The Future Is Bright With IoT, Blockchain And Automation

The future is bright with IoT, blockchain and automation. Given the trend leading toward decentralisation, a blockchain approach will mean better efficiency, security, and incentivization

Since the advent of Bitcoin a decade ago, the technology behind the cryptography-driven decentralised ledger has undergone a lot of innovations.

Blockchain technology was originally intended as a means to execute, verify, and record transactions through a decentralized ledger.

While its most popular applications have been in cryptocurrency and payments, smart contracts are now leading in terms of impact in real-world applications.

Smart contracts enable the automated negotiation, fulfilment, and execution of agreements done through blockchain programming.

This is done without the use of a centralised organisation or authority, meaning lawyers, agents, notaries, and other intermediaries will no longer be necessary for the enforcement of such agreements.

However, the decentralised and trustless nature of smart contracts does come with problems.

For one, in the real world, notaries exist as trusted authorities that verify and keep a record of contracts.

But if it involves specific parameters like location, there needs to be a means of verifying such details without necessarily putting users’ privacy and data at risk.

One glaring example of this is in e-commerce fulfilment.

Till date, there are already several e-commerce sellers and major establishments accepting cryptocurrency as a form of payment for their goods or services, including Shopify sellers and even Microsoft.

This comes with even more challenges.

Crypto payment does not provide a chargeback mechanism, which makes it a potential target for fraudulent transactions.

For one, funds will only be transferred from a wallet to the seller’s once the item is received – somewhat akin to the “cash-on-delivery” option still popular in most Southeast Asia markets.

There is a location-based aspect to such execution of smart contracts, which means that a person or item needs to be at a given place at a given time in order for the parameters of the smart contract to be valid.

Such location-specificity is viable not only in the e-commerce setting. It is also essential in other industries.

As another example, in augmented reality (AR), a user’s exact location and orientation will play a big part in the effectiveness of the technology.

Without verifying location, it is easy to game the system through fake reviews – wherein fake reviews can flood the review mechanism to increase or decrease the rating of an establishment like a restaurant, hotel or a tourist spot.

In banking and finance, location can be a vital component of the Know Your Customer or KYC process.

Here, service can be provided (or denied) based on their location.

While the essence of blockchain and crypto intends users to be able to transact without borders, there are specific regulations that might prevent users in certain countries or regions from doing so. Here, location-awareness will also play a big part in ensuring such rules and regulations are met.

Automation and IoT to the rescue

In the context of smart contracts and decentralised infrastructure, the challenge of verifying locations can be addressed by instituting some form of validation.

This traditionally involved establishing location through GPS triangulation, but this is fast becoming displaced through other mechanisms.

“Centralized authorities are susceptible to interference, attacks, and failure, and are thus not a viable source of data for smart contracts,” shares Arie Trouw, Co-Founder and CEO of XYO.

He stresses that in a decentralized context, “there is a need for a consensus-based network of interconnected devices that records and verifies real-world events in order to make the resulting data available in a distributed, trustless, and secure manner.”

For this purpose, a trustless system of validation will essentially involve the internet-of-things – devices that automatically talk to each other in order to derive, confirm, and share location information all without unnecessarily risking other personal information and without relying on a centralized authority.

Here is where blockchain can potentially make a big impact on the real world. In the case of Trouw’s XY Oracle Network, X and Y refer to coordinates, and “oracle” refers to how location data can be specifically and securely recorded through interaction among location-gathering oracle devices, verified through a cryptographic proof of origin chain.

The result is real-world impact by enabling smart contracts to be executed upon actual delivery or transfer of goods or simply present in any given location. Participation in the location network incentivizes participants in the network, too, for verifying location data.

As with most technologies, the long-term success of blockchain-driven solutions will be in how widely it is adopted and how well-integrated it will be into our daily lives.

One marker of success is when things are so ubiquitous that we are no longer aware they are there in the first place. As Google’s Eric Schmidt told at a World Economic Forum panel on IoT.

“There will be … so many devices, sensors, things that you are wearing, things that you are interacting with, that you won’t even sense it.”

Location-awareness has already gained full acceptance and application, especially given the ubiquity of smartphones and apps that utilise device location such as mapping, tracking, finance, and even gaming.

And this is how blockchain tech will have a meaningful impact in the real and physical world, even if we don’t necessarily feel it is there.

Source: e27