#Blockchain, #5G and #IoT

Ben Schwarz
Jun 19 · 7 min read

Can the combination of three of today’s most hyped technologies deliver greater efficiency to industry, open new marketplaces and change society?

Photo Sven Hoffmann

The interconnectedness between individuals and companies has been growing for decades at an ever-increasing rate. Our lives and work are ever more connected. Now machines are also communicating with machines — the printing press, the telephone, broadcast media, or the internet, each added momentum. Blockchain technology is ushering in another wave. This technology further facilitates exchanges and creates new marketplaces.

DLT is ideally positioned to enable 5G to fulfil its promise of connecting many more devices. Being able to connect many devices securely is at the heart of the IoT promise. However, the synergistic relationship works the other way too as 5G brings features that accelerate Blockchain take-up. Blockchain, 5G and IoT are a coherent set of technologies that will together change our economies and our lives.

To get to grips with this, I spoke with Tom Fuerstner, RIDDLE&CODE’s CTO and founder. The startup is working on the use of DLT throughout their clients’ operations in areas as diverse as human and machine identity, custodial Fintech solutions, enabling machine-initiated transactions, fraud prevention or secure IoT connectivity.


Blockchain enables 5G enables IoT

The rollout of 5G started at the end of 2018. The new cellular network technology promises to enable IoT to truly take off by allowing many more simultaneous connections that require less energy.

Reminder of the relevant aspects of 5G cellular networks :

  • higher speeds
  • lower latency
  • connection of more devices
  • coming to most markets by 2020

The astronomical target of 1 million simultaneous connections per square kilometre, at over 10 times the highest population density anywhere in the world, isn’t that huge when you consider the potential for all the connected devices in a bustling smart city. One way 5G achieves this is with a more varied use of radio spectrum, which poses challenges of its own. MIT Technology Review quotes a US FCC commissioner explaining why we need better ways of allocating frequency resources: “AI and Blockchains would allow wireless devices to make more dynamic and flexible use of different frequencies within the wireless spectrum, enabling billions of devices to connect to 5G networks at once.” DLT helps keep track of who has access to what. Blockchain technology is bringing in the next generation of billing, security, trusted Cross-Carrier Payment Systems and Identity management. RIDDLE&CODE is working with operators such as T-Labs to enable this with a Blockchain-as-a-service approach.

Security for 5G

DLT and tagging technologies developed by RIDDLE&CODE give secure identities to machines so that they can become trusted data sources. Network equipment can be associated with a Blockchain so that it is impossible to fake its identity. Other devices or people that interact with any network equipment can use cryptographically secured communications too. Blockchain can indeed remove that level of risk and even play a central role as part of the network’s control plane while network operators continue their push to virtualisation. This inexorable push to virtualisation, as seen through SDN (Software Defined Networks), for example, replaces bespoke hardware elements with software running on cheap standardised computing infrastructure, often in the Cloud. A network element that can be instantiated on any generic piece of hardware, such as a server blade in a data warehouse, even if it’s a private one, has an even stronger need for secure identity than the dedicated hardware it replaces.

It is not just access security that DLT can bring to the nascent 5G market. Immutability is another aspect of Blockchains that adds to security. Records of previous transactions or network equipment configuration can always be accessed opening the way to disruptive methods of designing networks and dynamic hacker-proof resource allocation.

Security for IoT

In the existing client-server model that underpins most Cloud-based services, say for a Nest thermometer in a subscriber’s home, the device’s identity is stored in a centralized database. It is not a question of “if” these databases will be compromised, but “when”. DLT’s decentralised architecture protects device identity. Using a decentralised Blockchain protects these identities through the use of asymmetric cryptography and secure hashing algorithms. Devices are registered according to their corresponding Blockchain addresses, guaranteeing their identity. This Blockchain layer provides a much higher level of security and frictionless identification than existing centralised infrastructure.

In his excellent Coin Telegraph article, Ben Whittle discusses how one of the main impediments to IoT’s success is security. He states that “the combination of 5G and Blockchain technology has the potential to unleash a surge of economic value”.

Reminder of the relevant aspects of IoT:

  • a new generation of smart connected devices has the ability to process and store data locally
  • faster, more sophisticated industrial processes can now be enabled by better sensors
  • device “intelligence” is enhanced with AI in the Cloud

However, 5G still relies on 4G infrastructure and so has inherited some of its security vulnerabilities. Michael Dawns explains how, for example, Diameter, the IP-based signalling protocol is a target for hackers and poses serious threats.

As Blockchains cannot and should not store everything, next-generation IoT devices also play a role. Connected devices now possess enough local processing and storage to exhibit the intelligence required to sort through data to store or transmit only meaningful information. Where local data is necessary but too voluminous to be stored in-chain, an intermediate solution is to store the data locally and insert a link to the data along with its hash on-chain. There already are decentralized solutions well suited for such an architecture, like IPFS, the InterPlanetary File System.

