Internet of Things on a Blockchain Network

The Blockchain meets Internet of Everything Technology

The Internet of Things (IoT) is a realm of technology that has yet to find a defined market. An IoT application offers the ability for devices to communicate between devices for a specific purpose. Usually this communication is limited to a specific device set and are designed to be autonomous. The 2015 Texas Bitcoin Conference unveiled a list of new emerging decentralized IoT applications from their hackathon last Saturday.

And the @TexasBitcoin @DAppsFund million dollar winners are... 1. (500k) - Neural 2. (300k) - LivelyGig 3. (200k) - BitWave Congrats!
— Koinify (@koinify) March 29, 2015

IoT applications have yet to capture a large audience because the advantage of connected devices is difficult communicate to the average consumer. Samsung and IBM have recently collaborated together to create future IoT products using blockchain technology. This partnership will work together on IBM’s ADEPT (Autonomous Decentralized Peer-to-Peer Telemetry) concept that melds BitTorrent’s file sharing protocol, Bitcoin currency, Etherium, and peer-to-peer communication protocol Rehash. IBM has acknowledged the following hurdles with adopting IoT Technology:

• Functional Value
• Privacy
• Anonymity
• Cost effective
• Outdated Business Models

Blockchain’s decentralized ledger brings the IoT model into a new threshold. As the device is created it can be recorded into the blockchain and referenced at any point during the life of the product. A sidechain can be created to manage Internet of Things applications. Sidechains have the ability to operate with larger blocks then the Bitcoin blockchain and even shorter transaction validation times. Sidechain transactions can still be validated on Bitcoin's blockchain through an initial block recording on the blockchain before transferring to an altcoin sidechain. This method maintains the validity of recorded transactions on the sidechain Transaction inputs are validated on sidechains through this decentralized system. When IoT transactions are confirmed, a driver can be dispatched (Uber), or a bed can be reserved (AirBnB) after the transaction is recorded.

This is unuseful to a majority of consumers. There has been adoption of the internet in everyday consumer devices such as cars in the past but have been only designed around increased sales and not usability. IBM suggests that the future of IoT could be in improving the user experience with IoT products. The car could operate with live updates about road conditions or traffic outlooks for your prefered routes. Currently, accessing services through IoT applications are made easier through “Click to Link your Social Media Profile” prompts. These easy-of-use applications make revenue through selling consumer information and IBM believes that this is not a sustainable business trend.

Another current issue for IoT adoption stems from compatibility. Devices created five to ten years ago are not guaranteed to interact with newer devices. Technology is evolving too quickly for past generation devices to continue to work for longer than a decade. Connecting devices to the internet to interact between each one another digitally removes the compatibility issues between devices. LivelyGig is one of the Texas Bitcoin Conference applications to propose a blockchain solution for IoT technology.

LivelyGig - Github

Captured from Figure 1 of LivelyGig's Whitepaper

LivelyGig is offering an IoT employment services portal to connect skilled workers to employers through smart contracts. This is a new business avenue as it removes a traditional intermediary service by connecting the contractor to the client without friction. Individual skill portals such as Assembly.com, or Freelancer.com offer pay-per-content business models, but there has yet to be a decentralized platform for these type of business exchanges. Headhunters and agencies normally pool talented freelance workers together to provide managers the skills needed for various projects. The demand however is based on the prices negotiated by the intermediary and the contracting firm. Prices can be competitive and the benchmark for services will be consensus driven. Creating decentralized job services that can be posted on a sidechain creates a usable recall list for qualified individuals with no need for an intermediary.

Full-time, part-time, freelance and micro-tasks can be tasked without friction or delay of an intermediary. If a prospective job seeker does not meet the specifications of the posted transaction on the sidechain, the transaction requirements will not be met and the contract will not be validated or initiated. LivelyGig hopes to partner with current job portal services to transform the job offering business landscape.

