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Blockchain + IoT

Can blockchain secure the internet of things?

Chain of Things 2016 | www.chainofthings.com


Chain of Things
Chain of Things (#CoT) is a consortium that is exploring the intersection of blockchain and
IoT with specific focus on security through the development of practical applications and case
studies. CoT seeks to protect and open IoT security related intellectual property for the benefit
of all partners and to accelerate the development of the industry.

We are technologists with a varied background ranging from hardware manufacturing to


macroeconomics to law & governance to distributed technologies.

Chain of Things 2016 | www.chainofthings.com


The Internet of Things

We are very excited about the potential of industrial IoT/M2M!!!!!!!!

Chain of Things 2016 | www.chainofthings.com


Why?

The economic upside is pretty good...

Chain of Things 2016 | www.chainofthings.com


IoT : Up to 11% of Global GDP by 2025

VERTICALS VALUE

Office $70B-150B

Worksite $160B-930B
$11.1T
Human $170B-1.6T

Home $200B-350B

Vehical $210B-740B

Retail $410B-1.2T $3.9T


Outside $560B-850B

City $930B-1.7T

Factory $1.2T-3.7T
Low High Low Estimate High Estimate

Potential global economic impact of IoTincluding consumer surplusof as much as $11.1


trillion per year in 2025 for IoT applications in nine verticals. Based on a review of +300 IoT
applications and a World Bank projection of $99.5 trillion per year in global GDP in 2025.

McKinsey Global Institute

Chain of Things 2016 | www.chainofthings.com


Hows that?

Visibility
Intelligence
Automation
Efficiency

From pollution to natural resource consumption to energy and water distribution to


manufacturing and logistics processes, sensors that compose the Internet of Things provide
transparency into complex opaque systems. This enables the observation and removal of
inefficiencies.

Chain of Things 2016 | www.chainofthings.com


But:

2 problems...

Chain of Things 2016 | www.chainofthings.com


Problem 1.
$11.1 TRILLION

$3.9 TRILLION

40%
Dependent on interopperability

Low Estimate High Estimate

Interoperability required
Interoperability can be achieved by implementing systems or platforms that enable different
IoT systems to trust & communicate with one another. Adopting open standards is one way
to accomplish interoperability.

McKinsey

Chain of Things 2016 | www.chainofthings.com


Problem 2.

Explosion of mystery devices


IoT suffers from potential systemic failures as it scales with disastrous consequences.
Without an open protocol standard for trusted IoT interaction, fundamental security risks will
become exponentially worse as 50-200 billion cheap and junky random connected devices
come online by 2020.

Cisco & Intel

Chain of Things 2016 | www.chainofthings.com


So why blockchain?

Chain of Things 2016 | www.chainofthings.com


Bitcoin

$10,000,000,000

Bitcoin is money on the internet and not a single hack (powered by blockchain technology).

Chain of Things 2016 | www.chainofthings.com


What is blockchain?

Centralized De-Centralized Distributed

Blockchain technology is a distributed database structure that is deemed a revolutionary


approach to data storage with a secure write-forward authentication system for
adding/changing data.

We use blockchain technology to record the identities and the status of devices and to record
and transact the data collected by these devices.

Chain of Things 2016 | www.chainofthings.com


What is blockchain?

Centralized De-Centralized Distributed


(Cloud Network) (Fog Network)

In basic terms, technological trends have evolved traditional cloud servers into distributed
blockchain fog networks, or low latency, location aware, micro servers with no central point of
failure that live on the edge of the network. It is simply a different database structure.

Chain of Things 2016 | www.chainofthings.com


What is blockchain?

