Community Blog Why Blockchain and IoT Are Perfect Partners

Why Blockchain and IoT Are Perfect Partners

In this article, we explain the current trends in IoT and how Blockchain is reforming the IoT industry, making them a perfect pair in today's digital world.

The Internet of Things (IoT) has become an essential part of every facet of our lives. It has modified the need for technologies and has devised more natural ways to build up smart homes, vehicles, wearables, and similar devices which a user can remotely control through a smartphone.

However, have you ever paid attention to the security and integration challenges of the IoT devices that currently emerge as a significant issue in the industry?

IoT connected devices have become today's buzzwords, yet the technology has a long way to go before it attains its full potential. It is quite impressive to note that with the power to generate $64.1 billion by 2020, IoT has moved us a step nearer to the digital world. Whereas the IoT has a lot to render, it has also added concerns related to security.

Wirelessly connected sensors are infused in all the IoT connected devices, which implies users can track all the connected devices. As per a Gartner report, "Over 10 billion IoT connected devices are presently in use, and the number will increase to 20 billion devices within the next two years." The report also mentions that protecting these devices is a challenging task.

As IoT is on the rise, marketers are embracing a sound, secure technology — Blockchain. The revolutionary technology is changing the way individuals perceive IoT. It provides a safe network by using the deconcentrated system to enhance the privacy, security, and consent of all the IoT connected devices.

Three Major Challenges of IoT

Although IoT is growing at a fast pace, three significant technological challenges exist that need to be addressed:

  1. Security: IoT endpoints open up the vulnerabilities for systems around the globe. Cybercriminals may use these vulnerabilities to access and retrieve a lot of sensitive data for illegal purposes. Attackers stealing data through connected IoT devices is within the realm of possibilities nowadays. They have already begun attacking systems making use of IoT devices, with Brickerbot and Mirai bostnet being some of the examples.
  2. Interoperability: Industries such as manufacturing have been working on various connected devices such as sensors, scanners, and cameras for a long time. Over time, every manufacturer will come up with their machine-to-machine (M2M) protocols. However, the collection of M2M communication protocols may make it troublesome to integrate products and services across varied brands. Developing a standard protocol across different manufacturers and brands will be in the best interest of the consumers as well as the producers of IoT.
  3. Connectivity: Enterprises have designed their infrastructure for the modern Internet age. The design copes with online connections and interactivity. However, even for large organizations, the current architecture is probably a centralized model. Businesses will have to conform to decentralized architectures to go ahead with the onset of IoT devices. They will have to update their systems to manage the massive amount of data that the IoT devices will produce.

Benefits of Combining Blockchain with IoT

The immense usefulness along with the disruption of the IoT and Blockchain technologies are one of the primary reasons behind the rapid growth within most industries today. Merging IoT with Blockchain technology has become the highest priority for all IT leaders of different enterprises. However, they need time to know the potential of Blockchain technology and to decide on the best way to integrate it into their business operations.

As IoT grows as a venting channel that modifies billions of devices to attach and exchange information around the digital world, security becomes its first significant challenge. For instance, data privacy and data storage safety present potent challenges.

Hackers may misuse these vulnerabilities to steal or hack sensitive information using smart connected devices. As IoT technology has become an essential part of our lives, such kind of security threats cannot go unnoticed.

Ultimately, what is the challenge for businesses here?

The answer to this very critical question is that there are multiple IoT approaches designed to keep an eye on the centralized model performance. An organization has to ideate the obstacles of the decentralized model to manage all the advanced IoT connected devices.

There is only one solution to all these challenges, i.e., Blockchain. Business leaders are focusing on building IoT-enabled devices even as they keep an eye on the Blockchain technology integration. The Blockchain assures the security of networks with its decentralized nature that provides liability and affirmation for every transaction.

The technology makes it unattainable for hackers to corrupt the data through an increased authentication and natural plague management. Additionally, Blockchain has the potential to deliver cross-platform compatibility and manage a steady operation of millions of connected devices on various platforms by making a standard machine-to-machine contract.

IoT devices may use Blockchain technologies such as Ethereum, which is a distributed computing platform designed to create a general platform for communication and transactions.

According to an IDC report, "global expenditure on Blockchain solutions is expected to reach $2.1 billion in 2018."

