The world of technology is in a perpetual state of evolution, and at the forefront of this digital revolution are two game-changing technologies: Blockchain and the Internet of Things (IoT). In this blog, we will explore how the fusion of Blockchain and IoT is reshaping industries, enhancing connectivity, and revolutionizing security.
The Convergence of Blockchain and IoT
Blockchain, at its core, is a distributed ledger technology known for its security and transparency. It ensures that data is tamper-proof and immutable, making it an ideal platform for recording and verifying transactions. IoT, on the other hand, is a network of interconnected devices that collect and exchange data. When these two technologies converge, they create a powerful synergy with the potential to disrupt various sectors.
Revolutionizing Connectivity with IoT
IoT has already transformed the way we connect with devices and gather data. From smart thermostats that regulate home temperatures to wearable fitness trackers that monitor our health, IoT devices have become an integral part of our lives. However, traditional centralized systems for managing IoT data have their limitations, including security vulnerabilities and scalability challenges.
Enhancing Security with Blockchain
This is where Blockchain steps in to enhance security. By leveraging its decentralized architecture and cryptographic features, Blockchain provides a robust solution for securing the vast amount of data generated by IoT devices. It ensures that data is not only secure but also accessible only to authorized users.
Applications of IoT and Blockchain
Moving freight is a complex process involving different parties with different priorities. An IoT-enabled blockchain can store the temperatures, position, arrival times, and status of shipping containers as they move. Immutable blockchain transactions help ensure that all parties can trust the data and take action to move products quickly and efficiently.
Component Tracking and Compliance
The ability to track components that go into an aircraft, automobile, or other products is critical for both safety and regulatory compliance. IoT data stored in shared blockchain ledgers enables all parties to see component provenance throughout a product’s life. Sharing this information with regulatory agencies, shippers, and manufacturers is secure, easy, and cost-effective.
Log Operational Maintenance Data
IoT devices track the state of safety for critical machines and their maintenance. From engines to elevators, blockchain provides for a tamper-free ledger of operational data and the resulting maintenance. Third-party repair partners can monitor the blockchain for preventive maintenance and record their work back on the blockchain. Operational records can also be shared with government entities to verify compliance.
Supply Chain and Logistics
A global supply chain network involves many stakeholders, such as brokers, raw material providers, and more. This complicates end-to-end visibility, leading to delivery delays. IoT sensors, including motion sensors, GPS, temperature sensors, and vehicle information, can provide crisp details about shipments' status. This sensor information is then stored in the blockchain, granting stakeholders real-time access through smart contracts. This enhances network reliability and traceability.
The automotive industry is embracing IoT-enabled sensors to develop fully automated vehicles. The combination of blockchain and IoT can disrupt automated fuel payment, autonomous cars, smart parking, and automated traffic control. Companies like NetObjex are reshaping the industry by providing smart parking solutions using blockchain and IoT.
IoT-enabled devices play a crucial role in our daily lives, but the centralized approach to exchanging information lacks security standards and data ownership. Blockchain can elevate smart homes by solving security issues and removing centralized infrastructure. Telstra, an Australian telecommunication and media company, is using blockchain and biometric security to improve the security of smart homes.
Blockchain and IoT are transforming the sharing economy, allowing the creation of decentralized, shared economy applications. Slock.it is using blockchain technology for sharing IoT-enabled objects or devices, creating a secure online market of connected things. Smart contracts ensure data privacy and transparency.
Industry Counterfeit medicines are a growing concern in the pharmaceutical sector. Blockchain's transparent and traceable nature can help monitor the shipment of drugs from origin to the supply chain destination. Mediledger is a blockchain IoT use case designed to track the legal change of prescription medicines' ownership, ensuring transparency and traceability.
Blockchain coupled with IoT has the potential to reshape the food production industry, from farm to grocery to home. Installing IoT sensors in farms and sending their data directly to the blockchain can enhance the food supply chain. Pavo is a blockchain IoT use case that brings transparency to farming, allowing farmers to enhance techniques and providing distributors, retailers, and consumers with informed decisions.
Efficient water management is critical. IoT sensors like Aquai's Puck track water usage and automate shutdown in case of leaks. Blockchain enhances data monitoring and storage, contributing to responsible water management.
Statistics on IoT Growth
According to IHS Markit, a source of critical information consisting of 5,000 analysts, data scientists, financial experts, and industry specialists, the figure will grow to 125 billion installed IoT devices by 2030. McKinsey & Company, another international management consulting firm, estimates that IoT will have an $11.1 trillion impact on the global economy by 2025.
How effective is Blockchain in the IoT sector in overcoming centralized bottlenecks?
