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Guides Technology How to Make Blockchain and IOT a Reality in Industry 4.0

How to Make Blockchain and IOT a Reality in Industry 4.0

Published on 08/25/2017 | Technology

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Aidan Coleman

MES Engineer, Enterprise System Partners Limited. MES Engineer at Enterprise System Partners Limited

IoT GUIDE

Blockchain is a trending buzzword flying around office making Jeffery in the cubicle next to you sound like the next Dragons’ Den participant. But what really is the blockchain and how can it work for your business? The truth is the Fintech train has left the station and now industry is pulling in; industry needs to react and here’s how.

What is the Blockchain?

The blockchain is a distributed ledger technology used to transfer digitized information from one peer (group) to another. Simply put it is heavily encrypted piece(s) of information which can be posted to a public or private network of entities to facilitate the transfer of lists of values. These values are then accessible to all approved members of the network at any time and in real time. Don’t bog yourself down in the “but what if” argument; this technology works and will continue to work. Simply put blockchains encryption cannot be broken due to the length of time it takes to break down a block’s encryption; by the time one has been broken ten have been created. So the long and the short of it is that to maliciously attack a network is virtually impossible without obtaining a key to decrypt the information.

What is Fintech?

Fintech or Financial Technologies encompasses all aspects technologies used through-out the financial industry but primarily it refers to its backend systems used by financial institutions. Bitcoin, Ethereum, Litecoin and XRP sit at the forefront of the current blockchain protocols being used by Fintech to harness the blockchain as a method for transferring monetary value.

Who’s Investing?

Accenture invested $12 billion, yes billion, dollars in 2015 and since then the investment in blockchain technologies has grown exponentially, See below;

  • Samsung partnered with Blocko, a blockchain-as-a-Service platform looking to develop device to device payment options.
  • Payment giants Visa in 2016 began testing the blockchain as a method of interbank transfers.
  • MasterCard has been developing blockchain API’s with an inherent focus on facilitating payment via smart contracts.
  • And the list goes on, crucially however this is not just about currency and financial transfers. It’s about the technology and its ability to facilitate transactions securely and with complete accessibility

Blockchain for Business

Depending on your application, the blockchain can be used for virtually any type of digitized transfer of information. This has already manifested itself in industry in terms of smart contract solutions and it is thought that this will become the blockchain’s most significant application. However, the optimisation of these smart contracts, i.e., making them financially viable, requires live data generated from IOT devices, transmitted to the Cloud for analysis followed by storage of aspects of this data on the blockchain. Without this, the real value addition of the blockchain to industry and IOT is non-existent. Let me give an example. Contracts are primarily used to transfer ownership from one individual to another, but crucially contracts have an intricate series of criteria which must be met: temperature, humidity, light sensitivity, delivery timeline and so on. These aspects will play a crucial role not only in correlating data for use in a blockchain application but also are crucial to allow cognitive responsive data analysis platforms which will be essential for IOT automation and ultimately decision-making. See below for a breakdown on how one blockchain solution work in business. (video)

Benefits to Industry

  • Significantly increased productivity.
  • Secure data transfer and complete maintenance of data integrity.
  • Removal of the necessity of trust between parties associated with a transaction.
  • Streamlined processes via the removal of intermediaries and validation activities.
  • Ultimately substantial cost savings and value addition through process improvements
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What you Need

 

Hardware Configuration

Assess the available hardware configurations on the market. At the core of this selection it is essential to focus on device network security to prevent attackers intercepting the network via MITM attacks, amongst others.

Data Analytics Combined with Cognitive Computing

Select one of the available Cloud-based data analytics platforms to pool your data and to configure the platform to analyse the data in the format required. Crucially this data must then be leveraged to utilise systems preforming automated decisions based on the above data.

Blockchain Application

Understandably, the most difficult part of this process is both selecting and configuring the blockchain. Having said that, it takes one developer roughly a day to create the basic chaincode required. Perform an analysis of the blockchain’s intended use placing emphasis on the scale-ability, privacy and functionality of the blockchain.

Having said this, problems can arise when creating and configuring the network. To get the correct network configuration in place is not easy but it has gone from being an unfathomable concept to a viable solution. To ignore it and dismiss the blockchain as an overly technical and expensive solution with no relevance to your business is a missed opportunity to become a market leader in terms of efficiency and competitiveness. Initially this will be a lost opportunity, eventually it will be the inability to compete.

Nowhere is this more relevant than in manufacturing solutions. Logistics, retail and procurement all have made significant strides in terms of process and systems development. However, without adoption from the manufacturing end the real value of IOT and the blockchain cannot be realized.

If your business operates as follows:

  • Based on processes with multiple participants relying on distributed information
  • Providing services to trading parties such as middlemen or intermediaries
  • Augmenting or reselling something originally created somewhere else
  • Substantially relying on ledgers or payments
  • Based on the assumption that others need you because they don’t know or trust their counterpart

To find out how blockchain technologies can enhance your business or business processes the below links are a good starting point;

 

Or alternatively contact me via LinkedIn

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