The potential of IoT in blockchain

An IoT platform enables IoT devices to send data to blockchain ledgers for inclusion in shared transactions with tamper-resistant records. By using IoT in blockchain all participants in a network can verify each transaction, preventing disputes and ensuring each participant is held accountable for their individual roles in the overall transaction.

The blockchain is a peer to peer distributed ledger technology for a new generation of transactional applications which maintains a continuously growing list of cryptographically secured data records that are protected against tampering and revision. It can help establish trust, accountability, and transparency while streamlining business processes. By implementing IoT in blockchain, we can re-imagine the world’s most fundamental business interactions, thereby opening the door to invent new styles of digital interactions.

Combining these two technologies has the potential of vastly reducing the cost and complexity of operating businesses. The distributed ledger makes it easier to create cost-efficient business networks where virtually anything of value can be tracked and traded, without requiring a central point of control. While there are quite a few advantages that come with IoT in blockchain, two major advantages need a special mention here.

1.   IoT in Blockchain: Eliminates Network Failure Points

Combining the two technologies of IoT and blockchain can optimize supply chains by tracking objects as they traverse in the export and import supply chain. Blockchain technology enables secure traceability of certifications. IoT enables every physical product to come with a digital passport that proves authenticity and origin, thereby combining these two technologies can help in creating an auditable record of the journey behind all physical products. Use of IoT in blockchain can also help in implementing compliance by allowing companies to track equipment or process history in an indelible record and enable easy sharing of this information with regulatory agencies or insurers. Combination of IoT and blockchain technology is not limited to these industries or use cases. Any business with a network can use these technologies to reduce costs, improve business efficiency, and remove single points of failure in business networks.

2.   IoT in Blockchain: Reduces Security Threats

IoT architecture can handle many security and privacy threats. It can also help in reducing the vulnerability of blockchain network due to denial of service attacks, modification attacks, and the 51% attack. Thus, IoT helps in providing a lightweight, secure and private framework that retains most benefits of blockchain technology.

IoT devices can effectively collect data and process it, either locally or send the data to centralized servers, thereby enhancing blockchain capabilities. Implementation of IoT in blockchain facilitates the development of open technology platform that can enable devices to discover, communicate, and interact with each other in a distributed and fully autonomous manner.