Internet of things (IoT) and blockchain are business disruptors, and we have now started seeing their widespread applications. They have been transforming business operations across the world with their respective capabilities.
IoT has opened new doors and opportunities for businesses, with smarter ways of collecting and interpreting data and putting it to a practical use in different verticals. The world is increasingly becoming more interconnected.
On the other hand, distributed traits of blockchain have successfully addressed the trust issue in data access and management. It brings an unparalleled level of transparency in digital interactions.
That being said, it leaves some important questions to ponder over – can they work together? What if they do? What kind of new possibilities will they generate with this convergence?
Business communities have been trying to find the answers to these questions by exploring the possibility of blockchain application in IoT. A few of them have already started to run initial implementations gradually. A research by a global marketing intelligence firm IDC makes it look more assuring. According to the research, 20 percent of IoT deployments will include basic levels of blockchain services enabled by 2019.
Before we start to explore more about the implications of this alliance, let’s quickly refresh what blockchain and IoT are and how they work.
- Blockchain: It started to gain attention with the increasing popularity of Bitcoin in 2008. The blockchain is a shared database with an ever-growing list of records. It is used to store and manage data transactions on an encrypted digital ledger.
Unlike regular databases, it is decentralized in nature and there is no single authority governing it. Each transaction in the blockchain is encrypted and converted into a block with restricted access only to the authorized users. The blocks are added in chronological order and can be traced back to their origin. Once added in the blockchain, the blocks cannot be changed. All the records are only amended through a consensus mechanism among the authorized users.
- IoT: IoT is a continuously expanding network of physical devices that communicate with each other to collect and exchange data in a machine-to-machine interaction.
Ever since the IoT was implemented for the first time a few years ago, it has been bringing the world closer. Its adoption grew exponentially over the years across various industries, and today, we can see IoT and connected devices everywhere. A great example of IoT application can be seen in the healthcare industry where interoperable devices are contributing to improving patient care delivery.
Why Is There a Need for IoT-Blockchain Convergence?
While IoT has brought to us a series of goodies to upgrade personal and business environments, we’ll have to admit that the IoT devices are far from being impervious to attacks. In a network where multiple devices are connected with one another and there is a constant exchange of critical data between them, a potential threat of risk exposure is bound to loom large. A few examples to include here are:
- Banking transactions performed through mobile phones
- Online transaction on a supply chain software
- Movement of patient health information stored in medical devices, etc.
- Personal health data stored in wearables
And, there are many more such examples that keep the concern growing. There have been many instances of attacks in IoT networks, which have compelled the IoT community to think seriously about the existing data privacy and security measures for interconnected devices, software, and network.
Not enough security measures are in place at present. The IoT community is on a consistent lookout for a trusted method that can turn their automation processes and data exchange activities completely breach-resistant. And, blockchain fits the requirements perfectly.
What Are the Key Benefits of This Alliance?
In the avenues that blockchain and IoT can open together, there a few highly beneficial aspects of the alliance that the businesses may look forward to leveraging. Below are the major few of them.
- Blockchain traces the coordinate between countless devices working together and audits the transactions taking place between them in real-time. It prevents the duplication of your data with some malicious information.
- The cryptographic approach taken in blockchain application further cements that your data is safe and secure, more than with just IoT.
- It can be used to simplify the IoT infrastructure where two devices are able to exchange critical pieces of information with each other without incurring the risk of a breach or data loss.
- Blockchain-IoT convergence results in a decentralized, tamper-proof infrastructure. So, in case of a breach or attack, the effect will not be cascaded down to the other layers of the infrastructure. Therefore, all other devices and records remain protected.
- In blockchain, the entire history of each device can be traced back to its origin. Therefore, in case of a technical breakdown or malfunctioning, it’s easy to identify the source of the issue in real-time and troubleshoot it. This saves a significant amount of time and resources which can be used more effectively elsewhere.
- Blockchain requires all the connected devices to register and validate themselves against the network. Such type of IoT development leads to fortifying the architecture and strengthening its integrity.
- The decentralized structure of blockchain also eliminates the need for an intermediary or third-party to establish trust. It simply facilitates a secure and seamless flow of information between devices.
- Also, in the absence of a third-party, blockchain brings down the operational costs of deploying and running IoT infrastructure.
In addition to the benefits listed above, blockchain-enabled IoT solutions help in streamlining business processes, enhancing customer experience and running the operations economically.
Where Does it Appear to Be Landing?
Blockchain application into IoT has numerous implications. Their combined strengths can create new horizons and raise performance benchmarks. By tracking the history of individual devices, applications, and services connected together, it is possible to detect the individual sources that need attention. Blockchain ensures that the communication and transactions between the devices are encrypted and secure, making it convenient to keep the operations transparent.
Integration of blockchain with IoT can create a robust and impervious enterprise architecture where a number of interconnected devices interact with each other over a secure network.
However, blockchain technology is relatively new and its applications are still in nascent stages. We are yet to observe and realize the amplitude of its strengths. But, what’s certain is that the current benefits derived from the convergence of blockchain and IoT only represent the tip of the iceberg.
This duo together is surely on the way to introducing one of the biggest disruptions of all time!
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