1011100101000100010
1010111101001011100
1010110100101010110
1001000000111110100

1011100101000100010
1010111101001011100
1010110100101010110
1001000000111110100

1011100101000100010
1010111101001011100
1010110100101010110 1011100101000100010
1001000000111110100 1010111101001011100
1010110100101010110
1001000000111110100
1011100101000100010
1010111101001011100
1010110100101010110

Sensor Data 1001000000111110100


1011100101000100010
1010111101001011100
1010110100101010110
1001000000111110100

1011100101000100010
1011100101000100010 1010111101001011100
1010111101001011100 1010110100101010110
1010110100101010110 1001000000111110100
1001000000111110100

1011100101000100010
1011100101000100010 1010111101001011100
1010111101001011100 1010110100101010110
1010110100101010110 1001000000111110100
1001000000111110100
1011100101000100010
1010111101001011100
1010110100101010110
1001000000111110100

Encryped & synced across all nodes

This essentially ammounts to a cryptographically secure, write forward, shared Google Spreadsheet of transactions.

Chain of Things 2016 | www.chainofthings.com


Coordination machine for IoT
Sensor owners can decide Advantages from this type
who has access to their of data structure are
Similar sensors from encrypted data. broad.
around the world report in
a common language.
1011100101000100010 Interoperability
1010111101001011100
1010110100101010110
1001000000111110100
1011100101011010010
0000011101001011100
1010110100100000011
Predictability
1011100101000100010
1010111101001011100
1010110100101010110 1111010010111001010
1001000000111110100 1101001001011101011
1001010001000101010
1011100101000100010
1010111101001011100
1111010010111001010
1101001010101101001
Transparency
A sensor reports an event
1011100101000100010
1010111101001011100
1010110100101010110
1001000000111110100
1010110100101010110
1001000000111110100 0000001111101001011
1001010110100100000
and it is registered 0111010010111001010
remotely to a blockchain
node.
1101001000000111111
0100101110010101101 Immutability
0010010111010111001
0100010001010101111
0100101110010101101
0010101011010010000
1011100101000100010 0011111010010111001
0101101001000000111
Coordination
1010111101001011100 0100101110010101101
1010110100101010110 1011100101000100010
1010111101001011100
1001000000111110100 1010110100101010110
1001000000111110100 Resilience
1011100101011010010
0000011101001011100
1010110100100000011
Sensor Data as Cryptographically
Signed Transaction
1111010010111001010
1101001001011101011 Compliance
1001010001000101010
1111010010111001010
1101001010101101001
Distributed Globl 0000001111101001011

Node Network
1001010110100100000
0111010010111001010
Actuation
1101001000000111111
0100101110010101101
Node 0010010111010111001
(Fog)
0100010001010101111
0100101110010101101 Security
0010101011010010000
0011111010010111001
0101101001000000111
0100101110010101101
Trust
Ledger

Chain of Things 2016 | www.chainofthings.com


Chain of Things 2016 | www.chainofthings.com
Approved 3rd party
Triggered Action
Subject of Action

Permissioned View of Event


Sensor
Coordination machine for IoT

Event Occurs

1011100101000100010
1010111101001011100
1010110100101010110
1001000000111110100
1011100101011010010

Immutable history on blockchain Ledger


0000011101001011100
1010110100100000011
1111010010111001010
1101001001011101011
Verfied Event Record
1001010001000101010
1111010010111001010
1101001010101101001

TRUSTED 3RD PARTY


0000001111101001011
1001010110100100000
0111010010111001010
1101001000000111111
0100101110010101101
0010010111010111001
0100010001010101111
0100101110010101101
0010101011010010000
0011111010010111001
0101101001000000111
0100101110010101101
1011100101000100010
1010111101001011100
1010110100101010110
1001000000111110100
1011100101011010010
0000011101001011100
1010110100100000011
1111010010111001010
1101001001011101011
1001010001000101010
1111010010111001010
1101001010101101001
0000001111101001011
1001010110100100000
0111010010111001010
1101001000000111111
0100101110010101101
0010010111010111001
0100010001010101111
0100101110010101101
0010101011010010000
0011111010010111001
0101101001000000111
2 Case Study Examples:

1 current application & 1 future application

Chain of Things 2016 | www.chainofthings.com


Solar | Proof of Generation
First crypto recognized by the IRENA

SolarCoin works like a global air miles reward


program for solar energy generators;
counterintuitively the more people claiming
those airmiles, the more they are worth in $'s.

