DLT

DLT for the

internet of
things
industry

A report on the integration and

application of Distributed Ledger
Technology in the Internet of Things
Industry.
An Industry Ripe for Disruption
As Distributed Ledger Technology begins to permeate operations, services, businesses and entire markets globally, it’s
becoming increasingly apparent that it will be a catalyst for change in the Mechanical Engineering sector too.

DLT holds the promise to positively transform the way business is The Industry Today

conducted, from the almost negligible day-to-day processes to The mechanical engineering industry is often referred to as being

the overhauling of entire industries. A foundational-level paradigm ripe for disruption, yet in comparison to other industries, it has been

shift comparable to the dawn of the internet is underway, and the relatively slow to embrace change. Practical barriers, heavy

collective potential of blockchain, smart-contracts and DAG regulation, and complexity of work are some of the issues holding

ledgers is at the heart of it. The transformational potential of this the Mechanical Engineering industry back - but the tide is turning.

technology in the Mechanical Engineering sector is being Modern technologies like DLT and IoT have started to have an

thoroughly tested and explored. impact on the industry. Just like the advent of the Internet,

Distributed Ledger Technology is now being hailed as an innovation

that will completely change how businesses conduct trade. By

In its simplest terms, a distributed ledger is a record of information embracing DLT, the Mechanical Engineering industry is poised to

that is shared across a network. Think of it as a database that can see fundamental disruption similar to what is currently underway in

be used to record transactions across different locations. It can be other fields. DLT will drive down production costs and deliver greater

programmed to be publicly accessible, or to be restricted to a operational efficiencies, ultimately unleashing new business

specific group of users. Multiple sites, institutions, or geographies opportunities for manufacturers the world over.

can have their own identical copy of the ledger, changes to which, The software-defined manufacturing era is upon us. In the looming

once confirmed, are reflected in all copies. The fact that the data is token economy, the big winners will be companies that have

spread across a network of computers opens up a range of demonstrably better business and manufacturing processes, along

possibilities that were previously inconceivable when this data was with improved access to information that will help them identify and

stored in a single, centralized location. work with the best business partners. These are all areas where DLT

can have a strong, tangible effect on the industry - so it’s no surprise

The implementation of system which can virtually replace the need that it is causing huge excitement in this sector.

for trust underpins huge operational improvements for many

industries, while at the same time enabling more transparency in the

supply chain. For others, it adds a new layer for tamper-proof

exchange of value and information. For the Mechanical Engineering

Industry, it represents all of this, and more.

Distributed Immutable Secure Anonymous Programmable Unanimous Instant

Network Making records Records are The identity of Functionality can Network Fast settlement
participants share irreversible makes encrypted and can participants can be changed and participants achieve times reduces
responsibility to it impossible to include digital be kept either amended as consensus on friction and risk.
maintain the tamper with them. signatures. pseudonymous or needed. validity.
system. anonymous.
What effect will DLT have?

Distributed ledgers are empowering IoT devices to adopt new

forms of computerized interactions, allowing them to partake in

safe and reliable data exchanges. Security, trust, and identity are

the unlikely pillars upon which the Internet of Things is set to be

built on.

Companies can make use of the blockchain to manage data from

IoT edge devices, which can use DLT to validate or update

communication contracts. As an example, a connected asset can

share location and temperature information for a product that

In order to gauge how your organization could benefit from
moves along various points in a warehouse. This data can be
DLT, you may wish to start by understanding how the
updated on a blockchain, allowing all involved parties access to
technology can be applied, what its limits are and how it
the status of the package. The use of distributed ledgers also
can be tailored to your industry. Here are a few questions
makes it possible to bring transaction processing capabilities and
to ask before deciding on your DLT solution:
intelligence to devices everywhere.

That said, while executives across the industry are keen to
understand and apply DLT based solutions, they are unsure of
where to start, and which opportunities across the IoT value
chain are worth pursuing. Our broader research into the shift
towards the IoT space, and discussions with decision makers in
the industry has helped us identify a number of use cases for the
Internet of Things industry. This is by no means an exhaustive list,
but rather a general outline of what can be expected.
• How can a DLT based solution drive value in my
business?
• How can you tell whether DLT can improve an
operation or service?
• How can a DLT based solution create value?
• Do you have any operations which can be
enhanced or replaced by DLT?
• What are your competitors using DLT for?

• How are other industries applying DLT?

• What new business models does DLT enable?

DLT and the Internet of Things Industry
• Are there any new products/services that your
IoT has its own unique set of critical adaptability challenges with
company could offer by making use of DLT?
regards to distributed systems. Here we’ll briefly explore DLT use

cases and opportunities that address key issues facing the IoT

market. We’ll also describe and assess a range of opportunities

across the Internet of Things value chain.

