smart contracts, enable decentralized ledgers to act on data that they receive
Imagine all of the technology we use on a daily basis, (cell phones, microwaves, cars, laptops, washers, dryers etc) has an onboard computer, that tracks when it is used and where it is.
IoT = Internet of Things
These IoT devices begin building a ledger of information that is processed into a string of data that is hashed (secured) by the onboard computer and then added to the decentralized ledger (Blockchain DB).
When the device is connected to the network it uploads the data to the decentralized ledger of its other connected devices. Each device stores a complete copy of the data, so that it can continually verifiy its own transactions within the network.
The data itself becomes the record of transaction that creates the information that could be used for billing, maintenance and service.
If a company wants to invest in blockchain technology, they would first have to start with building ledger that allowed their hardware to communicate with each other on a decentralized network. If that ledger was built with a smart contract function, then simple automation becomes possible. If that ledger contains a computer then extensive automation becomes possible.
- Bitcoin was a decentralized ledger.
- Ethereum was a decentralized ledger with a smart contract (ability to perform functions based on the data inside the ledger).
- IOTA is a decentralized ledger, that has computer built into the code, that can be interfaced into any machine. (it can perform many smart contract functions as well as give your cell phone an operating system).
Now at least when I hear the term blockchain I can at assign some value of applicable technology. The noise generated from Blockchain promo makes it really hard for anyone to truly understand the solutions Blockchain technology can deliver. What I have described here is also referenced by the industry as Industry 4.0 / IOT