pIoT Chain I II IoT Chain Contents Chapter I Project Background ........................................................................................ 1 1. nbsp; What is IoT ........................................................................................................ 1 2. nbsp; Market scale of IoT ............................................................................................. 1 3. nbsp; Challenges ............................................................................................................ 4 4. nbsp; Solutions ............................................................................................................... 6 Chapter II Project Exposition ......................................................................................... 9 1. nbsp; Brief introduction ................................................................................................ 9 2. Technical architecture ........................................................................................... 9 3. Our Architecture ................................................................................................. 16 4. Product planning ................................................................................................. 17 5. nbsp; Cooperative partners ........................................................................................ 19 Chapter III Team Members .......................................................................................... 23 【 Core Team】 nbsp;........................................................................................................ 23 【 Consultant Team】 nbsp;.............................................................................................. 24 References ....................................................................................................................... 26 1 IoT Chain Chapter I Project Background 1. nbsp; What is IoT Based on internet, traditional telecommunication network and other ination carriers, IoT Internet of Things is the network that enables interconnection between all ordinary physical objects which can be located independently. IoT has three key features the equalization of ordinary objects, interconnection of automatic-management terminals and intellectualization of pervasive services. Through IoT, all the things can be connected to the internet for ination exchange and communication to realize intellectualized recognition, location, tracking, monitoring and management. There are two implications of IoT. First, internet is still the core and foundation of IoT, which is extended and expanded on the er. Second, the user-end of IoT has extended to ination exchange and communication between all things, namely the thing to thing interconnectivity. IoT has been applied widely in network convergence by means of communication perceptive technologies such as intelligent perception, recognition and pervasive computing. Therefore, IoT has been called the third wave of the world’s ination industry development following the computer and internet. Since IoT is an expansion of internet, it should be referred as business and application rather than network. nbsp;Hence, innovation of application is the core of IoT’s development and creation centered on user experience is the soul. 2. nbsp; Market scale of IoT Since the development policies of IoT were brought up by America, European Union and China in 2009, IoT has been developing with a fast pace. Traditional enterprises and IT magnates have all made efforts to take part in IoT, which has penetrated rapidly into many fields, such as manufacturing industry, retail industry, service industry and public utilities. Now, the IoT is on the eve of explosive growth on a large scale. According to 2016 China IoT’s Market Scale and Development Trend issued by nbsp;Wulian nbsp;Zhongguo, the global IoT market scale reached 62.4 billion dollars in 2016, with a year-on-year growth of 29. In 2018, the figure is expected 2 IoT Chain to reach 103.6 billion dollars. From 2013 to 2018, the compound growth rate will be 21 and the number of newly-increased IoT devices will rise from 1.691 billion in 2015 to 3.054 billion in 2019 See Figure 1. Figure1 2013-2018 Global IoT Market Scale and Growth Rate More and more articles and devices are being connected to IoT. According to Gartner, though the world’s population is 7.5 billion, the number of global IoT devices will increase from 6.4 billion in 2016 to 8.4 billion in 2017, with a 31 growth rate. The number of IoT devices will exceed the sum total of PC, tablet PC and smart phones in 2018 and reach 20.4 billion in 2020 See Figure 2. Figure 2 2014-2016 Global IoT Market Scale and Growth rate 3 IoT Chain According to IHS Markit, most articles will be intellectualized by 2025. In the future, everything will be interconnected, from a cup to a house, and IoT will spread across every aspect of our life See Figure 3. Figure 3 Application fields of IoT In 2016, the