DATAx insights: How blockchain will transform the IoT

Tech analyst Gary Eastwood outlines what IOTA is, its role in industry and how blockchain and the IoT are evolving into a very different beast than the one we know


The idea behind the Internet of Things (IoT) was to allow conventional devices to become 'smart' devices, able to respond to and transmit information about their state. The IoT is one of the most easily adaptable and useful disruptive technologies available to date. Science Direct notes that while cloud computing and big data have gotten to work alongside IoT, blockchain hasn't featured on its partnership list to date. That is, up until now. Two industrial giants in Germany, Bosch and Volkswagen, have adopted the combination of IoT with a blockchain system termed IOTA. This could be a revolutionary new way of seeing data distribution and sales of data through the use of managed blockchains.

Bosch's IoT data collection paradigm

CoinTelegraph reports that Bosch aims to integrate its data collection from IoT devices with the IOTA network. In order for us to understand how this functions, we must first look into how IOTA itself works. Unlike regular blockchains where there are miners working to provide a 'currency', IOTA offers something significantly different. IOTA is actually a set of active data streams that someone can pay to subscribe to, in which case the data is delivered directly through a secure, encrypted channel from provider to receiver. What Bosch has done is develop a development kit termed Bosch XDK (a cross domain development kit) that is intended to be used with IoT devices, the data from which will be provided by Bosch on the IOTA marketplace.

Understanding IOTA and its role in industry

As mentioned before, IOTA is quite different from other blockchain technologies. Whilst other blockchains rely on the formation of blocks in order to store data, IOTA completely does away with this paradigm and opts instead for something called a directed acyclic graph (DAG). IOTA's DAG is termed Tangle and according to Satoshi Watch isn't even a blockchain. Notably, DAG solves two of the major problems that blockchains are inherently plagued with – that of scalability and the cost of transactions. Bosch's provision of the Bosch XDK offers a solution to link the tangle with Bosch's IoT devices with the aim of providing data streams on the Tangle that third-party manufacturers, as well as other interested parties, could subscribe to using IOTA to handle the logistics of the transaction. However, Bosch is not the only industrial giant that sees promise in IOTA.

Volkswagen and their over-the-air update

Iota News reports that in CeBIT 2018, Volkswagen showcased a proof of concept for a system designed to leverage IOTA's Tangle alongside IoT devices in order to update the company "over-the-air" allowing for an audit trail to be established as well as record statistical data in a safe, secure manner. The aim is to provide autonomous transport that relies on IOTA to subscribe to the company's stream of data to the vehicles on the field. According to Volkswagen's press release, industry experts suggest that as many as 250 million cars will be connected by 2020 on the world's roads. Volkswagen is taking the idea of smart devices and ramping it up a notch, innovating well beyond what the current IoT system is expected to do, but with a robust DAG supporting the distribution of this data in the Tangle, it's very likely that Volkswagen will see a massive return for being an early adopter of this kind of tech.

The next step in blockchain evolution

As we've noted before, many sources don't consider the Tangle a blockchain and in all sense of being a blockchain, it isn't. It is something even more sophisticated than a blockchain. In recent years since the massive drop-off in the value of Bitcoin, many speculators are wary of blockchain's promises. Not many of them have realized over the course of these years, but realists and experts in the technology seem hopeful. However, in its current state, blockchain has a long way to go before it can be accepted as the kind of technology that is suited for high-intensity industrial and commercial applications.

IOTA's Tangle, while not being a blockchain, show what an evolved blockchain should look like. With the support of these industrial giants, it's likely that this evolved blockchain will be powering the next wave of autonomous vehicles on the road.

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