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Blockchain of Things: A revolution in the Internet of Things

The sheer number of devices in today’s world that are, or are trying to be “smart” is one of the greatest challenges (and opportunities) in the world of technology. Perhaps the most important of them is the device that each of us carries in our pockets – a smartphone.

However, the dynamic development of wireless networks as well as the trends of digitization and miniaturization mean that “smart” features are becoming integrated into more and more public infrastructure facilities or home appliances around us.

The quantity and possibilities of these items do not yet make them networks, just as we cannot yet call a collection of individual houses a city. This requires critical infrastructure to connect individual structures such as roads, streets, electric cables, and water pipes, and free access to it for residents.

Blockchain technology has the potential to be this infrastructure and underpin the smart cities of the future. Why?

The telecommunications industry has grown significantly in the last 30 years when it switched from analog to digital technology. The GSM standard currently covers the entire globe and is the most common telecommunications standard in the world. Data transfer speed has increased, but not a data structure.

The value of data sent via the operators’ infrastructure is much greater than the data transmission service itself. When this infrastructure was built in the 1990s, this was not yet obvious. This is due to the enormous success of companies such as Facebook or Google, which rely mainly on data and their analysis, and not on infrastructure (infrastructure investments in these companies are secondary, as opposed to with “classic”, large telecommunications operators).

As a result, large telecommunications operators lost their privileged position in the analog world and were reduced to the role of subcontractors and suppliers of infrastructure from which others derive the greatest profits. On the other hand, the costs of expanding the infrastructure and purchasing frequencies for data transmission are enormous and are borne only by providers. Growing profits, taken over by big data giants, do not go to the operators providing critical infrastructure.

This presents large telecommunications operators with a completely new challenge, both quantitative and qualitative (the requirement to develop completely new communication standards in the area of compatibility, interoperability, and security).

There is a huge demand for a new communication standard that can completely reverse the situation and trigger a revolution in the world of IoT and the future of smart cities. It is blockchain – a system of distributed servers of an open-source nature, available to everyone, fully transparent, secure, and enabling programming of its operation and application in a potentially infinite number of IoT and smart city solutions.

By letting the stream of data encoded in blockchain technology into the infrastructure of GSM operators, we are able to identify every single portion of data, their producer and source, ensuring a fully transparent, universal, global, and most importantly – secure communication standard, starting with large, transnational corporations and organizations , cities, governments and local governments, through to smaller economic actors, to households and the single end-user.

Attempts have been made to standardize the exchange of data many times, but so far it has not brought effective solutions on an appropriate scale. The latest idea is the so-called “Public clouds”, which, by combining technological, logistic, and legal solutions, enforce some kind of standardization at the state level by means of political solutions. However, this applies to a limited number of entities – local governments, offices, and the type of data related to critical infrastructure, e.g. electricity meters.

One of the examples of the implementation of this solution is the just-launched National Cloud, whose task is to support the Polish digital transformation, increase the pace of development, reduce operating costs and provide tools thanks to which enterprises will agile innovate and adapt products and services to rapidly changing market expectations.

A decentralized cloud built using blockchain technology is becoming something more than national – fully public, global, democratic, in which both large corporations and entities, as well as individual entrepreneurs and citizens. Thanks to this, we can imagine a world of equal opportunities.

The business and technological awareness barriers are so great today that local entrepreneurs, even with the most innovative product and higher quality of services provided, are not able to compete with global big data behemoths. The internet world promotes the biggest players and adheres to the principle of “winner takes all.”

Users using blockchain technology are no longer just petitioners and clients of global corporations who have been lured into their walled garden ecosystems under the guise of free services but are becoming independent entities in the global free market for goods and services, where the key competitive criterion remains quality and price, not money and the marketing power of the biggest players.

Equality in access to information means that the bidder can reach any customer with his offer, who also uses universal blockchain solutions, without incurring the cost of a barrier to entry.

The combination of Blockchain technology and the Internet of Things is a real revolution not only in the world of technology but also in the global economy. By enabling multiple players to compete on an equal footing, the blockchain revolution introduces new rules of the game, creating equal, fair, democratic access to services and technology that benefits everyone.

Written by- Dr Sebastian Grabowski

IoT & Advance Technology Director Orange Poland

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