You should understand how blockchain technology is significant in the IoT so you can make the most of it. In general, blockchain technology is considered the missing piece to resolve the concerns of IoT from scalability to privacy and reliability. To understand things better, here’s what you should know about blockchain technology and IoT:
What is IoT?
As described by Ernst and Young, IoT is the connection of any devices to the Internet. This connection is through the embedded sensors and software, which enables devices to communicate, collect and even exchange data. Simply put, IoT is used to address the increasing amount of devices that are able to connect to a larger network of communication.
What are the issues IoT currently encounters?
You have to remember that IoT platforms are cloud-based. This means they have a central hub, which delivers backend services to smart devices. Centralized IoT presents the following issues:
- Security: when it comes to IoT, security is always brought up. With billions of connected devices, it is difficult for users to secure personal data. Apparently, the more devices connected, the more risks and security threats presented. There is no surprise that companies suffer hacks.
- Cost: IoT is expensive to manage and deploy. The integration is costly and with this, the cost of devices with IoT capabilities is likely to rise.
- Privacy and data storage: there is a massive amount of consumer data stored in centralised repositories. This is risky.
- Not enough infrastructures: it is estimated that by 2020, IoT devices will reach 20 billion. This means that the devices need network support. However, it is a challenge to imagine a functioning network that is supported by unsecure and inefficient centralised models.
How does IoT benefit from decentralisation?
Centralised services are not long-term. Knowing this, you need to move backend services and data far from centralised services. This will pave the way to decentralised IoT. Decentralised IoT presents the following benefits:
- Tamper-proof: you should know about DLT (Distributed Ledger Technology) which prevents fraudulent activities and tampering. DLT utilises asymmetrical cryptography to store transaction data and other information on the ledger.
- Improved security: the cryptographic signatures of blockchain can make hacking difficult.
- Affordable: when storing data through ledger technology, IoT becomes affordable. Since hacks can be prevented and decentralisations make IoT more accessible, the costs will be lower.
- Autonomous: blockchains allow smart devices to self-monitor or act independently.
What are some use cases for blockchain in IoT?
IoT applications in blockchain already penetrated nearly every aspect of your daily life – without you knowing. Here are some use cases for blockchain in IoT:
- Smart appliances: new houses and buildings have appliances with the power to connect to other appliances or mobile phone apps. Instead of storing the data in a cloud-based storage solution or centralised server, smart appliance data could be deposited on the blockchain. In the end, this would help secure personal information.
- Supply chains: supply chain is made of many layers and it involves many parties across different time zones. Blockchain can streamline the processes for different supply chains.
Without a doubt, IoT and blockchain are transforming the world, as we know it. The two have a lot of things in common but very little understanding that is why it is crucial for your organisation to continue exploring their relationship. To help in your exploration, you should consider Tandem, which will work with you to integrate the technologies important for your employees and customers.