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GE Ventures backs Xage blockchain secured IoT

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Yesterday Xage announced a $12 million Series A funding round. March Capital Partners led the deal which includes GE Ventures, City Light Capital, and NexStar Partners. The Californian company claims to be the first and only blockchain-protected security fabric for the Industrial Internet of Things (IIoT).

How can blockchain provide security?

Blockchain of itself doesn’t provide security. But it’s possible to use blockchain to detect cybercrimes.

For example, hackers usually change passwords or add bogus users. Plus they tamper with logs to hide the fact that an unauthorized user accessed a machine. Many industrial installations like oil pipelines have multiple locations. So even though a company may set user policies centrally, a hacker could tamper with a single site.

The solution is to store details of users or passwords as an illegible hash on an internal blockchain. Then if someone tries to tamper with one remote location, the details can be checked across multiple servers or sites to see if there’s an inconsistency. That’s the basic concept of using blockchain for tamper-proofing.

Xage’s solution

In December 2017 the company launched Fabric which provides tamper-proofing for passwords, enrollment, and policies in the manner described above. Xage Systemic Tamperproofing uses the same idea for the fingerprints of devices and industrial control system (ICS).

Xage is working with NTT Communications, GE Renewables, and GlobaLogix. And the company envisages applications for its technology in decentralized energy production, 5G networking, and smart cities.

“For IIoT technologies to successfully take hold, we need to deepen and broaden the integration of comprehensive cybersecurity within industrial systems,” said Duncan Greatwood, CEO of Xage Security. “We believe that every industry can be made more efficient and more secure. With this support, we will continue developing and implementing a foundational security solution that enables industrial innovation.”

Greatwood was previously CEO of Topsy Labs. Apple acquired the company in 2013, and he spent two-and-a-half years working at Apple Search.

“For industries to benefit from the IoT revolution, organizations need to fully connect and protect their operations,” said Abhishek Shukla of GE Ventures. “Xage is enabling the adoption of these cutting-edge technologies across energy, transportation, telecom, and other global industries. We are excited to support Xage’s innovative approach.”

Weakest link

Increasingly cybercrimes are committed using insider knowledge gleaned with underhand methods. If someone gains access to a central system using an authorized user’s credentials then they can add a user. Blockchain won’t help. And it’s conceivable that there could be physical tampering at a remote location so that it looks the same as five minutes ago. Much like you see in the movies with intruders playing old security videos, with a brief interruption in a sensor.

Xage’s solution is novel and may be the only one for IoT so far. However, recently developers in Russia announced they’re using blockchain to secure server logs in a similar way.

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