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Smart devices have the potential to revolutionise our world with their ability to respond to our needs, record our outputs and automate many time-consuming, repetitive tasks. From smart watches to smart healthcare and homes, we are becoming increasingly device dependent. There are only a few factors that make a device smart; it has to have a power switch and an internet connection. And that is where the smarts end.


There is no firewall, security software or unique password access.

There is no IT team monitoring bugs, bots and viruses and supplying patches and updates.

The devices are often operated with default passwords.

Some of these products sit in our homes and offices for many years, connected to the internet using a default password with no security updates at all. These connected devices provide an open gateway to and from the internet to anyone with malicious intentions.

According to Growth Enabler, the IoT market size is expected to overtake global smartphone sales by 2020.

Security loophole

Criminals have taken advantage of the security black holes inherent in smart devices, by hacking and misusing those on company networks to reach into the IT networks and databases of large organisations. Thousands of smart devices such as toasters have been mobilised by hackers to disable large organisations, for example banks, by overwhelming their servers with millions of data requests.

As smart devices evolve, they are revealing and exposing the technological weaknesses of our current internet protocol. This system, which originated to share packets of information over large distances across nodes throughout world, is proving to be woefully inadequate to support and manage the number of smart devices currently available in the marketplace.

According to Gartner, there are some 11 billion smart devices globally and this is set to rise to 20 billion by 2020.

Internet of Things by world

IoT installed base Gartner

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Introducing Blockcloud

The trouble is, our existing internet structure lacks the trust, security, infrastructure, connectivity and scalability required to support the rise of smart devices. One approach that aims to change all this is Blockcloud. And it’s due to launch late 2019.

Developed by a highly specialised team in China, Blockcloud intends to reinvent the networks on which modern applications drive, by providing secure, scalable and dedicated hardware infrastructure that can be used by anyone, without having to pay for it.

Blockcloud reconstructs the technology layers below the current blockchain networks and internet applications. It’s a building block that provides consistent connectivity for dynamic networks.

Blockcloud diagram

Diagram showing current internet data flow compared with proposed Blockcloud data flow.

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Empowering iOT

Creating a secure network for the massive influx of IoT requires the merging of two key technology advancements:

  • Service-Controlled Networking (SCN) enables the internet to scale dynamically and configure networks in response to the changes in information flows among the services.
  • Blockchain, and its distributed ledger, provides the trust, security, fairness and incentive required to enable smart devices to operate with safety and data confidence.


Empowered IoT

Service-Controlled Networking and Blockchain Empowers IoT.

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The Internet as a Marketplace

Reinventing the internet by providing safe and secure hardware infrastructure to the world requires rethinking payment for access.

The Blockcloud team have come up with a creative answer. At the heart of Blockcloud is bitcoin and a pricing mechanism which automates payment transactions between service providers, services users, service miners and verifiers.

The BLOC token is the network’s native token and is used to enable an incentive-driven marketplace for IoT services. There will be four main participants in the network:

  1. Service providers publish services to the marketplace and are rewarded with BLOC tokens based on their level of contribution.
  2. Service users subscribe to services from the marketplace and will pay BLOC tokens to consume various IoT services.
  3. Service miners maintain the ledger and protect the network from attacks by utilising a Compacted Directed Acyclic Graph (CoDAG) ledger framework to achieve consensus. The miner that generates a stable block will be rewarded with BLOC tokens. Mining rewards will be released at an annual rate of 5% over 6 years.
  4. Verifiers ensure the quality of services provided and help the system decide whether to reward or penalise a service provider. Verifiers are rewarded with BLOC tokens for verifying services.

As a blockchain-based advanced TCP/IP, Blockcloud can provide safe, efficient and stable internet access for massive devices such as:

The Blockcloud architecture

The new Blockcloud architecture will be comprised of four layers:

  • Transaction-chain Layer: Stores the encoded transactions of the network as a global ledger.
  • Service-chain Layer: Defines new operations without requiring changes to the underlying blockchain. This layer also contains the Blockcloud marketplace which allows users to bid for various services.
  • Routing Layer: Responsible for the task of routing requests, such as discovering services. Because the Routing Layer is separated from the Service Layer (unlike typical web services), Blockcloud allows multiple service providers to exist concurrently.
  • Service Layer: Serves the actual services of the network. The network will utilise Proof-of-Service (POS) to ensure service reliability, with the help of the network’s verifiers.

Blockcloud’s Layered Architecture

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Blockcloud provides a secure basic architecture comprised of a new-generation internet protocol containing:

  1. A layered structure to embed blockchain into SCN
  2. A Service Access Layer (SAL) to enable service-based communications
  3. PoS (Proof-of-Service) to verify the authenticity of service
  4. CoDAG to effectively record transactions
  5. Devising a truthful continuous double auction (TCDA) mechanism based on Game Theory to fairly distribute services.


Although Blockcloud is still in development, it appears to be a comprehensive approach to the problem of securing millions of connected smart devices around the world. It aims to restructure the internet to better support this growing market. As smart devices become bigger—evolving from toasters to cars and homes—Blockcloud offers a more secure network for the ride, similar to that found in large organisations. It also offers a better business model than the current internet system, by shifting hardware infrastructure capital expenditure away from the individual. It allows the market to exchange products and services dynamically. A truthful continuous double auction (TCDA) mechanism distributes these services fairly, while an automated cryptocurrency pricing and payment model facilitates transactions. This pricing mechanism promises to democratise secure cloud-based internet access for all. And best of all, we may never need to fear our smart toaster again!

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