Imagine a mainframe that can only be maintained by a handful of individuals and they are spread out across the country. The firm or the manufacturer that is leasing the mainframe can create parameters that will be monitored for the life of the product. As the mainframe continues to run, a vital problem occurs and the mainframe experiences a critical failure. IBM will be able to create a process for when the mainframe fails, to post a specific freelance request on LivelyGig almost instantly. A qualified individual with the correct inputs can request to complete the job and ‘sign’ the contract posting and immediately depart to the site where the mainframe is located.

There is not enough reliable information about Neural or BitWave to write about those applications at this time, but a further look into similar services can give a view through the looking glass. As IoT technology moves forward, better use cases and design structures can emerge. The creation of autonomous interconnected systems can create new interactions with devices that have yet to be envisioned. Keep a close watch on emerging blockchain technology and it’s usefulness with IoT interactions.

Collecting Information on a Blockchain

Data Available on the Blockchain

The price of Bitcoin is only a single gauge of the level of activity in the Bitcoin Network. At the peak of Bitcoin’s price in December of 2013, transactions peaked at an all time high of 102,000 with an average of 60,000 transactions. Today, with the price of Bitcoin below a quarter of peak value, 100,000 transactions are average. Connecting information to the level of activity in the Bitcoin Network will require further analytic data. The next resource a Bitcoin market researcher could pursue is a Blockchain Explorer.

Blockchain Explorers

Information gathering tools for blockchain inputs offer specific data that is only useable for specific use cases. There are two levels of API’s available for developers to design software applications. REST API and Webhooks API SDK. The difference between these tools is how the data is recalled. Webhooks can be created to send a notification of a specific event, such as the creation of a new block. Highlighted below are a few explorative services and data sets that can be collected from various interfaces:

Biteasy GitHub Library

Biteasy has the longest reputation of block explorers on this list. Biteasy updated to version 2.0 in March with more features for developers to create applications with Biteasy’s REST API. A new feature of Biteasy is independent Input and Output values end-points that can be isolated individually.

Biteasy Endpoints:

• 

  Address Information
• Multiple or single addresses
• Block Specifics
• Block Hashes
• Transaction Data
• Transaction Hashes
• Data Inputs
• Input Hashes
• Data Outputs
• Output Hashes
• Multisig Verification
• # of multi signatures reached
• Search Functionality

Blocktrail is a Blockchain Explorer firm offering explorer services leaning towards economic data sets. These data sets are more specific financial information and are preferred for tracking market activity or market prediction. The Blocktrail API has the ability to recall that data to user chosen platforms for further analysis.

Blocktrail Endpoints:

• Address
• Address Confirmed/Unconfirmed Transactions
• Address Unspent Outputs
• Blocks
• Block Transactions
• Total Blocks / Latest Block
• Transactions
• Verify Messages

Wallet Analytics

Tapeke (CoinDesk Article)

Tapeke is a browser Wallet Analytic tool that uses your public address to compile transaction information into a GUI. Constructed with the aid of an original Hive Wallet developer, Tapeke allows custom categories and data analytic tools for common bitcoin users. Currently this service assigns metadata to Bitcoins and Transactions of personal Bitcoin Wallets but does not have much third party support. Integration of third party support will be introduced throughout the development process, as well as a stand alone desktop app. The service was introduced in Beta Phase January of 2015.

Features of Tapeke:

• Custom Categories
• Transaction History
• Multi-currency
• Multiple Wallet Integration

Coyno (CNBC Article / Slideshare Presentation)

Coyno is a European Bitcoin analytic firm that grew out of a Berlin business accelerator. Business that are brought into the Alex Springer Plug and Play Accelerator receive €25,000 and mentoring from European and American partners. At the end of a three month period, companies are given the opportunity to pitch their demo to potential investors.

Coyno offers analytic tools for individual monitoring priced at ~$21 annually. Advertised as a “Bitcoin Bookkeeper with a GUI for wallet analytics”, Coyno’s business practices are directed towards monitoring only services. The small development team is adamant on reaffirming that they do not handle wallet keys and data used for account purposes are handled on Coyno databases. (Conyo uses Armory and Bitcore for extracting information).

