Blockchain and the Internet of Things: A Winning Combination

Blockchain, the distributed ledger that eliminates any need for a central authority, has been gaining momentum since the last year. From being a technology that backed a cryptocurrency to becoming mainstream for a secure and robust recording of transactions, Blockchain has come a long way.

Blockchain technology is changing all aspects of doing a digital business. Another technology that has been altering business operations and giving birth to newer opportunities is the Internet of Things buzz. Connecting all devices, or things to the Internet and deriving knowledge from them, or building practical applications on them, is a trend that organisations have well embraced.

The billions of smart things getting connected with each other and with humans can transform cities, homes, and lives. But, this immense interconnection also brings us to the same old worry about the security of big data and information.

Imagine a botnet attack a group of these devices. What are we to do then? To the rescue, Blockchain comes. Security of transactions and operations is the one thing Blockchain technology promises, and the one thing the Internet of Things technology lacks!

Through a winning combination of IoT and Blockchain, a lot of challenges that face IoT can be reduced and a lot of newer applications of Blockchain can be innovated. Blockchain and cryptographic processes are an alternative to the traditional security mechanisms. The decentralised control that Blockchain offers is also an interesting aspect of the Technology regarding security and integrity of information on the web.

Needless to say, a security system built on Blockchain would be more easily scalable than the customary systems. Blockchain also prevents against the tampering with data, which would prove as a shield against malicious attacks.

Internet of Things applications run the risk of being compromised in security attacks and revealing the user’s behavioural patterns and personal lifestyle, as these technologies work really close to a human. IoT needs security as sensors and embedded devices are going to pass on information to one another over the Internet, and for now, there is no clear way to secure those communications better than employing Blockchain technology.

With bitcoin, all Blockchain did was moving the wallets of cryptocurrency from one anonymous user to another. Blockchain can potentially be applied to carry out more complex applications like device authentication, control and security layers within a security system.

Blockchain’s following salient features make it a great technology for making Internet of Things more secure-

• Anonymity
• Security
• Decentralization

As an example, IBM Blockchain already allows the application of private blockchain into cognitive IoT. It is believed by leaders and influentials around the world that the winning combination really will involve all- Internet of Things, Blockchain, and Artificial Intelligence. This mixture will lead to efficient and effective business transformation and digital upgrading.

An IBM infographic reveals three key benefits of employing Blockchain and Internet of Things together as:

• Building trust Building trust and confidence between parties and devices with a reduction in the risk of tampering of information and applications.
• Reducing costs The role of intermediaries and middlemen will be eliminated and would eventually lead to cost reduction.
• Increase the pace of transactions Reduce the settlement time of contracts and payments from days to seconds.

While the Internet of Things, software application development technology has been seeing a lot of hype and buzz, Blockchain is relatively new to the fame and the intersection of the two leading technologies will be interesting to witness in the near future.