IoT powered by Blockchain
How Blockchain technologies facilitate the application of digital twins in IoT
Until 2020, the amount of Internet of Things devices (IoT) will grow to over 20 billion. It is estimated that 4.5 billion of these devices will be implemented in Europe, 750 million in Germany. These interconnected devices will support millions of so-called “digital twins” with valuable data streams. Blockchain technology appears today as potentially the most suitable and efficient way to generate, monitor and exchange digital twins. It combines security from hackers through its build-in encryption features, and simultaneously creates transparency of the data history as a Blockchain block is considered immutable.
Thus, contributors are able to trace back past transactions and are secure from hacking attacks. This is achieved through encryption and the absence from a single point of failure due to the distributed nature of the network. Digital twins benefit from these features, as they allow the transmission of data and value of any kind over the internet without intermediaries and a high degree of transparency.
The expected potential of digital twins today is limited only by the extremely fragmented IoT ecosystem and therefore it is essential to build an ecosystem and attract stakeholder who are set to interact with each other on a common platform.
The Blockchain-User Interaction Model introduces the four major stakeholders: Users, Regulatory Authorities, as well as Technology and Infrastructure Companies. Foundation of the model is the mutually used platform, populated by users with digital twins, which are accessed for further processing of information. By adding Blockchain hardware, such as microchips, it can be guaranteed that the digital twins are created in the chip’s secure environment and are stored cryptographically secured.
What are the benefits for investors?
If the ecosystem is established, all ecosystem partners will reap significant advantages from that collaboration:
- Users and companies will enjoy an increased availability of higher quality data
- Technology providers will face an increased demand in soft- and hardware to allow the monitoring of information flows
- Infrastructure providers will have the opportunity to increase bandwidth and furthermore establish new business models
- Regulatory institutions will generate new tax revenue streams through taxable transactions provided by participants
What is one practical example of using such platform? – Energy metering
As the added value of Blockchain platforms increases exponentially with the amount of participants, first-movers will embrace the challenge of stakeholder management. This challenge is the deciding factor in the decision-making process on building such platforms and determines who can fully take advantage of this opportunity. Potential gains are not limited to increased transparency, security and efficiency. As mentioned, by attaching a crypto chip any physical object can be turned into market places.
Are you interested? You can find additional information, use cases and more in our Point of View “IoT powered by Blockchain - How Blockchain technologies facilitate the application of digital twins in IoT” as download on this page.
The Deloitte Blockchain Institute matches our customers with experts on the subject of blockchain and supports them in dealing with the pressing questions and business opportunities arising from the emergence of blockchain technology.
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