Tech Tips #14: What might Blockchain bring to IoT connectivity?
15 May 2024

Tech Tips #14: What might Blockchain bring to IoT connectivity?

15 May 2024

Blockchain was (and remains) one of those things that caught headlines and then…faded away somewhat, as the extravagant claims regarding its uptake, utility, and more turned out to be somewhat overhyped.

There were, to say the least, some rather optimistic forecasts. So, is that it for Blockchain? No, quite the contrary. In this Tech Tip, we’ll explore Blockchain and look ahead to see how it might begin to benefit stakeholders in the IoT ecosystem – and, in particular, how new security legislation might bring it right back into focus.

Blockchain was so hyped, it rapidly became one of those things everyone seemed to know about – but which few really understood. We won’t spend time explaining the nitty-gritty here but, suffice to say, it’s all about security.

Essentially, Blockchain takes advantage of a distributed digital ledger to maintain a record of all transactions and events for a particular service or item. This ledger is shared, and all changes must be validated by those with access to it before they can be accepted.

As a result, many sectors – including the telecommunications industry – have begun to consider how Blockchain can be used to enhance security, protect access rights and stored data, among many other examples. So, how might this benefit the booming world of IoT?

IoT and security

Of course, before we get into IoT in general, we have to be clear about a few things. IoT is a broad term – and includes all sorts of consumer devices that connect to the public internet or to other kinds of public networks to exchange data.

There are millions and millions of these – and they include commonplace devices such as smart watches and fitness trackers, home energy management systems, smart meters and more. Naturally, with such widespread (and growing) availability of such devices, concerns have been raised about individual security and privacy. These concerns are legitimate and will likely grow.

Then there’s another category altogether: devices used for medical or industrial purposes. These devices may generate or receive sensitive or private information, or a compromise to such a device might have serious repercussions. Stakeholders who use such devices are typically conscious of security risks and take precautions, by choosing connectivity providers like Telecom26 that can offer enhanced levels of protection and safeguard their traffic.

With traffic volumes from IoT devices set to grow still further, and with yet more devices expected, as well as an evolving security risk landscape, there’s no room for complacency. Network-level security remains paramount, and we must all be attentive to innovations that can help promote customer confidence, even while adopting the current state-of-the-art protection mechanisms. Does Blockchain offer a potential solution and where might it fit into this landscape?

How could Blockchain help?

Unsurprisingly, many in the industry think that Blockchain can offer enhanced security levels for IoT applications. For example, consultancy firm Deloitte[1] thinks it can be useful for several reasons:

  • Secure transaction records
    • The ledger that records all transactions relating to a specific good or service are tamper-proof, with no single party in overall control. All stakeholders participate and can validate the transaction history
  • Data protection
    • Using Blockchain to provide another barrier before data can be accessed gives a new level of encryption and protects valuable (and private data)
  • Visibility
    • All transactions are visible to authorised parties, so any access can also be used to track breaches and leaks – minimising or eliminating their occurrence in the first place

Industry organisation, the IEEE[2], is also strongly in favour of the deployment of Blockchain for IoT applications – so there is growing recognition that it could be a great leap forward for newer IoT applications that demand the utmost security – as the IEEE notes, driverless cars must remain protected, even when connected to the networks on which it depends.

So, with industry heavyweights behind the concept of Blockchain integration for IoT applications and services, where are we? Why hasn’t this become commonplace and de facto in IoT service offers?

Blockchain adoption – what’s holding us back?

There’s a wealth of material regarding ostensibly sound ideas for the adoption of Blockchain in IoT (and elsewhere), but the truth is that much of this remains in the realm of the start-up. The truth is that it has really enter this sector with any degree of scale. The IEEE reckons one reason is the processing power required to mine tokens, suggesting that most IoT devices won’t be capable of such activities.

But then, they probably shouldn’t need to. This argument really relates to the admission of domestic IoT devices to networks in general such as the internet, but perhaps we really should be focusing on admission to a specific network – with authorised devices using dedicated (e)SIMs that are remotely connected to their home networks, which in turn leverage Blockchain to manage network to network connections. Similarly, we need to think about internal processes that can benefit from enhanced security – a very legitimate question is, would Blockchain even be visible at all to external customers?

Perhaps one problem is that there are – perversely – too many ideas without a settled direction of travel. Consultancy firm Arthur D Little[3] posits that “…Telecom carriers can leverage smart contracts (and blockchain) to automate many tasks and thus significantly improve efficiencies in many legacy systems.”

We remain in a state of flux – there is a host of promising ideas, but little yet to suggest that Blockchain will enter the world of connectivity for IoT services and applications in the immediate future and hence not part of customer agreements for the time being. Of course, the hype led to a sense of expectancy and, even disappointment. Yes, Blockchain will be significant, but much work remains to be done before it reaches the market in the way imagined just five years ago.

Arthur D Little, again, notes that, “In the short term, the telecom industry should start deploying private blockchains for internal use cases and then open it to external customers. In the medium-to-long term, telcos can leverage blockchain platforms to enable higher-value use cases, such as identity management, data management, asset management, and revenue assurance, or even overlay network development.”

And these more internal use cases are indeed far more likely in the next few years, as telcos wrestle with the challenge of process automation to meet the demands of legislation such as the EU’s NIS2 directive[4], which seeks to introduce bloc-wide practices for cybersecurity – and is hence an ideal use case for Blockchain adoption, given that process automation is integral to the principles it advances.

Telecom26 – what are we doing?  

The simple answer is that we are focused on ensuring that our network is protected to the latest state-of-the-art. We invest constantly and heavily in ensuring that we can offer our customers the very highest levels of protection. In time, when Blockchain emerges as a viable solution for customer-facing applications (don’t forget, it can’t be adopted alone – other network operators and providers will become participants in any distributed Blockchain-based network admittance procedures), we will review the advantages that new security methods might afford, as well as their drawbacks.

But that is some way away. Blockchain is a great idea and, doubtless, will deliver significant benefits – but the trick here is to identify use cases where it really adds value and isn’t simply a gimmick. Our current view is that early adoption of Blockchain is, like for the wider industry, more likely to be internal rather than externally facing.

Telecom26 has always been about delivering the highest levels of network and device security, using the tools availability and the creativity of our engineers to designing the best processes. Sure, one day Blockchain will deliver – but until then, we should all be focused on the very real advantages of the security solutions we deploy. The real bottom line is, if you are at all concerned about IoT security, then you absolutely must talk to a specialised provider like us.






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