When you also assume that most of the IoT devices are going to be very low power and probably not have much storage or processing power, it seems an odd choice to use. What's the advantage of block-chaining over something like Paxos which is already widely used and more or less the standard distributed consensus algorithm?
The block chain solves the distributed consensus problem in a way that is robust against attacks. That's what is so costly. Paxos requires that every node be trusted.
The problem the article is getting at is emerging as a core technology problem. Either your security is feudal, the you don't own it model, or you are responsible for admin. Few people have the knowledge or time for that. So in that model it becomes the Internet of someone else's pwned things. Now instead of your car not starting because you're late on a payment, your car doesn't start because someone who heard about your blog on 4chan doesn't like you.
I think solving this problem in a way that is neither feudal nor opens everyone to attack is a core tech problem of the 21st century. It's an engineering problem, and no I don't think the block chain solves it. Block chain schemes as a class are too heavy and have scalability problems. They can work in some domains but not this one, and not universally.
There are several differences, but the main one is that with Paxos all the members are trusted, and have to be under a single administrative domain. With the blockchain, the whole point is to come to consensus without trust in a central authority.
Other differences:
- Paxos (Chubby, etcd) and related algorithms (Zab/Zookeeper) are used with a small, fixed membership -- i.e. 3 to 7 servers. Everybody else is a client. In contrast, the blockchain is for a huge, frequently changing membership.
- Paxos is expensive and is used within a single data center with LAN latency. The blockchain is used in the exact opposite situation: on the Internet with large latencies and large variance in latency.
Also, note that Thread is at least a year from being baked.