The ElectriCChain is a global platform to


accelerate the growth of solar energy, IoT and
blockchain data technology projects with
impacts ranging from the heights of
commercial space and meteorology research
to the smallest micro-generation and micro
finance projects in Africa.

Chain of Things 2016 | www.chainofthings.com


Solar | Global Solar Power Record

85,000MWh of solar power


generation recorded to date

1011100101000100010
1010111101001011100
1010110100101010110
1001000000111110100
1011100101011010010
1011100101000100010 0000011101001011100
1010111101001011100
1010110100101010110 1010110100100000011
1001000000111110100
1111010010111001010
1101001001011101011
1001010001000101010
1011100101000100010 1011100101000100010
1111010010111001010
1010111101001011100
1010110100101010110
1010111101001011100
1010110100101010110
1101001010101101001
1001000000111110100 1001000000111110100 0000001111101001011
1001010110100100000
0111010010111001010
1101001000000111111
0100101110010101101
0010010111010111001
Secure GSM Transmission 0100010001010101111 Proof of generation allows for
0100101110010101101 leveraged models:
0010101011010010000
1011100101000100010 0011111010010111001
0101101001000000111
1010111101001011100 0100101110010101101 Verified Carbon Credits
1010110100101010110 1011100101000100010
1010111101001011100
1001000000111110100 1010110100101010110
1001000000111110100
Energy Trading
1011100101011010010 UN COP21 Emissions Verification
Solar Power 0000011101001011100
Solar Panel 1010110100100000011
Generation Data 1111010010111001010 Regulatory Compliance
1101001001011101011
1001010001000101010 Secure Financing
1111010010111001010
1011100101000100010 1101001010101101001
Global SolarCoin
1010111101001011100
1010110100101010110
1001000000111110100
0000001111101001011 Scientific Research
1001010110100100000
Distributed Node Blockchain 0111010010111001010
1101001000000111111
Impact Investing Accountability
Network 0100101110010101101
0010010111010111001
0100010001010101111
0100101110010101101
0010101011010010000
0011111010010111001
0101101001000000111
0100101110010101101

Immutable Record
of ALL Solar
Power Generation

Chain of Things 2016 | www.chainofthings.com


Increased IGO Support (and a better planet!)

Chain of Things 2016 | www.chainofthings.com


UN COP21 Emissions Verification

Impact Investing Accountability


Verified Carbon Credits
Regulatory Compliance

Scientific Research
Secure Financing

Energy Trading
Country

Permissioned View of Generation


Logger
Verified Solar Power Generation

1011100101000100010
1010111101001011100
1010110100101010110
1001000000111110100

Immutable history on blockchain Ledger


1011100101011010010
0000011101001011100
1010110100100000011
1111010010111001010
1101001001011101011
Solar | Process

Verfied Solar Power Generation Record


1001010001000101010
1111010010111001010
1101001010101101001

TRUSTED 3RD PARTY


0000001111101001011
1001010110100100000
0111010010111001010
1101001000000111111
0100101110010101101
0010010111010111001
0100010001010101111
0100101110010101101
0010101011010010000
0011111010010111001
0101101001000000111
0100101110010101101
1011100101000100010
1010111101001011100
1010110100101010110
1001000000111110100
1011100101011010010
0000011101001011100
1010110100100000011
1111010010111001010
1101001001011101011
1001010001000101010
1111010010111001010
1101001010101101001
0000001111101001011
1001010110100100000
0111010010111001010
1101001000000111111
0100101110010101101
0010010111010111001
0100010001010101111
0100101110010101101
0010101011010010000
0011111010010111001
0101101001000000111
Solar | Security Objectives
A. Data origin authenticity
It is essential to secure the authenticity of the datas point of
origin with as much unique detail as possible. This can be 1. INPUT
accomplished by monitoring sensor firmware authenticity and
multi element sensor environmental data to give as much detail
to sensor identity as possible.
2. SOLAR CELLS

