The Internet of Things, IoT, is a way for physical objects, devices and systems to interact with each other and the surrounding world by using different communication technologies and connection standards.
The scope of IoT technology application is very wide. It can be divided into two groups: CIoT (Consumer Internet of Things) and IIoT (Industrial Internet of Things).
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CIoT is oriented to the end user for products such as smart domestic appliances, wearable electronic devices, i.e. fitness trackers, smart watches, and for other smart gadgets.
IIoT projects are implemented in different sectors such as industry and agriculture. They may have a corporate consumer or the whole society may be the consumer. For example, a smart city, smart electrical supply networks, manufacturing automation and robotization.
The volume of the global market of security products for IoT will increase to 50 billion USD by 2027. According to the Future Market Insights (FMI) report, in 2017 the volume was 12 billion USD. From analysts’ projections, the annual average growth rate of the market from 2017 to 2027 will be 14.9%. The growth will be driven by strong demand for IoT security solutions, the increase in solution providers and the emergence of new niche players in the market.
The development of IoT means not only the growth of ‘connected’ devices but also the creation of a technological ecosystem for collection, transfer and aggregation of data, as well as a platform to process and use the data and implement ‘smart’ solutions. Blockchain technologies applied in the sphere of IoT could provide these ‘smart’ solutions
The development of the industry is limited by a number of issues. As soon as these are solved, the degree of IoT penetration in manufacturing processes and everyday life will increase several fold.
Safety will be the key aspect of IoT. In 2018, companies will finally take IoT security seriously, and they will invest in training employees and creating special groups for IoT safety maintenance before implementing projects.
In October of 2017, Gemalto released data that 90% of consumers do not trust the safety of IoT devices. Correspondingly more than two-thirds of consumers and almost 80% of companies support governments that take measures on IoT safety maintenance.
Blockchain will serve as a public register for a huge number of devices that will no longer need to use a central node as a mediator. The devices will be able to interact with each other and update the software offline, eliminate bugs and control energy consumption without a central control system to identify each other.
As more and more IoT devices become involved in key business processes, so the protocoled results of their interactions becomes more important.
It is obvious that with the growing number of devices, the servers they use for exchanging critical data become chokepoints for both effectiveness and reliability.
In the estimation of Forrester, the degree of implemented blockchain-based IoT platforms will reach 5% in 2018.
Blockchain allows the devices to quickly and safely save all the exchange protocols and their work results in a highly decentralized environment. However, this data is available for both people and other devices at any moment (in accordance with specified access rights).
In September, 2017, Hewlett Packard Enterprise (HPE) IT Corporation published the results of research on the Internet of Things (IoT). They interrogated 3100 head managers and IT specialists in 20 countries for the report.
According to HPE, about 57% of companies have already implemented IoT technologies and this share may grow to 85% by 2019. 88% of those who already use IoT noted such projects have a short investment payback period.
Even today, the application of IoT in business returns a good profit thanks to automation of routines.
All participants of a logistics chain can have an immediate access to real information on cargo status thanks to the blockchain technology: not only the date and time of shipment but also exact geolocation, temperature control and many other things.
Most processes can be automated by using smart contracts and the blockchain system data. For example:
A built-in sensor can give an indelible story of component parts, from manufacturing and assembling to disposal through the delivery chain, including all the critical events that affect its quality and service life.
The use of Blockchain together with IoT will create an uninterrupted story for all component parts.
A shared account of IoT and Blockchain stores records of usage, technical maintenance, warranty work and spare parts. In case of a problem, a blockchain can determine the specific parts affected without requiring a wholesale recall.
Most existing suppliers are focused on IoT solutions for industrial production (32%), smart cities (21%) and smart homes (21%).
According to the IDC report, spending on blockchain technologies will have reached 1.8 billion USD in the Western Europe by 2021. In 2017, 200 million USD was spent on the blockchain in Western Europe. The compound annual growth rate (CAGR) of blockchain spending will be 66.6% between 2016 and 2021.
«Smart city» technologies are implemented with government support in the EU, South Korea, China and India. These technologies make energy consumption control and traffic flows more effective.
The American company, GE Aviation, produces aircraft engines with sensors that can get operational data remotely and then determine the optimal algorithms for airplane maintenance, decreasing technical maintenance spend by a factor of 7.