Lucas Mearian | Computerworld
While blockchain technology tends to get the most attention for its role in underpinning cryptocurrencies such as Bitcoin and Ether, vertical industries are quickly adopting it for its efficiency and transparency.
The electronic, distributed ledger technology has the potential to eliminate huge amounts of record-keeping and disrupt IT in ways not seen since the internet arrived, according to some experts.
Banking and financial services were the first to embrace blockchain ledgers as their core business functions are ideally suited to its distributed nature, transparency and immutability as a system of record.
In addition to efficiencies, banking and financial services rely on established trust between transaction participants, a time-consuming and high-friction process due to regulatory constraints, compliance and fraud risks and the sheer number of intermediaries involved.
“Consequently, for these processes, significant business benefits can be achieved with relatively simple, non-disruptive blockchain implementations,” Everest Group Research wrote in a recent report: “Unblocking Blockchain Adoption – a Prioritization Framework for Business Processes.”
Along with financial services, blockchain has made inroads as a transparent ledger for international shipping and as a method for tracking supply chains. And it is seen by some as the foundation for a new trust economy, where enterprises increasingly turn to blockchain to establish the identities of those with whom they do business.
“One could envision a future in which the impact of blockchain could rival that of the internet or the mobile revolution,” Everest Group Research wrote in its report.
Widespread adoption and integration of blockchain technology in the enterprise isn’t just on the horizon – it’s possible now, offers big benefits to business, according to consultancy Deloitte LLP, and is rapidly moving into mission-critical scenarios.
“You can go industry by industry and you’re seeing concepts proven, pilots now moving into production,” said Deloitte CTO Bill Briggs. “Things like supply chain validation, food safety verification, consumer products companies and potentially industrial and even life sciences companies are starting to circle it.
“The government and public sector within the U.S. and, perhaps even more internationally, are trying to rethink everything from electronic voting and absentee ballots using blockchain to track the movement of the ballots – even if the vote itself isn’t on a blockchain,” Briggs said.
Here are three places where blockchain is already being rolled out or tested.
2. Blockchain delivers decentralized security for industrial IoT systems
Global wireless network technology provider ABB Wireless adopted blockchain as a method for delivering decentralized security services for industrial systems in industries such as utilities, oil and gas, and transportation.
Cybersecurity for IoT is becoming more relevant as industries transition into the age of “smart” systems, which use tiny electronic devices to communicate with, and control, everything from building HVACs to international cargo shipments.
ABB Wireless is using a blockchain platform developed by Xage, a startup that officially launched earlier this month.
ABB Wireless used Xage’s security application running on edge gateways within a number of components at power utility substations. The mesh network enables secure, remote access to IoT devices to control substations, allowing for everything from viewing maintenance data to rerouting power.
The blockchain app contains an encrypted and immutable table of security credentials, which allows field workers to log into a device – even if the substation is disconnected from a utilities’ central data center due to an accident, such as a wildfire.
“Everyone’s scared to death that someone is going to get control of the grid,” said Paul Gordon, vice president of engineering and operations at ABB Wireless. “This provides a solution in a scalable way, so security doesn’t become a huge burden. It allows for a more scalable solution while meeting needs of highly secured environment.”
Combining the immutability of a blockchain distributed ledger with encryption means that the more end nodes that are added, the more secure the network becomes, unlike traditional relational database systems that have a single point of access. Blockchain on IoT devices are more secure because a cyberattacker would need to break into a majority of the nodes to gain controllable access to a system.
On a system with thousands or tens of thousnds of IoT nodes, the possibility of hacking the network is remote at best.
“If you add a million more smart meters to a wireless network, you’ve just made that network harder to hack. Whereas in a traditional network, the more units you add, the more exposure there is to hacking,” said Xage CEO Duncan Greatwood.
What Xage is delivering, according to Roman Arutyunov, co-founder and vice president of products, is the ability for smart meters to talk to each other securely. That allows a utility to detect an outage in a neighborhood and communicate with a local substation to reroute power or deliver more power if there’s a surge in usage, Arutyunov said.
“This is about highly distributed, any-to-any communications between meters and substations…. You can fix a problem even before its perceptible to customers. And, the only way you can allow that to happen at all is if you’ve built a very strong security,” Artyunov said.
Greatwood said Xage’s blockchain platform can be used for securing any type of smart technology, from smart buildings to robotics to traffic systems that are increasingly able to communicate with semi- or fully-autonomous vehicles.
Xage is currently working with one of the nation’s largest building management companies, which Greatwood declined to name, to roll out the blockchain security tech to hundreds of thousands of IoT controllers on fire and safety, HVAC and elevator systems. ABB Wireless’ network has been tested with California utilities, which are currently concerned with losing connectivity due to the rampaging wildfires.
“Many utilities are very conscious of these issues and how this technology can help them,” Gordon added.
While still in the trial stage – ABB Wireless has only deployed a few dozen blockchain-enabled wireless communication gateways for utilities – the company expects over the next three years to deploy the devices to tens of thousands of IoT nodes for utility customers as well as for use on gas and oil heads, which must be monitored, controlled and secured remotely.
ABB, Gordon said, also performed independent testing of the blockchain-enabled IoT network, and worked with Xage and utility customers to validate the security. In addition, the company overspec’d the nodes with processors that exceed 1GHz with several gigabytes of data storage capacity to future-proof them as the network inevitably grows.
“We’re very excited about our whole distributed network,” Gordon said.