The Benefits IoT Blockchain

The Internet of Things (IoT) is the latest buzzword in technology. It means connecting all types of devices to the internet so that they can exchange data and communicate with a lower barrier of entry. This digital ecosystem is expected to bring many benefits to our lives, including greater efficiency and convenience at work, better healthcare solutions, reduced energy cost, and more efficient use of resources. However, it will entail some challenges as well. A lot of technological challenges require thoughtfully-designed solutions. Though the internet has empowered billions with access to information and communication tools for personal use, it poses serious security threats for individuals and businesses. The IoT could solve many of these issues by decentralizing information through blockchain technology. In this blog post, we'll explore why blockchain is the perfect fit for IoT and other benefits it could have for the latter.

Introduction to IoT Blockchain Technology

The blockchain is a decentralized and distributed digital ledger that records transactions across many computers rather than just one — thus eliminating the need for a central administrator. It is a virtual, public, and electronic record of transactions and stores data across a decentralized network of computers rather than a centralized server. The blockchain is a digital record of transactions that can be programmed to record many things, including digital assets, such as financial investments and medical records, digital currency transactions, records of deeds and ownership, and more. The technology also has the potential to solve many IoT challenges, including security, scalability, efficiency, and privacy.

Example of IoT Blockchain System

Businesses and individuals can shift from centralized control to decentralized recordkeeping through blockchain technology. A prominent example of blockchain in IoT is the VeChain ecosystem. It is a decentralized platform to track products and manage supply chains, eliminating the risk of product counterfeiting or fraud. Now, a car manufacturer or a grocery store can track their products and manage the inventory on this decentralized platform. This can also reduce their cost and increase their efficiency. Similar applications of the blockchain can be found in the field of healthcare. Patients can share health records on a private or public blockchain, and doctors can be verified as trusted authorities. Whereas before, the data was centralized, now it is decentralized and more secure.

Blockchain in IoT Applications

The digital ledger that forms the core of blockchain technology can be used for many applications. Extensive research on the Internet of Things indicates that around 50% of the devices will have blockchain technology by 2020. These will be IoT devices that track devices and manage their data so that they can send data to other devices without the risk of being hacked. For instance, a car manufacturer can use blockchain to manage the data of vehicles. When a car is sold, the manufacturer can track its data and then transfer its data to the new owner on the blockchain. This will reduce the chances of the new owner hacking the car.

Moreover, the new owner can view his/her data through the blockchain and track the car's real-time location. IoT can also solve the issue of data privacy. A health insurance company can create a blockchain system to store users' health records so they can view the data without the risk of their health records being shared with third parties.

Why is Blockchain the Best Fit for IoT?

The main reason blockchain is such a good fit for IoT is that it can create a decentralized ecosystem for data exchange. In the past, data was centralized and vulnerable to hacking. But with blockchain, such data can now be decentralized and encrypted. This can solve the security issues that plague the IoT. Additionally, from an efficiency point of view, blockchain can help IoT devices to operate autonomously. The IoT devices can operate autonomously when blockchain technology powers them. This will reduce the power consumption of the devices, thus reducing the cost of maintenance

Key Benefits of Blockchain for IoT

● Decentralized data exchange - The IoT devices can transfer data on blockchain technology without being hacked. This will ensure that the data is decentralized, making it difficult for hackers to steal it. This will help the IoT devices to operate autonomously.
● Smart contracts - The blockchain system can store smart contracts like conditional agreements that are executed when certain conditions are met. This can help IoT devices self-execute functions like autonomously tracking their data and transferring it to the owners. The blockchain system can also verify the ownership of the data.
● Data storage - IoT devices can store their data on blockchain technology. This will help the devices to operate autonomously.
● Data immutability - The blockchain system can be used to store immutable data. This will ensure that the data is stored so that it can't be altered or destroyed.

Limitations of Blockchain in IoT

Though the blockchain is a good fit for many IoT use cases, it does have some limitations. The main one is scalability. The blockchain ecosystem is scalable only when many users are engaged. This, however, is not the case for IoT. IoT devices are usually powered by batteries or solar energy, which makes scalability a crucial challenge for IoT blockchain systems. The other challenge is the issue of cybersecurity. While blockchain can help with data decentralization and security, it can't protect IoT devices from attacks. In this regard, one solution is to create a firewall that can protect the device from outside hackers.

Key Takeaway

The Internet of Things is expected to bring great benefits to our lives, including more efficient energy use and reduced costs. Blockchain technology can help with these issues by decentralizing and encrypting data. Today, IoT devices powered by blockchain can operate autonomously, be more secure, and store data without being hacked.