Trust Building: With DLT, companies can design ecosystems of IoT Secure Reliability: Using blockchain for IoT can eliminate failure

devices that safely transact and communicate with one another. A points in networks, allowing for secure traceability. Distributed

device may be oblivious to other devices in the system, but its architectures, cryptographic signatures, smart contracts, identity

operations can be instantly authorized by confirming its past authentications, public and private permissions, are all factors that

exchanges on the blockchain and enable trust between them. strengthen security of Internet of Things connected devices.

Accelerated Data Exchanges: With the middle man eliminated Scaled Solutions: Decentralized technologies hold great promise

from the process, IoT devices have access to faster data transfers. for a system that needs to handle information from millions of

The lack of IoT gateway and other intermediate filtering hardware connected devices. They make it possible for a device in a network

make peer-to-peer contracts between devices possible, decreasing to maintain low latency, and high throughput.

the time required to complete the information exchange.

Cost Reduction: Since IoT edge devices have limited power to

spare, it is vital for them to reduce processing overhead from the

procedure. DLT allows vendors to remove any additional protocol,

hardware or communication overhead costs, allowing for direct,

streamlined communication.
Potential use cases for DLT in the IOT industry
Distributed ledgers hold the potential to standardize the Internet of Things, providing opportunities both at the device
and network levels. Below are a few scenarios that showcase how DLT can serve as the architecture for the future of
automation:

COMPLIANCE MONITORING

DLT brings transparency to product integrity, helping Process monitoring and maintenance is made simpler, as

organizations with compliance adherence, legal sourcing, multiple parties can track conditions by registering

and fair labor. This is a value that extends to both interactions to a shared ledger. Anomalies can be

businesses and consumers. identified and rectified immediately.

NETWORK MANAGEMENT AUTHENTICATION

Device reputation can be used as a method of security Verification takes on new dimensions with distributed

validation. Risk of network failure is also reduced, because ledgers. They allow users to authenticate copyright, IP,

the integrity of the system is no longer reliant on a single and design integrity.

node.

SUPPLY CHAIN TRANSACTIONS

Distributed ledgers open up the possibility of modernizing Distributed ledger technology serves as an immutable and

the supply chain. Funds can be released when goods are secure way to automate the exchange and settlement of

shipped and payments processed once products are an asset, from payments to negotiations and service

scanned into warehouse facilities. providing.

LOGISTICS ASSET SHARING

A DLT merger with IoT streamlines cargo management, Peer-to-peer economies that allow users to submit their
while also making it easy for companies to stay up to date own physical or digital assets, like a room for rent or online
with the tracking of goods. storage. Using smart contracts and a shared ledger, users

can receive tokens of compensation for rentals.

Challenges The Work Ahead

Distributed Ledger Technology is rapidly changing and evolving. DLT research is continuing in a number different directions, and

Different use cases are being mapped out, as parties decide on the several organizations have begun investing substantial amounts to

optimum way to make use of the technology. For this reason, it’s gain an advantage in what’s becoming a race to incorporate this

important to focus on, and clearly define, which mechanisms are revolutionary technology. For the short term, though, exploring

most relevant to your organization and your particular use cases. opportunities is the minimum required for most businesses. It is

important to understand how implementing solutions based on DLT

In certain situations, there may be scalability issues, particularly for can generate more commercial value for companies, and how they

businesses that require hundreds of thousands of transactions per align to overall business strategies.

second. Improvements are continually being made in this regard,

such as the use of DAG based ledgers over the traditional Many companies have begun exploring and testing use cases and

blockchain, although a lot of work remains. applications of DLT, and full enterprise adoption will ensue in the

near future. For decision makers, the task at hand is to identify

Finally, there are regulatory hurdles, too. Regulators are showing an where and how DLT can be used to improve their organizations.

increased interest in the technology. Industry groups are getting Having a strategic partner to help you through the process is the

together and consortiums are being formed, but the true signs of first step in harnessing the revolutionary potential of DLT for your

standardizations are yet to be seen. For Distributed Ledger business.

Technology to really thrive, it has to be functional, scalable and

accepted by regulators.
Contact us
Advanced Blockchain AG
Invalidenstrasse 112
10115 Berlin
Germany

www.advancedblockchain.com
info@advancedblockchhain.com

The information contained herein is of a general nature, and not

intended to address the particular circumstances of any particular individual or
entity. Although we do our best to provide accurate and timely
information, there can be no guarantee that such information will
continue to be accurate in the future. No one should act upon such
information without prior appropriate professional advice, and
thorough understanding of the particular situation.

© 2018 Advanced Blockchain AG