Filament evolving entire IoT space using Bitcoin blockchain

Eric Jennings, CEO of IoT company Filament points out that his company does not use blockchain in an amazing or novel way. "It's somewhat underwhelming for those familiar with the blockchain," he says.

Filament uses the Bitcoin blockchain as an immutable ledger to store receipts of payments for devices in the form of digital hashes in a decentralised manner. Jennings is modest about the blockchain-enabled parts that compose Filament's sum capabilities.

He told IBTimes UK: "We don't do anything magical, we don't do anything special. It's similar to Open Assets protocol or Coloured Coin-type mentality, where you're storing other digitised assets, you can call them tokens, but they are basically digitised immutable versions of a thing that can be trusted without having a central authority.

"That's really the need we had to solve for devices to be autonomous. Everything else we do is enforced on our device and executed on our device. So we are very edge-centered. We are kind of the opposite of Ethereum. They run smart contracts in the cloud, in the blockchain; they call it the world's computer because there is only one huge computer which everyone runs. But we execute essentially the same type of smart contract but on your devices themselves."

Jennings said the Filament system does a very small amount of micro-transactions using something very similar to the Lightening Network. Filament actually developed a protocol called Penny Bank which has some slightly different properties in line with Filament's governing design goals, such as not requiring constant online access.

"Because of the nature of our devices, and not always being online, Penny Bank can have long durations between reconciliation or clearing. But overall it's the same concept, and in fact we talked about it with Joe [Joseph Poon, co-founder Lightning Network], and said we if we can change a couple of the parameters we will probably just use Lightning Network."

Jennings points out that the unit of currency exchanged across industrial IoT networks is unlikely to be Satoshi's, at least for the time being. "None of our potential interested or current customers have anything to do with Bitcoin. They know about it; they understand the blockchain, but they don't want to transact in Bitcoin. They understand that it can be useful at some point and they are keeping an eye on it.

"Like most real companies that have bottom lines they must watch, they want to use what works. And they want to increase efficiencies now. So the unit of currency for them a lot of times should not be a cryptocurrency. It should be something else."

Filament also sees a kindred spirit in Blockstack, which offers a decentralised domain name system.

Jennings said: "Everything runs DNS; phones work with it, small embedded Wi-Fi devices use it. It just works fine. What that does, is gives a digital identity and allows the ability to discover and identify devices on the network globally, using 98% of the DNS infrastructure, plus a little bit of blockchain at the top for when it needs to look up.

"It doesn't matter who built the capability, the capability is needed and it's a very elegant way of doing it without reinventing everything."

In order for devices to be able to transact and exchange value on their own, completely isolated, Jennings explained that blockchain verification can be shared, usually via mobile phone transferred over Bluetooth. "If someone comes on and provides a new contract to each device, each device gets the Merkle path of the receipt from the smart phone.

"So basically someone carries the contract over there by hand is what's really happened, and then through block height and some other cryptographic means, the devices say yes these are legitimate contracts we are going to be obeying them for the next year, and then those devices run for a year on their own in the middle of nowhere."

Filament started out building micro-control hardware for the maker and DIY community to create nest networks. Ad hoc networks that don't require existing infrastructure have turned out to be very important in the industrial space; Filament was soon shipping to huge Fortune 50 companies. The company then pivoted to the industrial side, and Jeremie Miller, a close friend of Jennings, who he had worked with on the TeleHash protocol, moved from an advisory role to CTO.

The Filament team are also big fans of the IBM and Samsung ADEPT project, which used TeleHash. Last June Filament hosted IBM's research group from ADEPT and Samsung's senior research fellows from Seoul, Korea at an all-day workshop in the Bay Area.

Jennings lamented the fact that IBM had dissolved the internal ADEPT team, but reasoned that IBM sees itself very heavily as a services company, as a cloud company. "So when you start writing papers that say the cloud is no longer necessary it makes people upset. But even if they got some flack, they are on the right side of history at this size scale for a deployment of IoT.

"We are still friendly with John Cohn [IBM Fellow and chief scientist of design automation at IBM], who was a member of the ADEPT team. IBM seems to be focusing heavily at this time on their sponsored Hyperledger blockchain project– so perhaps we'll work more closely again in the future.

"Samsung Ventures invested in us in our last round, and so between both those companies we feel very close to them in terms of the way that those folks see the world."