Industrial Internet of Things (IIoT) and Blockchain

Let’s go straight to the point. The Internet of Things (IoT) is “the network of physical devices, vehicles, home appliances and other items embedded with electronics, software, sensors, actuators, and connectivity which enables these objects to connect and exchange data.”

Alright, do you need a practical example of what IoT is to better grasp what this technology looks like? Good, because I have one, but I must warn you that it sounds a bit old school… Remember Nike+ Shoes in the early 2010’s? I know, an era ago already! Anyway, at the time Nike brought to market running shoes that included a specially designed pocket under the sock liner of the left shoe designed to hold a Nike+ Sensor. For people maybe like yourself and for sure like myself who absolutely love to run, this was a dream come true. The sensor would talk wirelessly to my iPod Nano and, as soon as I’d be done with what I had thought for years was a 6-mile run, I’d check my Nano and the verdict would be in: 4.75 miles (what?), 50 minutes (no way!), 450 calories burnt (ah, come on!). “It’s got to be a calibration problem!” Those who were accepting of the facts could connect their iPod Nano to their computer and upload the data to the Nike website, before clicking on a button on the site to share their performances via email or on social media (ah… your good old MySpace profile page). Myself, preferring to live inside an alt-running-reality, I threw the Nike shoes and the sensor away. Nevertheless, this technology remains an example of IoT: A sensor that sends data to a server (today: the cloud), data that can then be shared online through multiple outlets.

Eight years later, IoT sensors are much more sophisticated. They actually are so potent that highly sophisticated industries use them widely to measure temperature, proximity, pressure, water quality, chemicals, gas, and smoke among other elements. There are also infrared sensors, level sensors, image sensors, detection sensors, accelerometer sensors, gyroscope sensors, humidity, sensors, optical sensors… In those examples, we refer to IIoT, or “Industrial Internet of Things.” And the data they collect can be stored inside a Blockchain network.

How IIoT Leverages Blockchain… and Vice-Versa?

Businesses take advantage of IIoT to make their processes more efficient. One immense benefit that IIoT offers manufacturers and industrialists is the ability to monitor and automate highly complex industrial processes.

Can you picture what oil refineries look like? They are gigantic industrial complexes. Well, by placing sensors wherever they are required, it is now possible to monitor in real-time all that’s going on throughout the oil refinery process and be alerted as soon as an anomaly occurs, even if it’s inside the most remote and hardly accessible location. But, naturally, the benefits of using IIoT are not solely limited to levels monitoring and whether the attribute measured falls within acceptable range. IIoT sensors can be placed at all stages of, for example, a production cycle and therefore provide crucial data throughout the process. The information received in real-time can then be utilized to optimize the cycle itself by applying the proper adjustments. And what about logistics and supply chain? IIoT sensors can provide access to supply chain information in real-time by tracking products, as they move through the supply chain.

Now, should IIoT leverage Blockchain? Well, it depends… It depends on the utilization of the measure itself. If it’s about storing data for analysis, a Blockchain network isn’t required. A cloud-based solution plus a solid data mining solution are sufficient. However, if the data the IIoT sensor sends out is used to trigger a transaction, then it makes complete sense to leverage Blockchain, especially if the transaction stems from the execution of a smart contract. For example, Ondiflo is developing a solution that leverages IIoT and Blockchain to disrupt the Oil and Gas industry. One use case pertains to upstream operations, more precisely to water hauling. The idea is to put IIoT sensors inside water tanks located on oilfields, and once the water reaches a predetermined level, it means it’s either time to empty the tank or fill it up. The IIoT sensor sends the data to a transmission box that pushes the information to a cloud, which in turns feeds the Blockchain network and triggers a smart contract, letting all stakeholders know it’s time to send a truck to either fill up or empty the tank. Naturally, I just vulgarized the process for convenience purpose. Nevertheless, it is a perfect example of how IIoT and Blockchain can be leveraged to streamline an otherwise manual and lengthy process. Now, the IIoT sensor can collect and send additional measures, such as water temperature and/or pH. But if those two pieces of information play no role in the triggering of a smart contract, then there’s no reason to store them in a Blockchain. Thus, they can be moved to a cloud for analysis purpose.

IIoT and Security Issues

Last Sunday, I woke up to the following news headline: “Hackers stole a casino's high-roller database through a thermometer in the lobby fish tank.” Yes, a casino was hacked through the IoT sensor placed inside the thermometer in its lobby aquarium. What is the commonality between this thermometer located inside a fish tank somewhere in the United Kingdom and the server that stores the sensor’s data, which I assume lies inside a Level 5 facility near the Polar Circle in Northern Scandinavia?

By definition, “the cloud is a centralized architecture” and “one of its advantages is that the information it stores can be accessed on any device thanks to an Internet connection.”

So here comes the dreadful equation: Centralized Architecture + Online Access = Highly Prone to Hacking. And whichever device will do, including an IoT sensor placed in a thermometer inside a fish tank. The IoT sensor talks to the same centralized architecture that stores a database of casino high-rollers. So, compromising the sensor opens the door to the entire data repository.

Question: Is there today a level of security that would prevent compromising an IIoT sensor? Between you and me, don’t believe those who say, “Oh sure!” I actually asked the question to the CEO of an oil refinery at a conference earlier this year. And since he did a great job at avoiding answering me, I asked him the question again… and his inability to deliver an honest response was not only staggering but extremely informative: There is none. If you’re now suddenly overwhelmed with anxiety thinking of the oil refinery or the nuclear plant that’s located a few miles up the road from your house, thanks to which you were able to buy your piece of real-estate property at below market price (while believing your business sense was the sole reason for striking the deal of a lifetime), well yes, you’re fully entitled to your anxiety.

Blockchain in its permissioned version (also known as “private”) is deemed incorruptible, because the cost/benefit ratio of trying to compromise one single node is highly discouraging. But the data stored inside a Blockchain network that is fed by a cloud is as good as the data itself. In other words, a data that was compromised upstream and then stored inside a Blockchain node will then be recorded by all the other nodes, and there will be no way of raising a red flag. It’s only when a data that’s already stored inside a blockchain node gets corrupted that the other nodes can’t reconcile the information and a red flag is raised.

So, what is the current solution? Prior to being pushed to a cloud, the data an IIoT sensor shares transits through a transmission box. And this box gets to validate the data if it fits within a pre-determined range. For example, a 32-degree Fahrenheit temperature inherent to the wet storage of nuclear fuel would be rejected, simply because it just wouldn’t make any sense. But what if hackers were to compromise the pre-determined range…?

IIoT and Blockchain: It’s Complicated

There is at the moment no ideal situation. IIoT sensors are vulnerable. And their vulnerability can certainly compromise the validity of the elements they measure. Remember what I wrote a few weeks ago. When it’s about the cloud, hackers are always one step ahead. So, could it be possible that IIoT sensors and the data they measure and push out actually be a Blockchain network’s Achille’s?