Blockchain at its core is a cryptographically secured, distributed ledger that allows for the secure transfer of data between parties.
Traditional IoT systems are dependent on a centralized architecture. Information is sent from the device to the cloud where the data is processed using analytics and then sent back to the IoT devices. With billions of devices set to join IoT networks in the coming years, this type of centralized system has very limited scalability, exposes billions of weak points that compromise network security and will become incredibly expensive and slow if third-parties have to constantly check and authenticate each and every micro-transaction between devices.
Smart contracts in blockchain networks will allow devices to function securely and autonomously by creating agreements that are only executed upon completion of specific requirements. It not only allows for greater automation, scalability, and cheaper transfers (no third-party needed to oversee transactions) but these smart contracts can also prevent overrides by individuals that want to use the data for their own benefit. Information is shared across a decentralized, cryptographically secured network, meaning it becomes very difficult to compromise the network security.
Finally, with a centralized network, the risk of a single point of failure disabling an entire network is a very real possibility. A decentralized blockchain network mitigates this risk with millions of individual nodes that transfer data on a peer-to-peer (p2p) basis to keep the rest of the IoT network running smoothly.
Known Blockchain-IoT Platforms
Several blockchain platforms focusing on IoT are emerging as the industry gets bigger.
One of the first blockchain IoT platforms, designed specifically for the Internet of Things, providing a transaction settlement and data transfer layer for connected devices. IOTA has also entered into several important partnerships, including Bosch, Fujitsu, and Volkswagen.
The Hyundai Digital Asset Company (Hdac) is applying blockchain technology to quickly and effectively communicate, and handle identity verification, authentication, and data storage between IoT devices. The system incorporates a double-chain system (public and private) to increase transaction rate and volume.
A global enterprise-level public blockchain platform, focusing on advanced IoT integration in cold-chain logistics and luxury goods tracking. It also enables end-to-end tracking of production processes of medical devices.
Created through a combination of RFID and blockchain technologies for effective IoT integration. They primarily focus on tracking processes and products in the supply chain.
An open-source blockchain infrastructure to power the world’s data economy and to give people back control of their own information. It can be implanted into everyday objects to record data including traffic, potholes, and local fuel prices.
This is just a small sample of blockchain-based IoT platforms, and the list keeps on growing as the industry evolves.
Challenges to overcome for Blockchain in IoT
Great strides in development have been made in this area, but blockchain’s application in IoT is far from perfect and several key challenges will have to be overcome before we will see the complete benefit of blockchain in IoT be realized.
Scalability: Can blockchain networks cope with the sheer volume of data that is expected to be produced by IoT devices in the next five to ten years without slowing down transaction speeds or the flow of data?
Security: Decentralized blockchain networks provide a high level of security, but what level of weakness (if any) do the IoT devices create at the point where they connect to the network?
Interoperability: Cross-chain interoperability will have to be addressed and improved if we truly want to leverage the benefits of interconnected smart devices.
Legal, compliance, and regulation: The allocation of responsibility will have to be closely examined. How smart contract actions are regulated in the world outside of blockchain will also have to be stipulated.
Considerations for the adoption of Blockchain and IoT technologies
As explained previously, a fundamental problem with current IoT systems is their security architecture, with a centralized client-server model managed by a central authority which makes it susceptible to a single point of failure. Blockchain addresses this problem by decentralizing decision-making to a consensus-based shared network of devices. However, when designing the architecture for IoT devices in conjunction with a blockchain ledger, there are three main challenges to consider:
Scalability: One of the crucial difficulties still faced by IoT is one of scale - how to handle the massive amounts of data collected by a large network of sensors and potentially lower transaction processing speeds or latencies.
Network privacy and transaction confidentiality: The privacy of transaction history in the shared ledger for a network of IoT devices cannot be easily granted on public blockchains.
Sensors: The reliability of IoT sensors could potentially be undermined by interfering with the correct measurement of the criteria that need to be met to execute a transaction.
The combination of Blockchain and IoT holds immense potential to revolutionize various industries by enhancing connectivity and security. While challenges remain, ongoing developments and partnerships indicate a promising future for this powerful duo in shaping the way we interact with technology and data.
Partner with Seven Bits Technologies:
If you're ready to explore the potential of Blockchain and IoT or need guidance on implementing solutions, partner with Seven Bits Technologies. With over a decade of experience in blockchain development, we can help you navigate this transformative journey and unlock the full potential of these technologies. Contact us today and embark on a journey toward a connected and secure future.
With over a decade of experience in blockchain development, Seven Bits Technologies is your trusted partner in harnessing the power of blockchain and emerging technologies for your business. Our team of experts provides end-to-end blockchain solutions, from concept development to deployment and maintenance.