Business world biggies Cisco Systems Inc, Bosch Ltd and several others have come together to form a consortium to brainstorm on how blockchain technology can be used to secure and improve “internet of things” applications.
As sectors beyond finance are now seeking to look for ways through which they can benefit from bitcoin’s underlying technology, setting up such a consortium is a welcome move.
The group, which also includes Foxconn Technology Group, Bank of New York Mellon Corp, security company Gemalto and several blockchain startups like BitSE, Consensus Systems and Chronicled Inc apart from Cisco Systems Inc and Bosch Ltd, have said that they will join hands to come up with a shared blockchain protocol for IoT – the concept that makes everyday objects, right from shipping containers to washing machines, to connect to the internet and send and receive data.
While having more and more internet connected devices spells a golden period for both businesses and consumers, but it also increases the scope of the devices that can be hacked.
For the unversed, a blockchain is basically an anonymous online ledger that makes use of a data structure to make the process of transaction an easier and simpler process. It provides users the ability to manipulate the ledger in a safe way without seeking the support of a third party.
While a bank’s ledger has connections to a centralised network, a blockchain is anonymous as it helps in protecting the identities of the users. This is what makes the technology of blockchain a safer way to carry out transactions than any other existing processes. Blockchain’s algorithm reduces the dependence on people to verify the transactions. This technology, which is currently being used for recording various transactions, has the true potential of completely disrupting the financial system in the near future.
According to experts, the technology, which is still in its nascent stages, could provide additional security and better identity management features to internet of things applications.
The newly formed IoT consortium is one of the several collaborative efforts being made by big companies to advance the development of blockchain technology. Last year, we reported about how R3 CEV, a famous New-York based financial technology company, has formed a consortium of more than seventy of the biggest financial institutions in the world to focus on ways to make use of the blockchain technology in the global financial markets. Tech companies such as IBM Corp and Hitachi Ltd are also a part of a consortium being led by the Linux Foundation.
While companies from different sectors are working towards ways through which they can use the blockchain technology, it is the financial sector that is currently fairing better than any sector in making efficient use of the technology. In fact some financial firms have announced that they are planning to deploy new blockchain systems by the end of this year.
The formation of the internet of things consortium highlights how companies are planning to make bigger moves in blockchain technology this year.