Blockchain IoT: How Decentralization Unlocks the Full Potential of the Internet of Things
The Internet of Things (IoT) is undoubtedly one of the most promising technologies currently making a name for itself. As it continues to mature, it could spark an age in which most devices in our homes, offices, shopping malls, parks and vehicles have some sort of smart connectivity integrated into them.
According to recent studies, around 60 percent of US homes already have at least one device running IoT applications. Furthermore, by the time 2019 comes to an end, an estimated 26 billion devices will be connected to the Internet.
Nevertheless, while those numbers look more than encouraging, IoT is confronted by a number of security challenges that have to be addressed. Counterfeit risks, various software faults, dangers associated with inter-device communication, system management difficulties and data privacy top the list of significant issues currently drilling holes in IoT’s potential.
Luckily, most of these shortcomings can be effectively amended by combining IoT with another rapidly evolving technology, one that already cemented its status as a game-changer on the security front. We’re, of course, talking about blockchain.
By combining IoT and blockchain, it’s possible to maneuver around most safety pitfalls currently associated with the Internet of Things. And, on the other hand, this is a perfect opportunity for blockchain to make its way into our everyday lives. Shortly put, it’s a win-win situation for both technologies.
Internet of Things (IoT) – Converting Everyday Items into Genuine Smart Devices
In a nutshell, the Internet of Things systems can be interpreted as internal networks that allow all sorts of devices and items to process data and interact with each other. The catch is that IoT applications bring the Internet to devices we don’t usually associate with the online world, such as coffee makers, washing machines, vacuum cleaners, refrigerators, car parts, etc.
A lot of devices become “smarter“ once connected to the World Wide Web – air conditioners can automatically adjust to temperature changes, garage doors can open on their own 15 seconds before you reach the driveway, windows can open on their own to air the apartment minutes before you come home, heating systems can figure out the most economical methods to keep the house warm, etc. The possibilities are truly endless.
An IoT platform facilitates communication between physical objects via sophisticated chips, sensors and actuators, each transmitting various data over the same network. Once data is gathered, IoT applications use it to spur items into action, leading to unprecedented levels of functionality. An IoT system can usually be broken down into the following three components:
- Devices that receive and collect data (motion, moisture and light IoT sensors, for example)
- Networking systems that process relevant information and send instructions to connected items
- Actual devices that perform the instructions dictated by the IoT platform
As you can, the effectiveness of IoT rests on the shoulders of information flowing through the system. Unfortunately, keeping data safe throughout its IoT lifecycle is what’s been stagnating IoT’s development for years, which is exactly the concern blockchain can alleviate. Blockchain systems, known far and wide for their disruptive capabilities, make for a seamless fit with what’s holding IoT back at the moment.
Source: via Open Ledger
Blockchain and IoT: Two Technologies Seemingly Made for Each Other
Based on the concept of decentralized networks recording and processing transactions in a transparent and secure manner, blockchain is a type of Distributed Ledger Technology that stores data in a chain of time-stamped blocks. Once a part of the blockchain, data cannot be altered or deleted.
Right off the bat, it’s easy to see how blockchain and IoT fit together. The biggest drawback of all IoT applications is that they must depend on centralized communication models handling sensitive data. These centralized systems are a minefield of security issues such as data breaches and ransomware.
Luckily, by mixing IoT and blockchain, we can guarantee the security of all the data getting exchanged between devices in an IoT platform, regardless of its features, size or use case.
How Blockchain Technology Guarantees the Safety of Data Flowing Through an IoT Platform
Blockchain’s cryptographic algorithms can ensure the confidentiality and security of the data in an IoT network as they don’t depend on a single thread of communication. Securing the system in this manner makes it completely decentralized.
This slams a lot of invasive doors shut to would-be hackers, instilling a strong layer of safety across the entirety of an IoT system.
Smart contracts, naturally, play a huge role in the blockchain and IoT conversation. The main reason behind blockchain’s self-governance, smart contracts amidst IoT protocols can both run specific logic and verify the validity of participating devices.
Furthermore, smart contracts reduce the time it takes to verify the information within the network, which leads to better operations throughout an IoT platform. This is great news both for IoT startups and large companies looking to push the boundaries of what current Internet of Things systems are capable of.
The bottom line is that, with blockchain, there’s no way that an unauthorized device outside of the IoT network can scam its way inside the system. And, as each and every device controls the ever growing chain of data, there’s no executing anything without the entire system validating a course of action.