B. Securely sending data from logger to ledgers


The depositing of sensor data on a distributed ledger will occur
in a similar fashion to that in which a traditional crypto currency 10 11 10
A. Data origin authenticity 01 01 00 3. DATA LOGGERS
transaction record takes place but with extra focus on data
origin authenticity so that unqualified data does not pollute the
ledger.
B. Securely sending data from logger to ledgers 4. DISTRIBUTED LEDGER
C. Maintaining data securely on ledger
Securing data on a ledger can be accomplished by syncing a I I I I I

record of events across a broad distributed network of


supporting nodes, creating no single point of failure that might
be culpable to a hack. Any retroactive modification of ledger
data is nearly impossible as the attacker would need to hack C. Maintaining data securely on ledger

and modify thousands of different nodes around the world (not


that easy!).
D. Sharing & transacting data securely 5. DEVICE OWNER ACCESS

D. Sharing/transacting data thereafter securely


With the use of private and public keys, sensor owners will be 6. THIRD PARTY ACCESS
able to clearly define permission levels for access to their
sensor data, defining the levels of transparency that can be
accessed by individuals or other devices.

Chain of Things 2016 | www.chainofthings.com


Solar | A. Data Origin Authenticity
X Device (Sensor)

111 DCPD (Device Chain of Proof Data)


101
000 10111 OEM Module Firmware Aggregate Hash

Secure Platform

DCPD 01100011
Distributed Ledger (DL)

Device Identity
01100011 01100011 MCPD 01100011

Corresponding
OEM device module 10111 MCPD (Manufacturers Chain of Proof Data)
firmware data.
101
OEM Module Firmware Aggregate Hash
111
000

X Device (Sensor) OEM Record

Chain of Things 2016 | www.chainofthings.com


Water | Real-time Resource Transparency

The $5 million Global Impact Award is funding the installation of real-time water monitoring
technologies at 4,000 water points across Africa by 2015.

Harnessing the power of technology and real-time data, charity: water will install remote
sensors to monitor and record actual water flow rate, allowing more effective maintenance and
provision of clean water to more than a million people.

Chain of Things 2016 | www.chainofthings.com


Water | Active Monitoring

Nepal

1011100101000100010
1010111101001011100
Well error detected 1010110100101010110
1001000000111110100
1011100101011010010
0000011101001011100
1011100101000100010
1010111101001011100
1010110100100000011
1010110100101010110 1111010010111001010
1001000000111110100 1101001001011101011
1001010001000101010
1111010010111001010
1101001010101101001
0000001111101001011
1001010110100100000
0111010010111001010
1101001000000111111
0100101110010101101
0010010111010111001
0100010001010101111
0100101110010101101
0010101011010010000
1011100101000100010 0011111010010111001
0101101001000000111
1010111101001011100 0100101110010101101 Micro Financing
Ethiopia 1010110100101010110 1011100101000100010
1010111101001011100
1001000000111110100 1010110100101010110
1001000000111110100
Mobile Financing
1011100101011010010 Impact Investing
0000011101001011100
1010110100100000011
1111010010111001010 100% Charity Transparency
1101001001011101011
1001010001000101010
1111010010111001010
1101001010101101001
0000001111101001011
1001010110100100000
0111010010111001010
1101001000000111111
0100101110010101101
0010010111010111001
GSM Well Sensors 0100010001010101111
0100101110010101101
0010101011010010000
0011111010010111001
0101101001000000111
0100101110010101101

