The relationship between the blockchain and the internet of things may turn out to be especially rich because the blockchain means that the virtual world can be constrained to be like the physical world.
I happened to be looking at something Simon Dixon had written about Bitcoin and noticed that he’s included a few quotes about it from famous people. One of them stood out to me, probably because it was the one that wasn’t about payments or money or currency and therefore pandered to my own well-aired views about the relative importance of the Bitcoin currency and the blockchain technology. And it came from someone who I imagine is tolerably well-advised about new technology.
“Bitcoin is a remarkable cryptographic achievement and the ability to create something that is not duplicable in the digital world has enormous value” – Eric Schmidt, CEO of Google (March 16th 2014)
Eric is talking an aspect of the blockchain that we at Consult Hyperion find fascinating. Something that makes the virtual world more like the mundane one. In the mundane, there’s only one of everything. Only one of me, only one of this particular computer and the unique South West trains carriage that I am writing in. In the virtual world, there is no such restriction based on quantum mechanics and the nature of physical reality. There can be an essentially infinite number of everything. The real me can’t be copied, but the virtual me can. Anything digital can be copied. (In the world of money, we call this the “double spending problem”). But you can make a blockchain in the virtual world with only one of something. Guaranteed. And you don’t have to trust everyone else not to copy it. They can’t.
This makes for a one-to-one mapping between the virtual and the mundane that opens up a new way to look at the problem of creating virtual objects that can represent real ones. We are not the only ones to have noticed this, naturally.
Speaking with CoinDesk, a Microsoft spokesperson said: “The technology behind bitcoin also represents an interesting set of new technologies to explore in the world of distributed, connected devices”.
Though the words “Internet of Things” were not used, the code words are clear.
I’ve said before that I think the relationship between blockchain technology and IoT technology is interesting, bordering on the exciting, and may provide a wholly new areas of business for our kinds of clients. By which I mean clients who do real transactions and therefore need real security.
Having all these devices connected to the public internet opens up a Pandora’s Box of horrendous possibilities. You only have to consider the havoc wreaked by malware such as the Stuxnet worm to imagine what could happen if every electronic device is exposed via the internet for hackers to work away at.
Did I mention privacy? Imagine what information could be gleaned about you when data could be surreptitiously gathered from every device you own.
Well, indeed. And this is why we can see so many opportunities for people to create a security infrastructure, use it to deliver privacy and simultaneously deliver services that do amazing things. There has to be an easy way to stop you from turning on my light bulb when I don’t want you to but grant permission for you to turn on my light bulb when I do want you to.
This Internet of Things is the network equivalent of the Big Bang. Business in the digital economy is inherently cross-domain, yet security policy isn’t. The result is a universe of people, applications, and devices that is chaotic, insecure, and reduced to trillions of aggravating passwords.
I rather like the word “identiverse” and I think it’s quite a good way to describe a blockchain that is made up of “coins” that correspond to physical objects in the real world. I mean this is in a strong sense, in that the manipulation of the identiverse extends into the physical. If I transfer the “coin” that is my car to you on the blockchain, then it becomes your car in the real world.
Wjy not just have a database of cars, you might reasonably ask. Well, we’ll come back to this again because it’s one of the topic that I imagine will be covered at Consult Hyperion’s 18th annual Tomorrow’s Transactions Forum in London on 18th-19th March this year. Our Mobile Money Deep Dive last year was so popular that year we will be running two Deep Dives alongside the main programme. One of them will be the Cryptocurrency Deep Dive featuring Vitalik Buterin from Ethereum, Richard Brown from IBM, Preston Byrne from Eris, Tom Robinson from Elliptic and our very own Steve Pannifer from Consult Hyperion. Izabella Kaminska from the FT will chair the panel discussion. Do come along. As always, it is being restricted to 100 places so that everyone gets a chance to meet and interact with our terrific speakers and panelists.
The reason we can run such a powerful event for only 100 people is that we have incredible sponsors who stand behind the event and share its goals for open and honest discussion and debate to help us all move the state of the transaction art forward. This year our Platinum Sponsor is Worldpay, our Gold Sponsors are Visa Europe and VocaLink and our Silver Sponsor is again Olswang. NCR Alaric are the kind sponsors of our Future of Money Design Award competition again (you’ll see the finalists at the Forum). See you there.