Hedera Hashgraph is a next-generation distributed public ledger organization. The company has joined the Trusted IoT Alliance, which is an open source software consortium that aims to create a secure, scalable, interoperable, and trusted Internet of Things .
Hedera will work with Fortune 500 companies and startup members to leverage the hashgraph consensus algorithm to secure and scale Internet of Things ecosystems. This will include developing standards, certification, technical advancements, and business opportunities.
To find out more, Digital Journal caught up with Paul Madsen, Hedera Hashgraph’s Technical Architect.
Digital Journal: How important is the Internet of Things going to be for business?
Paul Madsen: The number of Internet connected devices worldwide is expected to grow from 23 billion this year, to 75 billion by 2025. And these are not just consumer devices. Industrial sensors, advanced RFID tags, beacons, in-store analysis and connected manufacturing machines have already made it to the market, and are dramatically changing the way organizations think about their supply chain and how it can communicate.
DJ: What are some of the concerns that businesses have?
Madsen: Businesses need ways to have accountability for the billions of devices that are going to enter the market in the coming years. They need to essentially have a ‘virtual twin’ for every device in their ecosystem, so they know their footprint, areas of risk/vulnerability, cost modeling, etc.
They also want to take advantage of the benefits of IoT, which holds promise in giving them unprecedented visibility and accountability across their supply chain.
DJ: What are the advantages of distributed public ledgers?
Madsen:Distributed public ledgers hold great promise for providing visibility, security and accountability across any set of devices that needs to communicate, but doesn’t necessarily know or trust every other device in the ecosystem. To date, adoption has been stymied by the technical challenges of first generation ledgers (blockchain) around speed, security, and fairness. But if distributed ledgers could conduct transactions as fast or faster than the VISA network, and charge a fraction of a penny per transaction, then they become practical for the scale and speed of IoT.
DJ: Which types of businesses are most likely to use such technology?
Madsen:We already see companies in manufacturing, finance, healthcare, technology, publishing/media, gaming, real estate and other asset management, and critical infrastructure showing an interest in this technology. Any company that wants to bring visibility and transparency to their ecosystem, and wants to do so at high volume and velocity, and low cost, is paying attention to what’s happening in this space.
DJ: What is the Hedera Hashgraph business model?
Madsen:The Hedera hashgraph platform provides a new form of distributed consensus; a way for people who don’t know or trust each other to securely collaborate and transact online without the need for a trusted intermediary. The platform is lightning fast, provides the best level of security possible in a distributed consensus algorithm, is fair, and, unlike some blockchain-based platforms, doesn’t require compute-heavy proof-of-work. Hedera enables and empowers developers to build an entirely new class of distributed applications never before possible.
Users pay fees to use the platform services such as storage, micro payments, and smart contracts. The collected fees go to nodes that are compensated for the CPU cycles, bandwidth, and storage that they contribute to the network. Because the Hedera network has high throughput and doesn’t require proof-of-work, we anticipate the fees to be a small fraction of other public platforms in the market today.
DJ: Which companies do you work with?
Madsen: We work with companies across various industries which want to apply the power of a public distributed ledger to existing or emerging challenges they face. A handful of examples include: MZ (formerly Machine Zone), a multi-billion dollar gaming company building smart-city AI; CULedger, a consortium of North American credit unions building a cross-border payments platform; and Artbit, a music industry project from Matt Sorum (Guns N Roses).
DJ: Why have you joined the Trusted IoT Alliance?
Madsen:We joined the Trusted IoT Alliance at the behest of some of their large, enterprise members. Our membership will allow industry leaders across various segments to leverage Hedera’s Hashgraph technology as a crucial part of their IoT strategy moving forward. We are excited to be working with these thought leaders and technology firms to develop an interoperable, enterprise-grade IoT ecosystem that is fast, fair and secure.
DJ: Are new standards and certification needed in this area?
Madsen:Yes, we believe that in order for all of these devices to effectively communicate with one another, and deliver on the efficiency, visibility and speed promises that they hold, we will need standards and certifications for communication across devices, verification of device identities and status, and ultimately trust of and between devices.
