SYS-CON MEDIA Authors: Pat Romanski, Gary Arora, Zakia Bouachraoui, Yeshim Deniz, Liz McMillan

Article

Smart Things -  Fintech, Blockchain and the Internet of Things

It's Next Generation is Smarter with Fintech, Blockchain and the Internet of Things

If the rooms had ears and the furniture had mouths … oh, how would they slander about our habits behind our backs?

Well, they can already talk to us for once: Voice-controlled assistant devices like Alexa and Siri inhabit our private spaces just now. And we can easily picture them having a conversation with each other, too (even though it would be a funny one for sure). But what if our clock radio told our food processor to get that smoothie ready, for we are about to leave for work? Or what if our watch told our bathtub to run us a remedial bath because we’re leaving our workplace with first stirrings of a common cold? And think of a fridge, buying food articles once it runs out of them, using its own eWallet…

That’s where we enter the domain of the Internet of Things.

What is the Internet of Things?

Put simple, the IoT or Internet of Things is a network of everyday devices, which are interconnected via WiFi access. Those devices — which can be anything from cars to coffee makers, from streetlights to shower cabinets — communicate and share data to complement each other in smart ways.

More importantly though: They are not mainly dependent on our input anymore. Modern IoT-capable devices use sensors to monitor and analyze routines and proceedings (and our habits) around them, evaluating them via algorithms. Once the device senses a need for its services, it takes appropriate measures. And as it’s exchanging information with other devices in the cloud, the incentive to act can come from outside.

It can come from far outside, that is: The Internet of Things is not limited to the user’s own four walls. Many Smart Homes added together make Smart Cities.

The possibilities of the Internet of Things are endless, basic examples include:

  • Our alarm clock rings in the morning while sending information to other devices in the house. The roller blinds react and open. Our food processor in the kitchen starts cooking breakfast. The bathroom heating system warms up.
  • The traffic lights receive data from our smart car and all the other cars frequenting the nearby streets, as well as the pedestrian’s smartphones. It knows when to go green or red to keep traffic flowing smoothly. No need to press a button at the crosswalk, the lights sense when someone is waiting.
  • Factories and facilities analyze the production and the need for energy and water, transferring this information to power plants and waterworks. They distribute their provision accordingly.
  • Restaurants we enter already await us with our favorite appetizer on the house, based on data we allowed our fridge to send to them. The bill goes directly to our smart watch, the eWallet software on there provides the funds to settle it.

The dimensions of today’s Internet of Things are already significant: By now, the IoT devices in use outnumber the world’s population. Analysts at Gartner are certain, that in the year 2020 a network of more than 20 billion devices will cater to our needs, down to the most basic household items.

IoT and FinTech

International corporations like Amazon, Bosch, Samsung and GE already invest in the IoT vision — with vibrant start-ups on their heels or even one step ahead. Now, traditional financial institutions as well as upstart fintech companies jump on the bandwagon.

It’s clear why they do it: Customers are placing more and more value on user experience and convenience. And many future applications of the Internet of Things require integration of financial services. Smart fridges for example, that automatically order food once it runs short, or parking spaces, whose fees are paid for by our smart cars, need to be connected to their owner’s bank account. Enhancing the basic payment applications coming with the device, branded apps by banking institutions could attract customers with high-security eWallets offering more payment options, additional privacy settings and even loyalty programs.

With the commencement of PSD2 (Payment Services Directive), the legal foundation has been laid for third parties requesting account data, should customers agree with it — a prerequisite for IoT and Fintech startups challenging traditional banks. It’s clear: The big institutions must react now.

Consequently, banking would no longer occupy a different space than living — it would take place at home, linked to natural, everyday actions. Looking at the rise of internet shops and online banking, we can argue, that future customers won’t leave their homes for banking if they don’t absolutely have to. Convenience is king, and the institute providing the most convenient user experience in IoT transactions leads the way.

And even when customers are outside their own four walls, the Internet of Things is within arms reach. IoT banking services make their lives easier. ATM machines give out money to them without the need for input. Long waiting times at the counter will be a thing of the past — the bank already knows, when you’re coming along and shifts customers in line to guarantee quick service.

