Industrial IoT meets the blockchain with Xage

I don’t think I could make a hotter sounding startup at the end of 2017 than Xage (pronounced Zage). The company, which was founded in mid-2016, has redesigned security for the industrial internet of things using blockchain and other decentralized technologies. It combines industrial IoT, security and blockchain into a single startup that has raised capital from March Capital, the Hive and others. If you would like to better understand blockchain technology and how it relates to the world of cryptocurrencies, you might want to check out VanillaCrypto.com to begin learning the basics.

Xage’s core idea is that in an industrial setting there are too many sensors, computers and people communicating at any given point in time, so a centralized security architecture doesn’t make sense if information needs to travel quickly. The obvious solution for Xage’s founders was to use a distributed mechanism. In this case, Xage is using blockchain to track data requests across the system and an algorithm called Shamir’s Secret Sharing to scatter data and reconstruct it from the nodes in the system.

The end goal is a system of sensors and computers that track what’s happening in real time and then adapt to circumstances with security built in. The security comes in the form of auditing thanks to blockchain (Xage uses the IBM Hyperledger standard) and tokens that grant authorization to command a device reconstructed using Shamir’s Secret Sharing.

As someone who writes about IoT, I’m wondering if this is the new security model we might need for a world of millions (or trillions) of distributed, connected things.

Xage’s software can run on a few kilobits of memory so it can sit on tiny sensors. Xage also has partnerships with companies like Dell to put the software on industrial gateways. It also ties into existing systems, such as Microsoft’s Active Directory, that manages what privileges individual employees have. Thus the things can now link up with people in a trackable and secure way.

Customers such as industrial giant ABB are using Xage, as is smart metering company Itron.