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IoT is still centralized and vulnerable, what’s the solution?

By 12/04/2018 No Comments

In 2018, the Internet of Things market has seen the total number of IoT devices that are in use rise to seven billion. According to iot-analytics, this figure is expected to increase threefold by 2025. Despite such indicators, the Internet of Things still has to solve problems regarding centralized platforms’ vulnerability.

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IoT platform as a bottleneck

The complexity of cyber-physical systems is rising. Autonomous machines are becoming able to make their own decisions based on a set of accumulated data about a company or customer. Therefore, there is an emerging issue with how to ensure data integrity. The data subject’s location, financial data, and information relating to personal life may end up in the hands of people or companies acting in bad faith. Linking data and accounts to one’s smartphone also carries a threat. Access to IoT – be it to the washing machine or the garage lock – is usually tied to one handy device which can be stolen or lost.

Examples of Major Challenges

As the Internet of Things collects huge amounts of data, storing this data in a centralized way in itself remains one of the major challenges. As an example of the consequences of storing customer data’ insecurely, iot-analytics provides a case with a UK based telecom and internet provider that was subjected to several cybersecurity breaches where customers’ data was exposed. Hackers were able to easily access and steal millions of customers’ credit card and bank details during a sustained cyber attack.

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In September of this year, a big leak by a Brazilian online booking system exposed personal data of almost 500,000 people. A month later, what appeared to be a collection of personal records compiled by the Federation of Industries of the State of Sao Paulo, the largest class entity in the Brazilian industry representing around 130 thousand industries in various sectors was exposed. The records reportedly contained the personal details of Brazilian citizens such as: names, personal ID numbers, full addresses, emails and phone numbers.

We have to keep in mind that IoT is still centralized. It has been reported that millions of sleep apnea patients rely on breathing machines to get a good night’s rest and the provision of such machines has become common practice in the insurance industry. One of the patients discovered that the device helping him breathe at night was also spying on him. As it turned out, the machines were tracking when the patients were using them and sending the information not just to their doctors, but to the health insurer too.

So what gives?

What facilitates vulnerable data accumulation that can easily fall into wrong hands?

Imagine a coffee machine, a fridge and a toaster all controlled by their owner via an app. The current state of things allows these devices to be interconnected. The coffee maker is programmed to get milk from the fridge. Afterward, it sends signals to the toaster which starts heating up five minutes after the coffee machine switches on.

IoT - An Example of How Internet of Things Connect Everyday Appliances

IoT – An Example of How Internet of Things Connect Everyday Appliances

All three devices send data via the internet to the IoT platform. Therefore, the information on completed processes is stored and collected on the cloud in order to be analyzed and processed by a platform. By this setup, the coffee machine does not communicate with the toaster and fridge directly. Successful communication between them relies on the platform which is associated with a single point of risk where a third party stores data and takes responsibility for the programming of devices’ behavior.

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How about looking at it from an enterprise’s perspective? The above-mentioned algorithm works the same way. Robot-controller, robot-manufacturer and logistics manager interact with each other by sending signals to the IoT platform. So the whole process is in danger of failure.

Decentralized Marketplace to the Rescue? 

The bottleneck problem – namely an IoT platform – can be eliminated by the creation of a global decentralized marketplace for robot liabilities, where devices communicate with each other directly. Airalab, a team of Russian engineers, came up with an infrastructure for cyber-physical systems’ collaboration. Their Robonomics Network platform allows designers of smart cities to build a marketplace without a centralized party.  

The communication between humans and machines fits into transactions. The liability contracts which execute the relationships between users and devices are available to be purchased in a decentralized market. Connecting robots to this decentralized marketplace enables the direct sale of data from robot sensors to interested parties as well as the performance of logistics services without human participation.

If we return to the kitchen setup example, the process between the devices looks as follows. The coffee machine which is programmed to make a cappuccino for its owner at 7 a.m., sends a request to the fridge for milk. If the fridge identifies that there is no milk on its shelves, it calls for milk delivery after comparing several merchants and paying for the service. The toaster heats up having received the signal sent from the coffee machine, but in this case, the appliances receive signals directly from one another, without any IoT platform.

The objects are able to interact directly with each other and the outside world. They can also create and exchange values. All the data is collected and can be traded in a decentralized marketplace, instead of being owned and used solely by the IoT platform.

The machines engaged in the process not only communicate with one another but become autonomous economic agents. This means they have the capability to adapt to ever-changing consumer needs. In other words, robots become independent economic units capable of adjusting processes based on the recent data changes.

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You can zoom out this algorithm to the level of smart factories and smart cities run by decentralized robots. Applying this at scale in production, logistics and urban life may well allow developers and designers of new industrial zones. This could foster trust between people and the IoT world.

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Remember that as the 4th point of the IDDA technique, you must calculate your risk tolerance before deciding on the investment strategy that is suitable for your portfolio.

Don’t forget to complete your risk management due-diligence before developing your investment strategy.

Invest responsibly,

Kiana

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