General Benefits of Combining IoT and Blockchain Systems
Putting security improvements aside for a moment, here’s a quick rundown of a few other benefits blockchains can offer to IoT networks:
- Substituting the client-server model for a true peer-to-peer system eliminates most instances of single point of failure
- It becomes easier to scale up an IoT network as introducing new devices is a lot less risky with a blockchain in place
- Improved technical workflows with better all-around, real-time visibility
- Lower operational and maintenance costs across the board due to shared storage and computation duties
- Opportunities to drive commerce among devices with IoT cryptocurrency models (IoT Chain comes to mind almost instantly)
- Higher transparency over maintenance and repair history of IoT devices, both of which are valuable in cases of damage or transfer of ownership
- Improved ability to track records across a network in which multiple suppliers and vendors have to work together
So, while blockchain may not be the silver bullet for all IoT issues, it really does propel it to new levels in more ways than one. That’s, after all, why IDC predicted that by 2019, 20% of all IoT deployments will have at least a basic level of blockchain services enabled. And, as it turned out, they were right on the money with that prediction.
Promising Use Cases of Blockchain in IoT Systems
During the last several years, numerous industries have begun experimenting with blockchain while working towards more secure Internet of Things applications.
As more business owners started reaching out to blockchain technology companies, it quickly became clear that integrating IoT with distributed ledger solutions results in enhanced security, increased trust among participating parties and more effective operations.
That being said, here’s a list of some of the most interesting Internet of Things examples and use cases in which blockchain can make a true difference:
Supply chain and logistics
Once combined with IoT, blockchain can drastically improve the traceability of supply chain networks, which has been a thorn in this industry’s side for decades.
Temperature and motion IoT sensors and GPS devices are already used to provide crucial information within supply chains. However, instead of risking data manipulation or human errors, why not store all that data onto a blockchain and bring improved levels of traceability, auditability and transparency as a result?
As there’s a huge demand for more effective and transparent supply chains, there’s a strong case to be made that this industry will be vital for the future of IoT, so expect numerous Internet of Things companies to swarm around supply chains in the next several years.
IoT applications and devices have long been used to remotely control home security systems. Unfortunately, these products notoriously leave a lot of room for costly cyber attacks.
By moving the data to a blockchain, we eliminate the centralized model of exchanging information generated by IoT sensors in our homes. This takes weak security standards out of the picture, allowing smart home applications to finally see wider adoption they deserve.
The car industry is another great match with what blockchain and IoT bring to the table. After all, as an estimated 200 million vehicles will be connected to the Internet by the time 2020 takes full swing, bringing the security levels up to a respectful level should be a top priority.
The main cause of concern when talking about IoT in the car industry is that devices made by different manufacturers often don’t have the same security protocols and standards.
Blockchain technology allows an IoT platform installed inside a car to verify the validity of the person or system trying to access it, which makes all the difference in the world in terms of security.
Parking IoT solutions
Since we’re at the topic of vehicles and IoT, here’s another opportunity for blockchain deployment – parking lots. Right now, IoT sensors are situated in a lot of parking areas. Most of the time, they fetch the information needed to calculate the time a vehicle was parked at a certain spot.
Blockchain adoption would make every IoT platform in charge of parking run a lot smoother and safer. What’s more, a blockchain would allow drivers to automatically settle debts with parking owners via cryptocurrencies.
A great example of such a use case comes from a company named NetObjex which created a parking application that perfectly displays what IoT and blockchain can do within this sector. Their solution measures the time spent parked and automatically settles debts via an IoT cryptocurrency, and it helps users quickly locate empty parking spaces.
Blockchain and IoT have the potential to completely reshape the construction industry as we know it. With a joined effort, these technologies could drive construction sites towards effectiveness, accountability and transparency.
Since construction projects are generally complex and need to account for a lot of regulations and standards, issues with trust and verification are far too common in this sector. The lack of a standard method for communication between parties is also cited as a common obstacle.
Construction companies can leverage the combination of blockchain and IoT to increase transparency in cost, time and scope of projects. Powered by blockchain, Internet of Things companies can piece together solutions that ensure construction materials are sourced on time and are of the appropriate quality, while smart contracts can automatically issue timely payments linked to project milestones.
Source: via Pinterest
Blockchain IoT: As Natural of a Technological Fit as It Gets
As of right now, IoT has nowhere to go but up. Projections show that there’ll be as many as 75.44 billion IoT devices by the time 2025 dawns on our calendars, so we should expect big things from this up-and-coming technology.
However, as the usage of IoT goes up, the threat to misuse it will only get bigger. That’s why blockchain IoT solutions will only get more popular down the line – after all, at least at this point, there is no better way to protect enormous amounts of sensitive data that with a blockchain,.
In our opinion, we’re willing to go as far as to say that combining IoT and blockchain will soon become the norm within the Internet of Things industry.
These two technologies make for an ideal and mutually beneficial fit, and it’s fair to expect their combined effort will disrupt a number of industries currently gasping for better operational solutions. It remains to be seen to what extent this disruption will go, but honestly, we’d stay clear of betting against these two groundbreaking technologies.