Blockchain and IoT – Com "Crypto" You’re probably going to be announcing Industry 4.0

While most people are just starting to learn about the “blockchain” because of Bitcoin, its roots and applications go far beyond that.

Blockchain is a technology in itself. It powers Bitcoin, and that’s essentially why * so many * new ICOs have flooded the market: creating an “ICO” is ridiculously easy (no barriers to entry).

The goal of the system is to create a decentralized database, which essentially means that instead of relying on “Google” or “Microsoft” to store data, a network of computers (usually operated by individuals) is capable of ‘act in the same way as a larger company.

To understand the implications of this (and therefore where technology could lead the industry), you need to look at how the system works at a fundamental level.

Created in 2008 (1 year before Bitcoin), it is an open source software solution. This means that your source code can be downloaded and edited by anyone. However, it should be noted that the central “repository” can only be modified by specific individuals (therefore, the “development” of the code is not basically free for everyone).

The system works with what is known as a merkle tree, a type of data graph that was created to provide access to versioned data in computer systems.

Merkle trees have been used with great effect in a number of other systems; especially “GIT” (source code management software). Without being too technical, it basically stores a “version” of a dataset. This version is numbered and therefore can be loaded at any time the user wants to recover the previous version. In the case of software development, it means that a set of source code can be updated on several systems.

The way it works, which is to store a huge “file” with updates to a central dataset, is basically what drives the “Bitcoin” types and all the other “cryptographic” systems. The term “crypto” simply means “cryptographic”, which is the technical term for “encryption”.

Regardless of its core operation, the real benefit of a wider “in-chain” adoption is almost certainly the “paradigm” it provides to the industry.

There has been an idea called “Industry 4.0” floating around for decades. Often combined with the “Internet of Things”, the idea is that a new layer of “stand-alone” machinery could be introduced to create even more effective manufacturing, distribution and delivery techniques for businesses and consumers. Although this has often been talked about, it has never been adopted.

Many experts are now looking at technology as a way to facilitate this change. The reason is that the interesting thing about “cryptography” is that, as Ethereum especially demonstrates, the different systems that are built on top of it can be programmed to work with a layer of logic.

This logic is really what IoT / Industry 4.0 has lost so far, and why many are looking for the “blockchain” (or equivalent) to provide a base-level standard for new ideas that will move forward. This standard will provide companies with the ability to create “decentralized” applications that allow intelligent machinery to create more flexible and efficient manufacturing processes.