whole world’s expenditure on IoT technical products and services enterprises has reached 120 billion dollars and this number will increase to 253 billion dollars in 2021 with 16 annual growth rate, among which the pure IoT technical services expenditure will reach 143 billion dollars with 17 annual growth rate. Based on assumption of nbsp;20 annual growth rate, Asia will have the fastest growth and take up around 35 of worldwide IoT expenditure in 2021.4 IoT Chain 3. nbsp; Challenge Challenge 1 Traditional attack techniques damage IoT devices wantonly 【 Challenge】 The Botnets of Things created by Mirai was entitled as one of the Ten Breakthrough Technologies in 2107 by MIT Technology Review. According to the statistics, the Botnets of Things have infected more than 2 million IoT devices, for example, the cameras. The DDos attack launched by this made the network of American DNS service provider Dyn break down and users could not visit several popular websites such as Twitter and Paypal during a short period. Afterwards, more botnets appeared, including the one that hijacked the IoT devices to mine Bitcoins and the http81, which has larger scale and is more active. Centralized management structure cannot prove its innocence and individual private data leak has happened occasionally. For example, in May, 2017, People’s Daily Online once reported that 266 cameras in Chengdu were enforced for webcast. At present, the security model based on closed source often called “security through obscurity” has exposed its potential safety hazards and will be abandoned gradually and be replaced by a new security model, “security through publicity”. To realize this, it is necessary to upgrade the model to open source software. Though the current open source nbsp;systems nbsp;are nbsp;still nbsp;vulnerable nbsp;to nbsp;accidents nbsp;and nbsp;are nbsp;of nbsp;low availability, they are less prone to government interference and other targeted attacks. Therefore, the open source systems will play an important role in home automation as well as networking of vehicles and other devices. 【 Solution】 IoT Chain ITC has adopted the asymmetrical encryption. As long as the private key is kept properly, the data cannot be cracked even if it’s collected. At the same time, all the nodes in ITC are equal, which protects the users’ privacy. Moreover, nbsp;based nbsp;on nbsp;the nbsp;character nbsp;that nbsp;block nbsp;chain nbsp;cannot nbsp;be nbsp;tampered, nbsp;the manufacturers and service providers won’t be able to tamper users’ any ination.5 IoT Chain Challenge 2 High cost of centralized architecture 【 Challenge】 Before the revenue of IoT reaches market expectation, the costs of IoT are still extremely high. Most exiting IoT solutions require huge investments nbsp;apart from the commission for intermediaries of these services, building and maintaining the infrastructure related to centralized cloud and large-scale server cluster are very expensive as well. Unfortunately, current IoT solutions fail to match the service supply and customer’s expectation. In the past, the cost and revenue of IT industry were always consistent. For the large-scale server, during its long lifespan, it will receive long-term service since the manufactures and the buyers have signed support contract. For personal computer and smartphones, though there is no high-profit support plan, this won’t be a big problem because of their short lifespan. But for IoT, the equipment manufacture enterprises don’t have enough profits to make up the money for supporting and maintaining the equipment for a long period. Meanwhile, it will cost numerous money to serve hundreds of billions of smart devices, let alone the high maintenance fees of centralized server for distributing and updating software. The operating costs of WeChat servers for 600 million users have reached above 300 million Yuan per month. Now there are 4.9 billion devices online, the annual operating costs of servers will be 29.4 billion Yuan and the number is still increasing rapidly every year. 【 Solution】 The future ITC shall have tens of thousands of nodes and they will be absolutely adequate to meet the needs of IoT data storage with a combination of blockchain’s distributed ledger technology. And thanks to the de-centralization of blockchain, there is no need for highly-intensive computer cluster. Both technologies have dramatically reduced the operating and maintaining costs of the whole IoT. nbsp;6 IoT Chain 4. nbsp; Solutions 1 The concept of blockchain Blockchain is an important concept introduced with Bitcoin and its essence is a decentralized database. In a narrow sense, blockchain is a sort of chain-data structure where data blocks are linked in accordance with time sequence. It is also a distributed ledger which cannot be tampered or counterfeited under the protection of cryptology s. In a broad sense, blockchain technology is a brand new distributed infrastructure nbsp;and nbsp;computing nbsp;paradigm nbsp;which nbsp;uses nbsp;chain-data