The Blockchain is a robust technology that will help organizations in implementing IoT in a more secure and reliable manner.

To summarize, the following are the key benefits Blockchain provides to IoT:

  1. Performance and Stability: Blockchain's distributed nature makes it enticing to IoT. Connected devices are rapidly increasing, hence, having a distributed infrastructure helps with performance.
  2. Flexibility: With numerous industrial and open source choices for Blockchain, it is possible for IoT organizations to use it to attain multiple goals without investing a lot in research and development.
  3. End-to-End Security: Blockchain's redistributed nature provides a rapid security advantage. It makes it tougher for cybercriminals to corrupt the data or coordinate a DDoS attack. Apart from this, primarily Blockchain-based smart contracts guarantee higher authentication and access management.
  4. Cross-Platform Interoperability: Connected devices are operating on multiple platforms. Blockchain may provide the underlying technology to bring all these devices along and facilitate the production of a standard M2M protocol. Smart contracts can even promote IoT devices to create digital agreements with one another or a more significant system.

How Is Blockchain Reforming IoT?

Integrating Blockchain with IoT makes it easier for organizations to execute confidentiality and power — a vital part that guarantees logical connections and secures the various IoT-connected devices network.

Blockchain technology primarily consists of 3 crucial elements: security, encryption, and agreement. These aspects running concurrently can affect allied network integration and elaborative data every single time. Therefore, by making such unbreakable network security, Blockchain may give a solid foundation for IoT-enabled reliable interconnection, thereby reducing the hazards that extensively compromise central server models.

Let me explain this using a use case scenario.

According to the most recent news published on GT Review, Skuchain (a Blockchain technology start-up) partnered with NTT Data to integrate Blockchain's advantages into the supply chain and logistics management. As per the report, both organizations seek to promote Japanese companies to use supply chain platforms offered through the Blockchain platform to present inventory financing.

IoT permits manufacturers to scan products on a combined basis, using smartphones. The connotation of Blockchain technology helps the manufacturers to trace their products at each node of the supply chain. As such, the users may follow and locate their products.

Combining Blockchain with IoT helped Skuchain to scale back their stock wastage, increase their productivity, as well as speed up and improve control over their supply chains.

Merging Blockchain and IoT will help identify the omitted link that may arise from accuracy and confidentiality concerns about IoT. It ensures complete and secure recording of all the data present on billions of devices and permits IoT devices to communicate safely.

Blockchain and IoT: The Future

As per an IDC report, "By 2019, as IoT adoption grows in major industries, governments, and consumer sectors, 20% of all IoT deployments will have basic levels of Blockchain services enabled."

Today, IoT features remote watching, device automation, and information collection. Within the next few years, an adaptation of this rising technology will have self-governing connected device interactions, and they will be capable of making smart choices on their own without needing any human assistance.

In the future, Blockchain will underpin our economy with Machine-to-Machine interactions. For instance, a smart fridge will be able to comprehend once it's time for replenishing and will automatically make an order and submit payment for the purchased items using virtual cash. It may also negotiate the prices through smart contracts considering the owner's choice while doing that.

Moreover, Blockchain technology, based on predictions, might fulfil the necessities of the IoT-based businesses and become a crucial technology supporting IoT.


To sum up, Blockchain seems to be the most promising technology that will meet the requirements of the IoT industry. It can create uniformity of the applications of IoT across all the sectors worldwide. In this article, we have explored the current trends in IoT and the significant challenges faced by the IoT industry as well as the extent to which Blockchain emerges as a solution to all of them.

In any case, Blockchain and IoT can build secure and reliable infrastructure and assist your business in reducing operational costs and enhancing seamless processes.

To read more about Alibaba Cloud solutions and take advantage of Blockchain in your business, visit https://www.alibabacloud.com/products/baas

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Alibaba Clouder

2,605 posts | 745 followers

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Raja_KT March 9, 2019 at 4:44 am

Well said on the points but I think we can try IOTA too... https://www.alibabacloud.com/blog/iota-the-future-of-iot-and-blockchain_593744?spm=a2c5q.11423531.0.0.6f5864dcQ0mjwJ

Alibaba Clouder

2,605 posts | 745 followers

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