Chain of Things 2016 | www.chainofthings.com


100% Charity Transparency

Chain of Things 2016 | www.chainofthings.com


Mobile Financing
Impact Investing
Micro Financing
Increased Donations
Village

Permissioned View of Flow


Flow
Verified Water Flow

1011100101000100010
1010111101001011100
1010110100101010110
1001000000111110100

Immutable history on blockchain Ledger


1011100101011010010
0000011101001011100
1010110100100000011
1111010010111001010
1101001001011101011
Verfied Water Flow Record
1001010001000101010
1111010010111001010
Water | Charity

1101001010101101001

TRUSTED 3RD PARTY


0000001111101001011
1001010110100100000
0111010010111001010
1101001000000111111
0100101110010101101
0010010111010111001
0100010001010101111
0100101110010101101
0010101011010010000
0011111010010111001
0101101001000000111
0100101110010101101
1011100101000100010
1010111101001011100
1010110100101010110
1001000000111110100
1011100101011010010
0000011101001011100
1010110100100000011
1111010010111001010
1101001001011101011
1001010001000101010
1111010010111001010
1101001010101101001
0000001111101001011
1001010110100100000
0111010010111001010
1101001000000111111
0100101110010101101
0010010111010111001
0100010001010101111
0100101110010101101
0010101011010010000
0011111010010111001
0101101001000000111
Challenges

Sensor Reputation
While blockchains distributed database technology may be secure, it is only as good as the
sensor data that is placed on it. If you secure crappy data to the blockchain, it is still crappy
data. Blockchain can help give sensors human-esque identity and legal accountability (as it does
with private keys in the Bitcoin world), but it will require more dedicated hardware development.

Data Volume
The pending wave of IoT data is unprecedented and it is still unclear as to how blockchain
models will adapt to this in the most efficient way. Hybrid models of lite edge fog nodes with
heavier storage backups need to be explored.

Timing
The adoption of industrial IoT is still in its early days and remains a relative mystery to most
people and businesses. Blockchain is even more nascent and mysterious. Combining both IoT
and blockchain effectively is even more essoteric and will take time and market development to
understand the full potential value.

Chain of Things 2016 | www.chainofthings.com


Challenges

VISIBILITY
Peak of Inflated Expectations

Plateau of Productivity

Slope of Enlightenment

Trough of Disillusionment

Technology Trigger TIME

Hype Machine
To a hammer everything looks like a nail...

We are aware of the over hyped expectations of blockchain and are seeking to confirm or deny
its utility through practical (rational) case studies. Where is blockchain on this curve?

Chain of Things 2016 | www.chainofthings.com


Conclusions

Foundational Device Security & Trust is Paramount


As device volume grows rapidly with few open standards for security, systemic vulnerabilities
will increase exponentially. Consumer hacks of IoT devices are an issue now, but greater
integration of IoT into industrial and public infrastructure will create a new world of threats.

Open Interoperability and Development is Key


A fragmented world of proprietary IoT sandboxes will only delay and weaken the industry. 40% of
economic opportunity is only accessible if objects can cleanly trust each other and work
together. More so, if the protocol (blockchain) is open for all to stress test, there will be a lower
chance of a systemic failure down the road vs closed source code that has not been publically
scrutinized.

Clean Opportunities
New digital markets have a great opportunity to start fresh with new models and skip the
bureaucratic encumbrances of traditional incumbents that control developed economies.

Chain of Things 2016 | www.chainofthings.com


Moving Forward

Open Intellectual Property & Development Partnerships


Chain of Things believes that protecting and opening IP related to the security of IoT is
essential to its growth and stability. We are currently developing a series of patents and invite
partners across various industry verticals to enter the conversation and explore potential
applications of IoT+blockchain.

JACK Module & Next PoCs


We are currently developing an independent tiny connected sensor module that will report its
status directly to the blockchain. This will serve as a development platform to explore new use
cases during our next A<>B Case Study event in Hong Kong in October.

Chain of Things 2016 | www.chainofthings.com


Thanks!
What are your problems and how can we help explore solutions?

@chainofthings | www.chainofthings.com

Chain of Things 2016 | www.chainofthings.com