Data Storage with Blockchain Technology

Storage Capabilities of Cryptographic Networks

Blockchain Cloud Storage

Distributed cloud storage is not a new service that was created by the emergence of Bitcoin. Cryptography is used today by large cloud storage firms to secure data, but the network structure of these firms is different then Bitcoin cloud services. Data is stored remotely on servers owned and maintained by a company offering storage services. The core difference offered by a Bitcoin cloud service is the blockchain ledger that records Data Inputs and Outputs. Data shards are audited while accessed, automatized when indexing, monitored by decentralized consensus, and secured by using cryptography.

Storj - Website

Decentralized autonomous organizations (DAO) offer new avenues to store data digitally. DAOs use a consensus protocol, built into bitcoin transactions, to grant access to data stored with their service. Storj encrypts portions of a file into the leased hard drive space of miners. Those encrypted portions of files are defined as shards and stored in the leased hard disk space. A shard is typically 8-32 MB in size, and may be further modified depending on outside file-sharing auditing requirements. A 32 MB shard does not necessarily mean that all 32MB are the contents of one file. Shards can be combined to create more fluid data flow of specific client information. Majority consensus of the network will allow the data to be recalled if the correct keys are presented. Consensus of the network is accomplished by Proof-of-Storage and Proof-of-Redundancy.

Visualizing storing data on Storj (Whitepaper)

Proof-of-Storage Consensus

Merkle Roots are recorded on transactions (See Below)

To create a trust-less data storage network, Storj uses Proof-of-Storage versus Proof-of-Work that is common in solving Bitcoin algorithms. Proof-of-Storage provides reliability that the data was not tampered with while being stored. Data shards are formed into Hash Challenges, a Merkle Tree is created and the Merkle Root is recorded on the Blockchain. These hashes act as the Heartbeat when providing proof of ownership. A miner that is using space for data storage is given a Merkle Tree without it's leaves. When the shard a miner's seed contains is referenced, the hash answers on the miner's Merkle Tree are verified before data is transferred.

Hash 01 and Hash 23 are "hearthbeats"

The client divides the file into individual hash challenges. The added values of each hash must match the unique hash answers in each Merkle Tree. The client periodically reissues seeds to farmers to verify that shards have not been altered. If a client alters a portion of their data, a different hash answer will be generated and that seed will not produce the correct hash answer. Storj uses predetermined heartbeat combinations that provide access to the contents of the Merkle Tree.

Proof-of-Redundancy

Information transcribed inside a Transaction

Cloud Storage companies today lease space on their servers using RAID schemes to protect from network or physical failure. Storj uses redundant storage of shards to provide the correct shards if multiple nodes are offline. Shards are stored on various nodes connected to each file, each shard contains different values for each hash. Storing files on a blockchain allows a user to compare contents of a file between to frames of time. Small meta-data is inserted into a blockchain transaction which can be referenced for external auditing purposes. This redundancy, provided by K-of-M erasure coding, compares the total # of shards contained in a file to the # of shards recorded when the file was input into a transaction.

Users can determine how many farmers they wish to share shards between. A farmer in this network is a user that has leased disk space to store shards. Farmers are paid in SJCX cryptocurrency on Storj's network. SJCX does not have the same value as a Bitcoin but SJCX values are broadcast on Bitcoin exchanges. Farmers are allowed to price the disk space that they provide, at a competitive rate compared to other farmers on the network. Less important data can be shared between 3-4 farmers at low cost. More important data can be secured with hundreds of farmers each with competitive storage and processing capabilities.

Cleversafe - Website

Compare Storj to other encryption dispersed storage models and research how nodes are validated to see the transparency decentralized ledgers provide. Cleversafe offers All or Nothing (AONT) encryption which enables the entire file to be accessed once a node threshold is met. This is the same erasure code that is used to grant access to Storj files that are separated and encrypted. The difference is the integrity of each node is dependent solely on Cleversafe’s algorithm. Blockchain node integrity is transparent, broadcast on the blockchain and is paired with a network consensus which removes central authoritative controls.

