Jul 1, 2021 4 min read

How to triple charge your blockchain project

The case to combine technologies

“More than 90 percent of blockchain projects are weaving in other emerging technologies, especially the IoT and machine learning,” the HFS research report tells us. We are beginning to see some attempts to harness the potential of other emerging technologies like IoT (internet of Things) and AI (artificial intelligence) together with blockchain. A combinatorial approach to these technologies ends up generating a whole that’s greater than the sum of its parts.

The growing IoT snowball

Internet of Things (IoT) refers to the multitude of physical devices—“things”— that connect to the internet. It refers to the network of physical devices, home appliances, and other items embedded with electronics, software, sensors, and connectivity which enables these things to collect and exchange data. All these smart devices—smart lightbulbs, connected thermostats, fitness trackers, sensors, etc.— are meant to collect data about their environment and communicate with the network without the need for any human intervention. IoT devices are rapidly proliferating our environment. Gartner, Inc., forecasts that the enterprise and automotive internet of things market will grow to 5.8 billion endpoints in 2020, a 21 percent increase from 2019. By the end of 2019, 4.8 billion endpoints are expected to be in use, up 21.5 percent from 2018.

IoT problems and blockchain to the rescue

Since these IoT devices’ job is to collect data and feed it to the network for other devices and systems, an immense amount of data is going to be collected. One of the primary concerns with IoT devices is their susceptibility to security vulnerabilities. The connected devices are not as secure as we would like them to be and hackers have a lot more points of entry than before.

This lack of security is concerning with the widespread use of IoT devices in smart homes and smart cars. The blockchain technology, however, offers the opportunity for security. Blockchain technology as a data-sharing mechanism for IoT devices can provide another level of security with available encryption and the tamper-evident nature of the technology. With its use in conjunction with IoT devices, blockchain can facilitate data distribution in a secure and trustworthy manner.

Another challenge with this expansion in IoT devices is the load that it puts on the infrastructure. The sheer growth in the number of IoT devices anticipated to be in operation will generate large quantities of machine data that will be uploaded and need to be processed. That will heavily stress the current cloud infrastructure. Instead, it would help to build infrastructure at the edge to handle all these devices sharing data among themselves without needing to go back to the cloud. This edge infrastructure would help reduce latency and power the machine economy.

Bringing AI into the picture

Applications of AI are also getting ubiquitous. As you look to purchase something on Amazon, you’ll find them acutely predicting what related things you might be interested in buying. It then nudges you to look at a few more suggestions. That’s AI behind the scenes. When Alexa offers to recognize you by your voice, that is AI in action. When Facebook automatically suggests names to be tagged in a photo, AI is at work.

IoT collects all the data, and AI consumes it to get insights and make intelligent decisions about how to act upon that data. Today, much of AI is like a black box. With a blockchain backbone, AI will be getting clean data that has not been tampered with. Inherent attributes of blockchain can help AI produce a report card showing how data was used. An audit trail can be created from the time data is ingested to train the AI models. It can also include the provenance of data on how AI came with the predictions. This increased visibility will help users get assurances that AI is operating within design parameters and increase trust in the AI models.

The power of convergence

“Data is just like crude. It’s valuable, but if unrefined, it cannot really be used. It has to be changed into gas, plastic, chemicals, etc. to create a valuable entity that drives profitable activity; so must data be broken down, analyzed for it to have value.” Taking that line of thought one step further—if data is the new oil, then that data on a blockchain is cleaner oil and will require less processing. That makes the overall system more efficient.

Integrated solutions with a convergence approach using blockchain technology in conjunction with other emerging technologies like the Internet of Things (IoT) and artificial intelligence (AI) has the potential to open new doors for value creation. Some attempts are being made toward the convergence of these emerging technologies and the emergence of machine economy. In coming articles we'll look at some examples of such companies.

In the end think of the interplay amongst IoT, Blockchain & AI like this: Data collected by IoT, Information secured and made available by Blockchain and Insights provided by AI.

When these three technologies are combined, they can have a far greater impact than if they were used separately. The collected data will provide cleaner and more reliable insights. Since people tend to look at one technology in isolation, this idea is surprising. To see the bigger picture, it takes long-term thinking. With short-term pressures on today's executives, that is difficult. But, by understanding this idea, strategic leaders can take a broader view of blockchain technology. Although most people don't see the importance of it, incorporating this into your technology strategy now could result in massive gains. Taking a combinatorial approach now might not seem urgent. In the long run, however, it will be beneficial because it will allow for a more productive emerging technology program

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