structure nbsp;to nbsp;verify nbsp;and nbsp;store nbsp;data, nbsp;uses nbsp;distributed nbsp;node nbsp;consensus nbsp;algorithm nbsp;to generate and update data, uses cryptology s to guarantee the safety of data transmission as well as data access and uses smart contract composed of automatic script code to program and operate data. In a more colloquial way, blockchain technology enables everyone to take part in the bookkeeping. There is a database behind every system and if we regard the database as a large ledger, the person in charge of bookkeeping is quite important. Under current technical situation, the person who owns the system is responsible for the bookkeeping. For example, Tencent is in charge of the bookkeeping of WeChat and Alibaba is in charge of Taobao. In the blockchain system, everyone will have chance to involve in the bookkeeping process. During a certain period of time, if there is any change in data, everyone in the system can participate in bookkeeping. The system will select the fastest and the most qualified user to write his record on the ledger and then distribute the updated ledger copies to other users in the system as backup. Therefore, everyone in the system will have a complete ledger. This kind of bookkeeping is called the blockchain technology. 2 The advantages of blockchain technology The idea of everyone in charge of bookkeeping has brought obvious advantages 1. nbsp; High security The basic architecture of blockchain is immune to traditional internet attacks. The feature of IoT’s ination encryption and secure communication is security through publicity, and this will help protect users’ 7 IoT Chain privacy. Management of identity access and multi-party consensus will contribute to the recognition of misbehaving nodes and prevent malicious nodes from accessing or destroying the network. The structure based on chain data will be conducive to building electronic evidence which can be testified and traced. 2. nbsp; Low costs nbsp;The features of decentralization, multi-centers and weakening centralization will reduce the operation cost of centralized architecture. 3 The barriers to blockchain application Objectively speaking, although blockchain has many distinctive merits, there are still quite a few barriers to its widespread application. Let’s take Bitcoin as an example 1. Resource consumption Bitcoin’s POW Proof of Work is consensus mechanism with high resource consumption, while most IoT devices have problems like low computing ability and network capability as well as short battery life. 2. nbsp; Data expansion With the growth of blockchain, can IoT devices provide enough storage capacity Until now, Bitcoin needs 100 G physical storage space and the number keeps increasing. If the blockchain technology were widely used, the demand for storage space would be enormous. 3. nbsp; Perance bottleneck The limit speed of traditional Bitcoin trade is 7 transactions per second and it will take about one hour to write in the blockchain plus the time for consensus confirmation. This will lead to feedback and warning delay, which are infeasible for delay-sensitive industrial IoT. 4. nbsp; Partition tolerance The industrial IoT emphasizes that the nodes should be “always online” but it happens all the time that ordinary IoT node fail and rejoin the network back and forth. This will generate network shocks which consume a lot of network bandwidth and even cause “network partition” 8 IoT Chain All the above problems are not obvious when the blockchain is used on a small scale, but they will be big headache in large-scale applications. How can we solve these problems 9 IoT Chain Chapter II Project Exposition 1. nbsp; Brief introduction Due to the centralization design of traditional IoT architecture, the users’ behavioral data is stored in the center servers controlled by merchants. Thus, the users’ data is prone to be leaked out and the users’ privacy as well as safety will face severe threats. The blockchain has provided decentralized ideas and technology, which are very suitable for the self-service, self-maintenance, self-transactions and shares between machines in IoT industry [1]. But there are still some key problems to be solved when applying the blockchain technology in IoT, such as the of consensus, quick pay on small amount and protection of data privacy. For these problems, IoT has brought up its own solutions, including PBFT, SPV, DAG, CPS cluster technology, big-data-analysis smart contract ChainCode and so on. ITC adopts nbsp;the nbsp;main nbsp;chain nbsp;of nbsp;PBFT nbsp;consensus, nbsp;the nbsp;DAG nbsp;network, nbsp;which supports high perance by nature, as side chain and the multi-tier architecture to build an IoT operating system which is safe, decentralized and can support high concurrency. 2. Technical architecture 1 PBFT One of the core problems of Blockchain is establishing consensus between nodes. Different consensus algorithms will create different perance. ITC applies PBFT consensus algorithm to achiev/p