The usefulness of encrypted cloud storage offerings are dependent on the information stored. Smart Contracts and negotiations of those contracts are a future feature of the Storj network. Alternatives to conventional practices will spur innovation in both sectors. For more information on Bitcoin companies and blockchain topics, check out the more articles from previous topics on the Navigation Bar.

"Who controls Bitcoin?"

Adopting Features on the Bitcoin Protocol

Last weekend at the MIT Bitcoin Expo, Gavin Andresen, a lead Bitcoin Developer, was asked, “Who controls Bitcoin?” This question stems from misinformation. Power distribution is a feature embedded in Bitcoin. Features are established by a majority consensus and not by a administrative group. Interaction with digital currencies or exchanges with real currency is a legitimate concern for anyone monitoring the features of blockchain technology. Bitcoin features are a collaboration of core developers and community members. Decisions about new features are established through economic majority.

Mining Rewards Incentivize an Economic Majority

Risk of cartels or other market barriers develop if firms gain large percentages of market power. Completing transactions and the number of hash computations that can be completed is what judges power on blockchain technology. A Hashrate is a unit of measurement that measures how many pairs of SHA-256 calculations can be done in a second.  Peak Network Hash Rates have reached speeds up to 391 Phash/s or 391 quadrillion hashes per second. Bitcoin Mining Farms are expanding hashrate baselines with every new product line. A majority of hashing power can be produced by one mining group, but they still would not be able to control changes to the Bitcoin Protocol.

If a large mining firm attempts to implement a harmful change that could create a barrier to enter the mining market, that branches mining rewards become compromised. The coins mined can be sold on an open exchange but markets accepting Bitcoins can choose any branch (sidechain) they wish to accept. This is a transparent element of Bitcoin that keeps new features beneficial for all users and miners. A trust-less consensus is only achieved because of the transparent nature of decentralized ledgers that are the backbone of blockchain technology.

Bitcoin Development

If a change is large in scale or potentially disruptive, the change is broadcast to the mailing list

Bitcoin is OpenSource and is not a centralized technology. Bitcoin Core Features are collected in various developer forums. GitHub credits 284 registered contributors to Bitcoin Protocol. Contributors do not control the complete development of Bitcoin protocol with live updates or patch cycles. Development of features is independent of the main blockchain, and each developer makes changes on their own branch before submitting revisions. If a developer wants to make a small change, one of the Bitcoin development team members researches the developer’s request via a pull request. The process of how developers submit changes to be tested is streamlined for developers. Bounties can be offered when arranging features to test.

Common Bitcoin Development forums:

• Bitcoin Developer Archive lists previous discussions held between developers who have signed up for this mailing list.  
• Bitcointalk.org is another popular forum for Bitcoin developers
• IRC Channels listed are used for collaborative efforts

The Core Developers of Bitcoin Protocol (Bitcoin.org):

• Gavin Andresen (Core Dev Team Future Outlook)
• Email: gavinandresen@gmail.com
• Wladimir J. van der Laan
• Email: laanwj@gmail.com
• Pieter Wuille
• Email: pieter.wuille@gmail.com
• Jeff Garzik
• Email: jgarzik@bitpay.com
• Gregory Maxwell
• Email: greg@xiph.org

Bitcoin Improvement Proposals

Features that follow an adequate development phase are filtered into Bitcoin Improvement Proposals. Bitcoin development has no formal structure for exchanging ideas so Proposals were created to better suit formulating improvements. Features are labeled with a corresponding number for easy referencing. BIPs are organized into: Standard Track BIPs, Informational BIPs and Process BIPs.

The elevated adoption of Bitcoin Improvement Proposals are measured by the economic acceptance level of the Bitcoin community. The Bitcoin community, in this sense, is anyone who offers things of value in Bitcoin. That value could translated to goods, services, or other currencies. A majority consensus in a blockchain environment is different than a traditional 51/49 margin.

