3 min read

Why IoT needs blockchain to grow

Robert Neivert

Venture Partner

Published

10.10.18

What if every company had their own version of WiFi that did not communicate? Can you imagine how difficult it would be to try to connect and get anything done?

But that is exactly what is going on with the Internet of Things (IoT) today: many companies are building their own version of authentication and communication protocols that don’t talk to each other, crippling IoT’s growth and innovation.

A lot has been written about IoT, and for good reason. By 2020 there will be over 30 billion devices—from cameras and alarm systems to cars and trains—connected to the internet, with billions more coming online every year.

Firms spend billions every year to bring IoT devices into these complex ecosystems.

Deploying these IoT ecosystems is expensive because developers often have to build, assign, provision, manage and protect their own devices (something that is well defined in WiFi with standards like WPA2 and 802.11ac).

What seems like a simple task of determining which device has sent what data to an application is exceptionally complicated. Devices can be spoofed, and man-in-the-middle attacks can manipulate or replay data in transit.

Developers are still running into challenges around identity, trust, and interoperability when building a network of connected devices. Devices must have a secure identity (usually denoted by a Public Key Infrastructure, or PKI) in order for others in an ecosystem to trust them enough to exchange data.

Right now, it is technically possible to create high performance IoT device systems that are secured by cryptographic keys stored in device hardware. Unfortunately, for most companies, the cost and difficulty of assigning devices a secure identity is beyond their project scope. The effort required is technically onerous, prohibitively expensive, and creates siloed ecosystems that hinder broad-reaching interoperability.

The internet-to-phone industry faced a similar problem in 2008, when it was extremely complicated to send a simple message from your computer to your phone. Developers were stuck, unable to directly communicate to phones from their applications, then Twilio came in with their API to solve the problem.

What if there was a Twilio for IoT?

The IoT industry is crying out for a product that developers can just snap-in to deal with a wide range of industry issues – a simple standard that allows IoT companies to quickly and effectively deal with the authentication and communication protocols in a uniform way.

I see a lot of potential in using advanced chipset features, crypto-keys, and blockchain to solve this problem. PKI is great, but troublesome to use, so a bonus would be making that easier to use as well. I like this approach and it is one of the reasons we are working with Ockam to solve it.

Ockam is a decentralized, open platform for any developer to add identity, trust and interoperability to their IoT solutions. They are also launching the Ockam Blockchain Network, which is specifically tuned for the needs of connected devices, and a set of Open Source SDKs that help to democratize access to IoT for developers of all types.

Here at 500 Startups, we’ve seen developer tools that have simplified complex ecosystems, making them approachable for vast communities of developers. For example, Heroku’s “$ git push heroku master” abstracted away the management of a data center for Ruby developers in the early days of cloud computing. Stripe has simplified complex payment processing environments in the very same way.

Each of these tools have lowered the barriers to participation with complicated technologies so that developers can focus on the application functionalities that drive core business value and enable rapid growth.

Interested in being an early adopter of the Ockam Blockchain Network? Check out Ockam.io and follow them on twitter @ockam_io.

Want to chat with us about your Blockchain or IoT project? Let us know at Rob@500.co or on Telegram NoOneofSignificance

 

Robert Neivert

Venture Partner

Rob is presently a Venture Partner at 500 Global specializing in B2B seed investments. Previously, he was an executive for startups having founded or worked at eight companies with four exits and four companies still operating. Rob was CEO for the last two venture-funded start-ups. He also maintains a broad domain of expertise, having held leadership positions in products, marketing, and operations. Academic credentials include a BA, BS, MS, and MBA degree from Stanford, Wesleyan, and Santa Clara. In addition to his role at 500 Global Venture Partner, he is a mentor/advisor for Cardinal Ventures, Stanford iFarm, and Stanford’s Treehacks program as well as an executive advisor for over 15 funded startups, and previously held the position of Executive in Residence at Quest Venture Partners.

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