Blockchain can revolutionize the Internet of Things

Companies have just begun to explore the underlying value of blockchain technology. The prospects for its application in IoT and smart systems are quite vast.

IoT and Blockchain – definitely two of the biggest buzzwords in technology at the moment. While the former enables devices to communicate with each other and the outside world, the latter offers a distributed ledger architecture pattern. The two, when together, can facilitate the entire lifecycle of IoT devices and applications with trust, transparency, record of ownership, and decentralized communication. No wonder, this combination is attracting business processes to act on the events created by it.

How blockchain impacts IoT

IoT is all about data collection and monitoring of devices. With a digital ecosystem consisting of billions of devices, which are connected with each other, they will tend to make smart decisions without any human involvement. On the other hand, blockchain provides a robust infrastructure to support machine-to-machine (M2M) communication. Now it would be interesting to note how both of these technologies come together and what is it that they’ve got to offer. So here’s an example – sensor hardware in an automobiles, when used in conjunction with blockchain mechanism, can deliver real time information regarding the automobile’s performance. This information could then be used by, say an insurer, to adjust premiums for this vehicle accordingly. The imapact could be summarized within these three facets:

- Privacy

As more and more devices get connected with each other, the protection of privacy is becoming a major concern. Consumers demand privacy that shouldn’t leave them vulnerable to a data breach in any form and at any time. What makes privacy for IoT an extremely sensitive issue is the fact that its consumers surrender their personal information to it, bit by bit, without even realizing. This mostly happens because they are unaware of what data is being collected and how it is being used.

Blockchain helps overcome issues around privacy with the use of cryptographic public and private key pairs that are unreadable by humans. This ensures that an outsider cannot compromise the confidential information shared by a device holder, on a network of devices.

- Security

IoT networks are vulnerable to Denial of Service (DoS/DDoS) attacks where servers are targeted and are brought down with traffic inundation. This has a negative impact upon the IoT ecosystem, especially when sensitive issues are being handled. Moreover, in industrial settings, such as large farms, it’s difficult to establish centralized networks. This is because it is not easy to expand IoT nodes over such huge landmasses with sparse connectivity gear.

Blockchain technology will help create safe mesh networks, allowing IoT networks to interconnect with each other in an authentic way; thus, circumventing threats such as device spoofing and impersonation.

- Complexity

Complex systems, like the ones made of IoT, may fail under a number of circumstances. For example, you and your spouse receive a message from a smart device in your kitchen that the eggs at home are over. So both of you end up buying eggs. This means spending twice the amount and having twice the amount required.

Blockchain will help IoT devices to communicate and authenticate with each other, without the need of any third-party verification, thereby reducing complexity involved in the network.

Blockchain, being an amalgamation of such wide-ranging possibilities, has the potential to enhance the quality of service-delivery. It does this by promising high security, integrity, and confidentiality of data. With its transparent and secure operations, blockchain appears poised to revolutionize IoT.