New IDs with Blockchain Technology

Identities on the Blockchain

Changing how Identity is created

The structure of how an identity is managed is evolving. Encryption has been an important tool for technical consumers to protect their private information virtually, but not how that information is accessed. The Federal Trade Commission recommends using encryption to protect your identity online. Trusting third parties, that have single access points of failure, to store all of your information is no longer best practice. The identity of individuals can now be handled with better discretion, than even the owner, once transcribed on a decentralized ledger.

Blockchain technology introduces new ways to use encryption to organize the data flow of your identity and who can view different information that composes your identity. Bitcoin and blockchain operations do not offer complete anonymity. There are alternative tokens that offer a higher degree of privacy than the base Bitcoin Protocol offers. The rise of crypto-currencies will offer various degrees of privacy and have different levels of difficulty to ‘figuring out’ someones identity.

A New Offering for Identity

Facebook, Google, and Twitter store vast amounts of information about their users. In the last few years, these companies have such in-depth privacy policies so frequently that Facebook now gives free Basics Courses on how to protect your privacy online. Skimming over a User Terms of Agreement is an acceptable cultural joke, and many consumers are now unsure of how to secure leaks of their identity. Identity services have begun to emerge using blockchain technology that will link a user identity to the Blockchain; granting no single group control of that identity. Examples of a new offerings for identity is NameCoin and OneName.

Namecoin - Website

The way an individual’s identity is created will evolve as blockchain technological innovations bring new avenues of security. Creation of these new services will come as a need arises for better identification services. Namecoin has emerged as the first legitimate attempt to assign value to data on a blockchain. Namecoin has a similar background to Bitcoin’s creation. An open source code left open to anyone. There are a few differences between Namecoin and Bitcoin but the two are not the same. Namecoin is used to register names on a decentralized ledger that has a similar structure of Bitcoin’s Blockchain. Spending a Namecoin gives you a domain registered at nameid.org. That identity is valid for around 200-250 days requiring a small Namecoin cost to update. A NameID is created. The value of a single Namecoin today is 1 NMC to .0017 BTC.

NameID allows:

• Access websites using the .bit domain (with TLS/SSL)
• Store identity information such as Email, GPG key, BTC address (OneName), TLS fingerprints, Bitmessage address
• Human readable Tor .onion names/domains.
• File signatures, Voting, bonds/stocks/shares, web of trust, escrow and notary services (to be implemented).

OneName - Website (WSJ Review - Article)

OneName is an alternate to a Bitcoin Address and are listed on nameid.org

OneName emerged as a solution to QR codes for sending and receiving Bitcoins. Owning a Name is as simple as registering a new username. The OneName username can be used with Namecoin accepting services to complete a blockchain identity. These identities can be used in Apps and Services in the future that offer quick sign-up to online services without giving any information you don’t assign to that OneName address. Store List Here

Possible uses for Blockchain ID’s

The emergence of a FedCoin (Ad Heavy Article) has been discussed in the last year and is a vision of where government entrance into the crypto-currency domain has been predicted. Countries have recently begun creating electronic money systems as alternatives to traditional fiat currency. The debate of the economic effects of cryptocurrencies on a country's government will not be the focus of discussion here. Aside from monetary government implication, the possibility of identities issued by the government on blockchain systems is also just as possible.

An upgraded ID technology service would offer more information security than traditional identity services. Social security identification numbers can be replaced by a sidechain that offers federal authorized identity hash numbers assigned to transactions on the blockchain. Government services, job offerings, or federal benefits, could all be accessed by referencing an identity transaction on the blockchain. Federal entities could create side-chains that distribute tokens that can be referenced to a single point of creation. Identity assignment will be incredibly more important if a federal level identification is created, but the possibility for services like a Blockchain Federal level ID could be created.

.

Blockchain offers many new ‘killer-apps’ that can be created with it’s new disruptive technology. Keeping informed of how information is handled on any blockchain requires no trust. Transactions are audited with the creation of each block in a blockchain starting from a Genesis Block. The longer a blockchain represents how many audits have been completed. Trust will change the way information is shared, and identity services could be the first of many new tech services over the horizon.