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Blockchain-Based Smart Locks

Protect Your Property with Blockchain-Based Smart Locks

Pedro is a young man who is about to go on a business trip. He decides to pawn some of his belongings, such as his car, bicycle, lawn mower, and even his own house, to make some extra money while he is out if town. He registers on one of the thousands of platforms that exist to find someone interested. Although, the buyer & seller protections on these platforms are meager and the platforms do not ensure complete security of his belongings, besides charging high service fees.

This is the case with many people who, like Pedro, look for intermediate platforms such as Uber, Airbnb, and Getaround, etc., to earn some extra money. Although the purpose of these platforms is to facilitate the collaborative/sharing economy, the problem is that they do not fully understand local regulations, which means that their users, unaware of many of them, are penalized when leasing their property.

Fortunately, a solution can be devised using Blockchain, smart contracts, and the Internet of Things (IoT). This solution is the Blockchain-based smart locks. Although its name doesn’t attract much attention, this proposed solution changes the current paradigm of “Lock-as-a-Service”. This solution is conceived as an idea that abstracts the characteristics of smart locks and adds others, such as the ability to execute smart contracts, and thus the ability to collect and make deposits directly on the Blockchain, creating a fully autonomous functionality.

How Blockchains Work

Blockchain-based smart locks work as follows: When a person buys one of these locks, he initiates a connection to the smart contract of the lock on the Blockchain so that it can be controlled by him. After such a connection is made, the owner gains the ability to set the rental price and deposit for the device. This information appears in the smart contract, ensuring that a user interested in renting an object protected by a smart lock must make a deposit price transaction through the Blockchain, thus obtaining permission to open and close the device through his/her smartphone. When the user returns the leased object, he/she receives the difference between the deposit price and the rental price.

Significance of Blockchain

Smart locks acquire many benefits by incorporating the Blockchain into their operations, including the reduction or elimination of third parties in carrying out transactions, security provided by the end-to-end encryption of user data and transactions, transparency, which eliminates any opportunity for fraud, and automation using smart contracts. This last characteristic is the one that enables the user to interact with the lock throughout the entire life of the transactions.

The potential uses of this technology in various day-to-day life are many, for example in cars. Cars could be parked on the city streets waiting for the next customer, located with the phone app, rented by the hour, and unlocked using the app, “Paying for the Lock” on the Blockchain, used, and parked again.

Applications of Blockchain

Currently, this solution is already being applied by some companies, including Slock.it. These companies have taken the development of these locks into the field of home automation and smart homes. They use Ethereum as the base Blockchain with smart contracts to handle the transaction cycle of the rental devices. The objects are “unlocked” when the payment for the use is made.

Another example is Storj. This company brought the idea of smart locks to Cloud Storage. They use Blockchain technology and a P2P protocol to provide secure, private, and encrypted Cloud Storage that enables users to rent unused space on their personal computer's hard drive. Users can rent their free private storage space (personal computer) belonging to other clients on the network and pay with Storj Coin, a valid token on the Ethereum Blockchain.

There are also applications focused on smart cities, like Moeco. This company uses Blockchain to develop its own IoT data routing platform, to create a new concept: the Domain Name System (DNS) of things, with which it seeks to ensure that communication between IoT devices and as well as the information collected by the devices is decentralized and accessible to anyone. The way to get the right to use it would be by renting the platform, something like a subscription plan.

Conclusion

Blockchain enables us to be able to generate new markets without intermediaries. There are still many possibilities for Blockchain application, and at Encora we are at the forefront of these disruptive technologies to support clients in their innovation journey.

References

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