identity of each participating node.(9) One key application is likely to be in the next generation
of the industrial network (the Industrial Internet). Filament’s blockchain-based applications
involve sensors connected in a decentralized system and use autonomous smart contracts. This
means that devices communicate securely with each other, exchange values, and execute actions
automatically. For instance, Filament’s Tap can be attached to drilling rigs in remote locations.
Based on predefined conditions, a rig might know that it requires a piece of machinery and thus
send a request to an autonomous drone.(10)
Measures are also taken at interorganizational levels. A group of technology and financial
companies have announced that they have formed a group to set a new standard for securing IoT
applications using blockchain. Companies joining the group include Cisco, Bosch, Bank of New
York Mellon, Foxconn Technology, Gemalto, and blockchain startups Consensus Systems,
BitSE, and Chronicled.(11) This group hopes to establish a blockchain protocol to build IoT
devices, applications, and networks.(12)
Identity and Access Management Systems
Blockchain-based identity and access management systems can be leveraged to strengthen IoT
security. Such systems have already been used to securely store information about goods’
provenance, identity, credentials, and digital rights. As long as the original information entered is
accurate, blockchain’s immutability can be achieved.(13) In this regard, a key challenge that
arises in some applications is that it is difficult to ensure that the properties of physical assets,
individuals (credentials), resource use (energy and bandwidth through IoT devices), and other
relevant events are stored securely and reliably. This aspect can be handled relatively easily for
most IoT devices. For instance, a private blockchain can be used to store cryptographic hashes of
individual device firmware. Such a system creates a permanent record of device configuration
and state. This record can be used to verify that a given device is genuine and that its software
and settings have not been tampered with or breached. Only then is the device allowed to
connect to other devices or services.
Returning to the Dyn example, IP spoofing attacks were launched for the later versions of the
Mirai botnet. Blockchain-based identity and access management systems can provide stronger
defense against attacks involving IP spoofing or IP address forgery. Because it is not possible to
alter approved blockchains, it is not possible for devices to connect to a network by disguising
themselves by injecting fake signatures into the record.(15) The earlier example involving
Filament’s Taps illustrates this point.
Cloud versus Blockchain Models
In the cloud model, IoT devices are identified, authenticated, and connected through cloud
servers, where processing and storage are often carried out. Even if devices are a few feet apart,
connections between them go through the Internet.(15)
First, IoT networks that have high costs are a concern in the centralized cloud model. Gartner
estimated that in 2016, 5.5 million new IoT devices were connected every day.(16) It is
estimated that by 2020, a network capacity that is at least 1,000 times the level of 2016 will be