With spending on capital markets applications of blockchain expected to reach $400 million by 2019, growing at a 52 percent compound annual growth rate, it’s clear that momentum is surging. Blockchain growth is further fueled by the Internet of Things (IoT), as one in five IoT deployments are expected to utilise basic blockchain services by 2020. The implications of this are enormous; using blockchain for IoT transactions and data sharing can ease security concerns, remove single points of failure, streamline processes and cut costs.
As an example, co-working spaces and apartments could control the ability to access the rental, and autonomous vehicles could automatically pay for petrol and parking. But the use cases don’t stop there. When supported by service assurance, IoT and blockchain can unleash mind-blowing innovations in every industry it touches. As world-leading businesses such as Microsoft, IBM and General Electric rush to implement blockchain, enterprises should look to embrace the technology, or risk being left behind.
So what exactly is blockchain? As Kamaljit Behera, Industry Analyst at Frost & Sullivan, states, it is “a new data structure that creates trusted, distributed digital ledgers for assets and other data. It is an immutable record of digital events shared peer-to-peer between different parties. It can only be updated by consensus of a majority of the participants in the system and once entered, information is very hard to erase.” Because of this, blockchain creates a high degree of trust. Additionally, you can only add transactions, not remove or alter them, making blockchain attractive to organisations subject to Sarbanes-Oxley, HIPAA and other regulatory frameworks.
On an IoT network, blockchain can facilitate not only financial transactions but also secure messaging between devices. By operating according to embedded smart contracts, two parties can share data without compromising the privacy of its owner. Although blockchain doesn’t solve every security problem for IoT devices, such as the hijacking of IoT devices for use in DDoS botnets, it helps protect data from malicious actors. At its core, blockchain enables an additional layer of security and trust to be added to existing applications, as well as newer ones. This approach provides the potential of a shared platform, while ensuring control, authenticity and integrity, which in turn can power new and innovative business models.
The beauty of distributed blockchain transactions lies in its simplicity. Supported by growth in edge computing devices and 5G networks, this simplicity will enable faster, more efficient communications between autonomous devices – without passing them through single points of failure. Blockchain can also maintain faithful records of IoT device functions, making it possible for devices to communicate autonomously without a centralised authority.
The importance of service assurance
However, for blockchain’s potential to be realised, service assurance is paramount. Like any digital transformation technology, blockchain and IoT will add complexity to the IT infrastructure. This can include edge devices (or sensors) and servers participating in blockchain transactions, middleware for encryption and authentication, and virtual machines for distributed databases and applications. Although autonomous device communications and accelerated transactions can boost efficiency, and improved availability and added security can cut costs, service assurance is now more necessary than ever before. In an IoT/blockchain environment, service delivery can be impacted by load, latency and errors, and because blockchain is basically a highly distributed database, assuring service delivery is more difficult. It requires pervasive visibility across data centers, multi-cloud or hybrid clouds, and edge infrastructures. Illuminating the service delivery path that includes load balancers, gateways, service enablers (including DNS), network, servers and databases – distributed or not – and all their interdependencies, can be achieved using software-centric monitoring of traffic-flows to deliver smart data. By getting insights into service, application, and infrastructure performance using smart data that is well-structured, contextual, and available in real-time, then it is possible to control business outcomes from IoT/blockchain.
While DNS is just one example, the coming growth in IoT devices in combination with blockchain will mean a surge of DNS requests and DNS- dependent services, which can have a major impact on service delivery and performance. The ultra-low latency of DNS services should be of concern for business continuity and assuring IoT performance quality. If DNS performs badly, then those IoT and blockchain services will suffer. That can mean parts of the connected world that are becoming more and more dependent on automation will come to a standstill. Healthcare, manufacturing, energy distribution, transportation, and financial transactions can get derailed because of DNS problems. However, losing control is avoidable with the right service assurance platform, where IT teams get visibility into DNS issues like errors and busy servers.
As IoT devices drastically multiply – a projected 24 billion connected devices by 2020 –and almost all enterprises that invested in trials of blockchain repeating their investments, it’s clear that we are on the cusp of the IoT and blockchain revolution. It is therefore vital that IT professionals prepare themselves by architecting solutions that include service assurance to not only reduce business risk but also guarantee performance, availability and reliability in the production environment. Through this approach, they will be able to truly unleash the power of blockchain and the IoT.