Light Reading’s Editor in Chief Ray Le Maistre recently wrote: “Blockchain technology is looking increasingly likely to play a role, alongside and supporting traditional databases, in helping to manage and secure transactions and identities once 5G is fully deployed.”

Mobile Edge

Mobile edge computing has been on the radar for years. 5G has smaller cells that fit well into an edge computing architecture. The “edge” is something operators need to embrace to stay away from the “dumb pipe” model and leads to many more smaller computing facilities. Beyond the pure network latency reduction 5G offers, end-to-end latency reduction, for more complex services involving IoT devices, is beneficial. However, specific security challenges arise here that DLT can address effectively.

Autonomous vehicles require low latency reliable trusted data sources and transmission and are part of the sensor-driven smart-cities of the future that can thus be driven by Blockchain-enabled 5G. Enabled by Blockchain technology, IoT, Smart-cities and autonomous vehicles see their definition evolve and may even merge in the coming years. However, even older, more traditional infrastructure like trains also benefit from 5G where the French SNCF, for example, can run up to 40% more trains on the same tracks thanks to the new network’s abilities.

Consensus

Consensus algorithms are another aspect of DLT that play an essential part as the myriads of devices need to agree if, for example, a sensor reports a discrepancy. DLT can provide a solution for settling disputes between IoT devices that could not otherwise settle transactions or smart contract conditions. Today, agreements may be limited to what the temperature is; however, tomorrow, these devices can leverage Blockchain consensus algorithms to transact value and make the critical decisions needed to operate autonomous vehicles.

5G also enables Blockchain

The enablement of 5G through Blockchain also works the other way. 5G is sometimes called a Low-Latency, High-Reliability technology. The reduced latency of 5G and its far greater connectivity helps solve one of Blockchain’s current growing pains: that of scalability. With 5G, DLT can be more ubiquitous, more responsive and more secure thanks to greater decentralisation.

Smart contracts are self-executing contracts that offer one of the more disruptive promises of Blockchain. They enable a fault-tolerant distributed computing architecture. However, unlike ordinary contracts, they can enforce the rules. To do this, they need access to data, and a common way of implementing this is through Oracles, whose role is to provide this data. In a 5G world, with ubiquitous connectivity, smart contracts are easier to implement even in low-density areas or on tiny devices like sensors.

Scalability

The scalability issue has been at the heart of much of the Blockchain related research over the last few years. Bitcoin, the mother of cryptocurrencies, has implemented the concept of a secondary — or layer two — “lightening network” that records smaller, more frequent transactions so that only an aggregation of these needs to be recorded on the main chain. Ethereum has used the database technique of sharding and developed projects such as Plasma. IOTA or BigChainDB are examples of Blockchains that have been developed from the ground up with IoT and its scalability challenges in mind. Yesterday’s scaling challenge was just part of DLT’s growing pains as solutions are already on the market. Transactional capacity in the thousands per second is already in reach on leading chains, with possibilities to go many factors higher on secondary chains. Moore’s law is working overtime on Blockchain scalability, with capacity improving by an order of magnitude every generation which takes a year or two to come through. We will, therefore, be able to cater for the exponential growth of IoT data as more devices come online and have a more important role.

Furthermore, well architected Blockchain-based projects can always switch from one underlying technology to another. A Blockchain-based project launched in 2019 with scalability restrictions can leverage community developments to scale without compromising security or decentralisation.

5G networks can also provide part of the solution as they offer vastly reduced latency.

Ben Whittle astutely noted in the article mentioned above that “The buildout of 5G and layer-two Blockchain infrastructure are fortuitously coinciding, providing the necessary scalability and coverage for an IoT-oriented economy.”


Blockchain, 5G and IoT the perfect storm

With 5G and blockchain, all the ingredients have now come together for IoT to take off. Secure machine identity and Blockchain attributes such as trust, immutability or non-repudiability come to mind first. We also have a growing number of next-gen smart connected devices at home with their own processing and storage capacities. 5G’s improved and ubiquitous connectivity allows services to be delivered with a combination of IoT and the Cloud to get smarter by the day. Better industrial processes are now possible thanks to smarter sensors and the programmability of Smart contracts.

RIDDLE&CODE Blog

THE BLOCKCHAIN INTERFACE COMPANY. The first and only company to build blockchain specific hardware that can sit on any IoT device, physical or digital goods.

Thanks to Katharina Koeck.

Ben Schwarz

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Innovation consulting, TV technology, Blockchain, VR, Writing, Public Relations, QoE, Music, Sustainability

RIDDLE&CODE Blog

THE BLOCKCHAIN INTERFACE COMPANY. The first and only company to build blockchain specific hardware that can sit on any IoT device, physical or digital goods.