And as your credit card is connected to your phone and your household, it will be a lot harder for fraudsters to steal your identity: Shouldn’t there be the signal of the car or the washing machine of that user account nearby? Access denied!

eWallets, Blockchain and the Internet of Things

The Internet of Things is already growing around us, adding new smart devices to its massive IoT ecosystem by the day. Physical wallets start to look antiquated — except as containers for our driver’s licence and credit cards. Contactless Payment, powered by Near Field Communication, is likely to become the standard way how we conduct business. In Europe nearly half of all consumers already rely on eWallet payment methods, says Statista. In the future we might not even need smartphones, laptops or tablets anymore: Wearables like smart watches or wristbands — and implanted microchips, for that matter — interact with Bluetooth beacons or WiFi access points to complete payments. Versatile eWallet technology will be a crucial element of the Internet of Things.

In regard to security, eWallet providers face great challenges. IoT networks allow interaction with user accounts and sensible bank data through everyday devices — cyber-criminals will not wait to jump at the opportunity. Any IoT eWallet worth the name will have to raise effective barriers against fraud and tampering. The designs and applications of IoT devices are manifold and in some cases depend on very delicate user data (think health technology). Providers of eWallets have to adapt the security strategies of their payment software accordingly.

A solution, that holds big promises for the Internet of Things in regard to security is blockchain. Blockchain was originally developed as an integral part of the cryptocurrency model. It is a distributed ledger technology, there is no central instance or data storage. A blockchain is a continuously growing record of so-called blocks, containing sets of transactions. All blocks contain a timestamp and a hash pointer linked to the previous block. As such, they are public and can be tracked down to the very first so-called “genesis block”, the first transaction made in the chain. However, blocks don’t give away the identities of the purchasing and receiving parties in a transaction.

Blocks, the sets of transactions, must be validated, before they are added to a blockchain. This is done via a specific cryptographical procedure. Each block poses a unique mathematical problem, a nonce. All peers in the blockchain system compete to solve this nonce with their CPU in a trial and error process. This process is called mining and peers working to solve the puzzles are called miners, accordingly. Once a miner discovers the right solution for the mathematical problem, it announces the validation to the network. The block is then added to the blockchain. Thus, validation is a decentralized process, that’s very difficult if not impossible to elude. The blockchain is public, so tampering with a block would be apparent, as all peers have deviating records.

Blockchain Flaws and New Challengers

Experts are certain that blockchain technology will gather pace this year as part of IoT development. Some of them raise the subject of limitations. For example, adding a new block to the bitcoin blockchain currently takes about 10 minutes. Furthermore mining nodes requires vast amounts of electricity and CPU to verify blocks.

But new blockchain-based or blockchain-inspired solutions for known problems are around the corner. One example would be the Tangle ledger of IOTA: It takes blockchain principles to the next level, banking on a system protocol with different manner of processing. Tangle, a “blockless” distributed ledger, allows the parallel and simultaneous verification of transactions, as opposed to a “one block at a time” model. With IOTA, a cryptocurrency geared towards Internet of Things usage, the Tangle technology is making up for the shortcomings of blockchain.

What’s next?

Performance concerns regarding blockchain will continue to occupy the industry in 2018. But there are a few other trends and issues affecting eWallets and the Internet of Things to look out for. First and foremost, usage of data will be a big topic: Given that sensors in IoT devices constantly draw data from their surroundings, it’s vital to implement functional systems for data analyzation. Accordingly, data infrastructure automation will be a deal-maker for companies focussed on the Internet of Things — artificial intelligence is a buzzword here. Looking at the sheer amount of data transferred, edge networking solutions for difficult environments will be in high demand, too. In regard to these requirements, As-a-service software providers can expect a good business year.

And that’s just the tip of the iceberg in an ocean of innovations the Internet of Things holds for us. During the few years, our contact with online services is bound to change.

Source: Medium

More Stories By Ram Sonagara

Ram Sonagara works at Transparency Market Research. TMR is a market intelligence company providing global business research reports and consulting services.

