efficiency and energy sustainability of urban centres;
6. Industrial and production sectors: monitoring data relating to production and management processes to make them more efficient and less expensive.

IoT And Blockchain: The Internet Of Value Was Born

As mentioned, the IoT is also based on integration and interoperability with other technologies; it can be said that this feature turns out to be one of its strengths as it allows the ecosystem to be constantly improved and adaptable to various contexts. Among the possible technologies that can be integrated into the IoT ecosystem, there is undoubtedly the blockchain that allows you to move from the Internet of Things to the Internet of Value through its intrinsic characteristics.

To better explain this concept, reference can be made to the following figure, which retraces the evolutionary steps that make it possible to move from the Internet of Information to the Internet of Value. With the Internet of Information, we mean the network as a source of information. Any device can retrieve information; for example, when you read an article on the internet through a smartphone or PC, we are in the case of the Internet of Information. To be a little more technical, the Internet of Information is defined as a one-way data exchange flow in which a device acquires information and not vice versa.

When the flow of information becomes bidirectional, we talk about the Internet of Things; in this scenario, the devices and receiving news provide others to the network. The device is, therefore, a receiver and a transmitter of information at the same time. An example can be that relating to the use of the navigator in the car: in this case, the smartphone receives information about the map of the route it is travelling on, but at the same time transmits data to the network; this information is made available to other connected users who can benefit from it to follow, for example, an alternative route, optimizing travel times.

The transition from the Internet of Things to the Internet of Value uses blockchain technology; this technology makes it possible to enhance the information exchanged between the various devices on the network, generating transparency and trust among all users. Through its characteristics of immutability and security, the blockchain guarantees traceability and transparency in the management and exchange of information. Blockchain is not a single technology but an architecture that allows an asynchronous network to carry out transactions and keep an immutable and secure register in a shared way. 

Each digital transaction record in the blockchain is inserted in a block. When this is completed, it is synthesized in an alphanumeric string (hash ), creating a unique security code that allows it to be linked to the next block—making it “unchangeable”. The blockchain is a sort of electronic, public and distributed ledger that can be openly shared among the most disparate users and creates an immutable record of their transactions, each marked with a time-stamping and cryptographically linked to the previous one.

Conclusions

The Internet of Things is a constantly changing and evolving technology. Its diffusion is mainly due to the concepts of integrability and interoperability, which are the basis of the so-called “IoT ecosystem”; this interoperability makes the IoT suitable for integration with other technologies.

In this context, blockchain technology goes beyond the Internet of Things concept to introduce that of the Internet of Value, which is based on the enhancement of data and information exchanged in terms of security, traceability, and transparency towards all users who are part of the ecosystem.

Also Read: IOT: BENEFITS AND HARMS OF TECHNOLOGY THAT WILL CHANGE OUR LIVES