Blockchain and Internet of Things:Why a Perfect Match

Fabio Antonelli - fantonelli@fbk.eu

Head of OpenIoT@ FBK - CREATE-NET Research Center

About me…

Applied Research and Experimentation on

Open Platforms and Enabling Technologies for

the Internet of Things

Fabio AntonelliHead of OpenIoT Research Unit in FBK – CREATE-NET

Trento, Italy

Agenda

• Brief history

• Blockchain: what is and how it works

• Blockchain for IoT

• Main application patterns and cases

• IoT Challenges and Blockchain

• Main Benefits

• A market perspective

• Open challenges

Origins of Blockchain

• 2008, Satoshi Nakamoto

• Core component of the digital currency

• The problem:

– How to perform digital currency transactions between users directly, without an intermediary

• Bank• PayPal• CC Circuit

Blockchain and Disintermediation

• Only 1 person owns some money at a certain moment

• Cash can’t be spent twice

10

Disintermediation:No central authority

or 3rd trusted parties

Blockchain: How it works…

Decentralized network of the ”ledger”(decentralized transactions database)

A B: 10 b

B C: 10 b

…….

…….

……

…….

Structure of the ledger

Transaction logs

Blocks

“Chained”

What is Blockchain

Technological infrastructuresupporting transactional services

bitcoin Asset tracking…. ….Services

Contracts(“rules of the game”)

• Decentralized network of nodes and ledger• Peer to Peer secure communication• Decentralized Consensus mechanism• Trustless playground

Blockchain:From BitCoin & FinTech Applications towards IoT

Devices are entitled to autonomously execute

transactions

“Device Democracy”

Devices become part of the value exchange in the IoT

ecosystem

“Economy of Things”

IoT Device Empowerment: Examples

• Trustfully recognized

• AutonomousBehaviour

• Autonomous Device Interaction

Smart Locks Automatic e-car recharging and payment

IoT Device Empowerment: Examples

The ADEPT Project

by IBM and Samsung

• ”Proof of concept” platform• Decentralized marketplaces open to IoT devices

Immutable Asset tracking and Transactions Recording

• Definition of rules and agreements• Tracking • Verification• Proof of value

• Contracts • Transactions

• Records

At the basis of economic, legal and

political systems:

Many application domains:• Insurance

• Logistics

• Manufacturing (supply chain)

Immutable Asset tracking and Transactions Recording: Examples

• Insurance Contracts: – simplified, automated processes, increased

standardisation and automatic, electronic execution

• Micro-Insurance:– Sharing economy scenarios

• Fraud Detection:– Validate authenticity

– Verifiable and trusted logging of events

– Sensor-based insurance

IoT Challenges and Blockchain

Centralized Control

Need for certification authorities

Communication from edge to cloud

Centralized Data Management & need for trusted

parties

Exposure of data flows in the

network

Plethora of Device Identity solutions

Main Benefits

Simpler, more direct processes

Simpler transactional model Disintermediation

• Costs reduction

• New business models

• Transactions acceleration Wider use of automatic transactions

• Device AutonomyNo need for

“human in the loop”

Blockchain Ecosystem and IoT

The Blockchain market size:

Estimated grow:

• 210.2 M$ (2016) 2,312.5 M$ (2021)

• CAGR of 61.5%

(MarketsAndMarkets, 2017)

Blockchain for IoT:In an exploraroty phase

A Market perspective

Big Players: investing

Startups: limited numbers, but growing

Stage: Innovation/Exploratory

• Power grids• HealthCare• IoT platforms• Shared Economy

Opportunities:

• Insurance• Supply Chain• Industrial IoT

Challenges

• Legal & regulations

• Technology

• Fragmented market

• Lack of skills

• No established standards• transaction processing time• decentralized storage

• Limited blockchain platforms offering

Perspectives

• Blockchain and Intelligent Things named by Gartner as strategic technology trends for 2017

Conclusions…

My Contacts

Fabio Antonellifantonelli@fbk.eu