Latest Stories
Every organization is facing their own Digital Transformation as they attempt to stay ahead of the competition, or worse, just keep up. Each new opportunity, whether embracing machine learning, IoT, or a cloud migration, seems to bring new development, deployment, and management models. The results are more diverse and federated computing models than any time in our history.
On-premise or off, you have powerful tools available to maximize the value of your infrastructure and you demand more visibility and operational control. Fortunately, data center management tools keep a vigil on memory contestation, power, thermal consumption, server health, and utilization, allowing better control no matter your cloud's shape. In this session, learn how Intel software tools enable real-time monitoring and precise management to lower operational costs and optimize infrastructure...
"Calligo is a cloud service provider with data privacy at the heart of what we do. We are a typical Infrastructure as a Service cloud provider but it's been designed around data privacy," explained Julian Box, CEO and co-founder of Calligo, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Isomorphic Software is the global leader in high-end, web-based business applications. We develop, market, and support the SmartClient & Smart GWT HTML5/Ajax platform, combining the productivity and performance of traditional desktop software with the simplicity and reach of the open web. With staff in 10 timezones, Isomorphic provides a global network of services related to our technology, with offerings ranging from turnkey application development to SLA-backed enterprise support. Leadin...
While a hybrid cloud can ease that transition, designing and deploy that hybrid cloud still offers challenges for organizations concerned about lack of available cloud skillsets within their organization. Managed service providers offer a unique opportunity to fill those gaps and get organizations of all sizes on a hybrid cloud that meets their comfort level, while delivering enhanced benefits for cost, efficiency, agility, mobility, and elasticity.
DevOps has long focused on reinventing the SDLC (e.g. with CI/CD, ARA, pipeline automation etc.), while reinvention of IT Ops has lagged. However, new approaches like Site Reliability Engineering, Observability, Containerization, Operations Analytics, and ML/AI are driving a resurgence of IT Ops. In this session our expert panel will focus on how these new ideas are [putting the Ops back in DevOps orbringing modern IT Ops to DevOps].
Darktrace is the world's leading AI company for cyber security. Created by mathematicians from the University of Cambridge, Darktrace's Enterprise Immune System is the first non-consumer application of machine learning to work at scale, across all network types, from physical, virtualized, and cloud, through to IoT and industrial control systems. Installed as a self-configuring cyber defense platform, Darktrace continuously learns what is ‘normal' for all devices and users, updating its understa...
Enterprises are striving to become digital businesses for differentiated innovation and customer-centricity. Traditionally, they focused on digitizing processes and paper workflow. To be a disruptor and compete against new players, they need to gain insight into business data and innovate at scale. Cloud and cognitive technologies can help them leverage hidden data in SAP/ERP systems to fuel their businesses to accelerate digital transformation success.
Concerns about security, downtime and latency, budgets, and general unfamiliarity with cloud technologies continue to create hesitation for many organizations that truly need to be developing a cloud strategy. Hybrid cloud solutions are helping to elevate those concerns by enabling the combination or orchestration of two or more platforms, including on-premise infrastructure, private clouds and/or third-party, public cloud services. This gives organizations more comfort to begin their digital tr...
Most organizations are awash today in data and IT systems, yet they're still struggling mightily to use these invaluable assets to meet the rising demand for new digital solutions and customer experiences that drive innovation and growth. What's lacking are potent and effective ways to rapidly combine together on-premises IT and the numerous commercial clouds that the average organization has in place today into effective new business solutions.
Keeping an application running at scale can be a daunting task. When do you need to add more capacity? Larger databases? Additional servers? These questions get harder as the complexity of your application grows. Microservice based architectures and cloud-based dynamic infrastructures are technologies that help you keep your application running with high availability, even during times of extreme scaling. But real cloud success, at scale, requires much more than a basic lift-and-shift migrati...
David Friend is the co-founder and CEO of Wasabi, the hot cloud storage company that delivers fast, low-cost, and reliable cloud storage. Prior to Wasabi, David co-founded Carbonite, one of the world's leading cloud backup companies. A successful tech entrepreneur for more than 30 years, David got his start at ARP Instruments, a manufacturer of synthesizers for rock bands, where he worked with leading musicians of the day like Stevie Wonder, Pete Townsend of The Who, and Led Zeppelin. David has ...
Darktrace is the world's leading AI company for cyber security. Created by mathematicians from the University of Cambridge, Darktrace's Enterprise Immune System is the first non-consumer application of machine learning to work at scale, across all network types, from physical, virtualized, and cloud, through to IoT and industrial control systems. Installed as a self-configuring cyber defense platform, Darktrace continuously learns what is ‘normal' for all devices and users, updating its understa...
Dion Hinchcliffe is an internationally recognized digital expert, bestselling book author, frequent keynote speaker, analyst, futurist, and transformation expert based in Washington, DC. He is currently Chief Strategy Officer at the industry-leading digital strategy and online community solutions firm, 7Summits.
Addteq is a leader in providing business solutions to Enterprise clients. Addteq has been in the business for more than 10 years. Through the use of DevOps automation, Addteq strives on creating innovative solutions to solve business processes. Clients depend on Addteq to modernize the software delivery process by providing Atlassian solutions, create custom add-ons, conduct training, offer hosting, perform DevOps services, and provide overall support services.