By Thomas Spencer, Telecommunications Lead, R3 and Phillip Harrison, Head of Digital Process, Fifth9
With communications service providers focused on rolling-out of 5G and LPWA networks, the rapid rise in IoT devices, and the maturing of enterprise blockchain technologies, have we finally reached a technology gateway to start realizing the potential of Smart Cities?
There is forecast to be 21 Billion IoT devices online by 2025, but devices on their own have limited usability. Devices that require low power or produce high volumes of data transmission have until now been difficult and expensive to support. However, with 5G and LPWAN, low power devices and devices like cameras producing large amounts of data can now be supported. The convergence of these technologies with IoT applications and blockchain creates an opportunity for CSPs to provide enterprise and retail customers solutions enabled with immutability, security, smart automation, scalability, and low-cost transaction capabilities. We are excited to see these digital enablers coming together with the potential to unleash smart city capabilities.
Fifth9 and R3 have just worked together to deliver a project enabling devices with low power CPU’s to ‘talk to each other’ using WiFi, and execute a transaction using Corda and a token payment.
The application developed allowed devices to reach consensus about their proximity to one another when those devices have no inherent reason to trust each other, and exchange a token based on some business logic about those locations. This ‘proximity’ feature has been built for test purposes but can be applied to many smart city use cases, where devices need to ascertain each other’s location and pay one another accordingly — such as using toll roads or parking spaces for example.
With Fifth9’s 10 years + IoT & telco experience, and R3’s leadership in enterprise blockchain this blog talks about the opportunities and risks which need to be faced when wanting to realize the massive opportunity that 5G/IoT & Blockchain provides within the Smart City landscape.
The ‘smart’ industries are forecast to be big business; by 2025 — the Smart Building market is estimated to hit $93B (rethink research), Smart City projects to be $134B (IoT analytics 2018), and IoT Manufacturing to be $136B (Deloitte).
In a world of billions of IoT devices being supported by 5G connectivity, businesses will need these devices to interact and transact with one another in a secure, scalable, cost-efficient and trusted way. Anonymity may be required, but it is also unlikely to be desirable in many enterprise use cases or government authorities are involved. Therefore, enterprise blockchain provides a proven and robust technology to be able to remove the risks of subjective blame, denials of fault or a lack of transparency from IoT applications and Smart City deployments.
With the growing number of IoT devices coming online, we expect to see the first enterprise blockchain-enabled implementations to come from B2B use cases which require devices to exchange services with one another. Second, we expect to see use cases where devices are required to capture information, such as container tracking or video feeds, and the validity of the authority and chain of that information is highly valuable. These initial deployments will be focused on enterprise use case deployments, before thirdly scaling across consumer retail products.
Today across the Corda ecosystem we are seeing CorDapps leverage other technologies, such as IoT and 5G, being adopted across industries rather than being siloed within sectors. For example, retailers are using IoT devices to track agricultural supply chains, insurers are leveraging IoT devices to automate claims payouts, and utility providers using IoT and blockchain-enabled devices to better track and manage their service networks
.For the Smart City concept to work with the proliferation of IoT devices and the greater functionality of their applications, the technologies need to work together in a consumer-friendly fashion. Devices and applications need to be able to securely interact and transact with one another.
For there to be a future where B2B, B2C and C2C opportunities such as real-time automated energy trading, autonomous car-sharing or data monetization are real, then the rails that these applications transact on needs to natively support interoperability. Interoperability means; integration with existing systems, initiation of transactions on other rails, interchain transactions, intrachain transactions and the ability to interchange platforms as required. R3 is working closely with our ecosystem of partners and customers to support these requirements in the Corda roadmap, our CTO Richard Brown recently wrote an excellent article outlining this approach.
With the maturity of enterprise blockchain platforms, it is exciting to see growing ecosystems of not just tier one CSPS investing in the development of enterprise blockchain-enabled IoT applications, but also large numbers of startups and other solution developers as well.
As the leading provider of enterprise blockchain software to various industries, R3 has observed the convergence of industries across IoT use cases and adoption. Corda is being used as a digital enabler for IoT applications to enable devices to automate business processes and workflows and reach consensus about shared facts such as the exchange of value, execution of agreements or completion of some business activities.
There is, however, definitely more to do in this space to make it a reality. Device security is paramount and cannot be underestimated, financial decisions such as whether IoT devices should ‘hold’ or connect to a monetary wallet need to be made, and trust, in the technology, needs to be shared which includes potentially forcing unbreakable rules on what the devices can’t do/connect to/know.
Deploying blockchain to the edge brings with it significant technical and commercial challenges. Firstly, as with any network technology adoption is key. Enterprises who wish to leverage blockchain in their IoT applications need to make sure they are open to collaborate with large ecosystems, such as the Corda open-source ecosystem and take part in projects with participants along their value chain. Technical advances need to be made, and R3 along with others are already making progress here. Protocols need to be able to be integrated with edge devices, and where possible this needs to be standardized and toolkits made available to reduce the cost of deployment for application developers. As ever, scalability, performance, and privacy are going to be large challenges for blockchain-enabled IoT applications. Corda is uniquely designed to cope with these, but the scale in the number of transactions and level of complexity from IoT devices is huge.
Therefore, as we have discussed, with the roll-out of 5G and LPWA networks as well as the improving maturity of IoT and enterprise blockchain we have now reached a technological horizon where we can start to realise the true potential of smart cities. The convergence of industries to collaborate and leverage these technologies together is also incredibly exciting. However, there are large challenges ahead. Fifth9 and R3 are excited to see where it goes, and strongly believe that by working with a spirit of collaboration and discovery, as well as capitalising on the convergence of technologies, we can make Smart Cities truly a reality.
Sign up for our newsletter to receive the latest R3 news, updates, and materials