Internet of Things (IoT) and blockchain are creating a lot of hype in technology and the business world. They are bringing revolutionizing changes in almost every aspect of our lives. Yet there are many more to come. However, combined together they will result in something greater than expectation.
Defining the terms ¦
Internet of Things or IoT is the constant proliferation of always-online, data-storing and sharing devices into our personal and professional lives.
Blockchain is designed in a suitable way which is an encrypted and disseminated computer filing system. It allows the formation of real-time and tamper-proof records.
Why Combine Blockchain and IoT?
There are several advantages of combining blockchain and IoT:
First, with data transactions taking place between multiple networks owned and administered by multiple organizations; an immutable, static record means ownership that can be tracked as physical goods or data.
As Blockchain records are transparent by their very nature, anyone who is authorized to connect to the network can track and analyze any activity pertaining to it.
Second, the use of encryption and disseminated storage makes the data accessible by all parties involved in the supply chain. Each and every detail of transactions will be recorded and monitored by the automated machines.
The private keys which provide write-access to blockchain, would be assigned to the machines. This will restrict any living soul to overwrite the record with imprecise information.
Third, blockchain networks such as Ethereum provides the smart contract facilities. These facilities allow the formation of agreements which will be bring into effect once the conditions are met.
This is likely to be highly useful when it comes to scenarios such as authorizing one system to make a payment, when conditions indicate that delivery of a service has been provided.
Fourth, blockchain helps increasing the potential of IoT environment by improving the entire security system in a drastic way.
A huge portion of the data created by IoT is extremely personal. Smart home devices, for instance, have easy access to sensitive details related to our day today lives. This data needs to be shared with other services and machines to get the advantage of the system.
However, it also makes such smart homes vulnerable for cyber-attacks.
How Blockchain and IoT can make a difference together
Data Encryption:
Blockchain uses encryption and distributed storage which enable to record the data securely in IoT mechanisms. Every detail of a transaction would, thus, be performed without any human interference. This system preserves the integrity of the data and allows it to be trusted by all parties involved in the supply chain.
Security:
The additional security is another beneficial factor of blockchain.
Given to the fact that blockchain does not allow any single thread of communication to be interrupted, the ledger used in blockchain can neither be influenced or damaged.
Blockchain has impressed the tech world with direct form of payment services without any mediator financial service providers through cryptocurrencies. As an autonomous security solution, Blockchain is considered as a seamless component for IoT solutions.
Tracking:
The unalterable records, data and history of an IoT mechanism can be kept and stored securely with blockchain.
This characteristic of blockchain enables the self-functioning feature of the smart devices without any centralized authority.
In this way, the implementation of blockchain would open up newer avenues for an IoT system.
Communication:
Blockchain allows IoT devices to transact and communicate securely with each other. Blockchain assures so that the transaction gets administered as per the predefined instructions of engagement.
Blockchain offers smart contract based networks such as Ethereum.
Reduction of Cost:
Blockchain allows confidential data to be shared among the shareholders directly without the interference of a third party. This system helps and allows a substantial cost reduction of the mediators in the value chain of the transaction. With these smart contracts, blockchain enables Internet of Things devices to automate payments and transactions across different types of devices.
Companies implementing IoT Blockchain Technology
Chronicled
Chronicled, based out of San Francisco, is a Life Sciences and Pharmaceutical company. The company has initiated the implementation of blockchain in all of its IoT devices. This is to inform all the alliances that are involved in its medicine shipping or food supply process about the sequence of guardianship.
Filament
The blockchain suite adopted by the technology company is branded as Blocklet. This blockchain suite is used primarily to support data safety in all the IoT mechanisms that are used in construction, manufacturing, transportation, and energy.
Helium
Helium ranks on the top of the list of the world’s first decentralized machine network. With the help of blockchain, the low-power IoT machines are connected to the internet in the system adopted by this network.
GridPlus
GridPlus is building the world’s first blockchain-based energy retailer. The company has also introduced its first archetype agent named the Lattice1. By implementing the Ethereum blockchain, the company is offering its consumers the access of energy-saving IoT devices.
Future Perspective
Blockchain and IoT are two technologies which are becoming universal and flooding the mainstream with its abundance of possibilities. As per a recent report by ResearchDive, the Blockchain in IoT market is to grow at a CAGR of 91.5% by 2026.
It is inevitable that there will be challenges and myriad of obstacles all the way through. Yet there are so many organizations looking forward to harness and leverage the benefits of blockchain-based IoT systems in the upcoming years.
