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By Gil Perez, SVP Digital Assets and IoT, General Manager Connected Vehicles and IoT Security
As the number of inter-connected devices grows, the possibilities for technologies that can process a variety of transactions increases. This is where Blockchain comes in. Originally created as the underlying technology for trading the digital currency Bitcoin, its value extends far beyond cryptocurrency. According to Markets and Markets, the Blockchain market is expected to be worth more than 2.3 million in the US alone by 2021.
Data and files stored in Blockchain can be made up of anything from land titles and loans, to intellectual property, identities and votes – almost anything of value. As a distributed ledger enabling new levels of transparency and collaboration, Blockchain is helping businesses re-imagine the way business interactions take place. In the case of connected devices and digital supply chains, Blockchain can enable new efficiencies and scenarios across all industries and lines of business.
The potential for Blockchain technology and IoT is among the most significant. Soon, any IoT device will be able to register an event that automatically triggers a business process. Blockchain can support the growth and development of IoT, including fraud management, identity management, authentication, authorization, providence, settlements, and audits.
As a distributed ledger enabling new levels of transparency and collaboration, Blockchain is helping businesses re-imagine the way business interactions take place
Supply chain and logistics companies are some of the front runners for Blockchain use cases, demonstrating the benefits of the technology to solve increasingly complex value chains. For example, when ordering new inventory to keep a production line running, Blockchain ensures order validation through a digital signature, as a trusted distributed ledger. It also facilitates the order getting through to the company’s network of suppliers, eliminating the need for repetitious submission of forms and paperwork.
Here are a few additional examples of how Blockchain can improve the world of IoT:
• Increased Trust – With Blockchain, we can reduce risk of transactions by increasing traceability, which in turn builds trust. This is particularly important when it comes to tasks like global supply chain track and trace. This can be offered via a public Blockchain or also via semi-private Blockchain when applicable.
• Eliminating the Middleman – Blockchain is decentralized and distributed. Eliminating the need for the role of the middleman, and making transactions more efficient. Enabling parties to offer new business models as the ‘cost’ of the middleman can be redistributed between the parties or simply eliminated.
• Security and Irrefutable Records – The distributed and encrypted nature of Blockchain means it will be difficult to hack. Furthermore, with Blockchain, records cannot be changed – they are irrefutable. After you create a block – it can never be deleted, you can also add to it a new block. This is especially important for regulatory, reporting, and audit use cases. Providing the highest level of security to IoT data when needed.
• Accelerate Transactions and Reduced Costs – In a business transaction where trust is established through various intermediaries, Blockchain can speed up multi-participant transactions. This also makes transactions more efficient and cost-effective to process. Blockchain also can register machine-to-machine transactions without the typical overhead costs.
To help better leverage the benefits of Blockchain, SAP recently announced a digital innovation initiative that integrates next-generation technologies to help customers redefine their business – including ready-to-use Blockchain technology with SAP Cloud Platform Blockchain service. The solution embeds Blockchain into SAP’s Leonardo portfolio, to combine with other next-generation technologies, such as IoT and machine learning capabilities.
When it comes to Blockchain, the future is incrementally becoming reality. Forward-looking companies are getting ahead of the curve – putting others at risk of being left behind. There are still barriers to adoption like governance, organizational issues, new business models, and even technological topics which are being addressed and resolved by companies across multiple industries. While mainstream adoption might still be a few years away, early adopters are increasing and growing exponentially.Making mainstream adoption of Blockchain reality much sooner than many may people currently project.