Simply put, Blockchain is a data structure that stores records of transactions in a way that is secure, transparent, and distributed. You can also visualize it as a series of records kept in blocks, with no central authority over them. Blockchains are decentralized, public ledgers that can be accessed by anyone on the network. The information recorded in a blockchain cannot be easily modified after it has been recorded.
However, “IoT,” or The Internet of Things, refers to a system in which various physical objects are linked to the web and to one another, allowing for the autonomous collection and transmission of data. The goal is for the various gadgets to exchange data with one another, send and receive information, observe and interpret behavior patterns, and make the most efficient use of the environment in which they are located.
How IoT Fits Into Blockchain Technology
Even if you don’t believe you’ve truly felt the effects of IoT yet, you can’t deny that it alters our lives as we know them. Significant progress in the Internet of Things space, however, brings with it problems with data and information security. Despite these technological advances, cybercriminals are constantly developing more sophisticated methods of gaining unauthorized access to sensitive information. Example: a healthcare IoT device collects patient data and transmits it back to doctors for analysis; this entire process occurs over the Internet and is thus vulnerable to cyberattack. It opens a door for hackers who would otherwise not be able to access the data to do so.
While the Internet of Things (IoT) and connected devices have limitless potential, they frequently fall short in providing the level of security and authentication required to protect the privacy of users’ data. Better protection for IoT and connected devices must be developed, maintained, and adopted as the norm to keep users safe.
For this reason, Blockchain technology is useful. Blockchain has the potential to monitor sensor data and prevent cybercriminals from using that data to create malicious duplicates. Moreover, the Internet of Things enables direct data and information exchange via a network’s Blockchain, eliminating the need for any intermediate or external system. Data and information breaches are greatly reduced, if not eliminated, by using a Blockchain instead of a third-party system.
Blockchains make it more difficult for hackers to access and take control of that information because they can never be altered or manipulated. Data in a Blockchain can’t be accessed by a single entity because it’s stored in a distributed ledger.
How Blockchain and IoT Work Together
The Internet of Things (IoT) and the blockchain are two sets of technologies with enormous potential for enhancing and streamlining business processes and daily life. Although a new era was ushered in, the actual results fell short. To better monetize existing capabilities and anticipate what customers may want to buy, creatives have been combining these two technologies in novel solutions. Service providers are exploring capabilities for these solutions to add value across applications in use cases where stakeholders need a way to smooth transactions in situations that lack complete trust.
IoT has the potential to unleash waves of process optimization as connectivity improves to support long-range and high-bandwidth applications. While the Internet of Things (IoT) gives billions of devices unique identifiers and network access, it also makes it simpler to monitor and control their operations, leaving them vulnerable to attack.
Complementing IoT rollouts, blockchain technologies can improve data recording, exchange, and security. Through identity verification, device authentication, and data transparency, the safety, and operational risks of distributed (and multiparty) systems can be reduced by integrating blockchain-enabled solutions. Using a consensus record that doesn’t need third-party approval, applications that combine IoT and blockchain can streamline business processes and transactions by optimizing and automating contracting terms and commerce.
Despite its dispersed nature, the Internet of Things (IoT) services ecosystem is highly dependent on one another, with service providers frequently cooperating across different roles. The blockchain solutions landscape is just as disjointed, with a value chain that is equally complex and requires expertise in many other areas.
Blockchain-enabled Internet of Things (IoT) solution markets are dynamic, with new entrants and long-standing players constantly entering and leaving the field. After much hype, enterprises are figuring out where blockchain adds more value than a standard database.
Today various Blockchain IoT app development companies are using advanced technologies to get the best results for their organization.
Benefits of Integrating IoT with Blockchain
Blockchain and Internet of Things (IoT) technology come together in the blockchain IoT market. The rapid expansion of the global information infrastructure has contributed to its rising profile. Additionally, the blockchain utilizes the IoT platform using a peer-to-peer network to guarantee openness and safety, powered by cryptographic encryption and decentralized networks.
Security
Security is one of the biggest obstacles to widespread IoT adoption. Our minds are still fresh with the recent reports of Amazon collecting user data by having Alexa listen to one’s every utterance. Some hackers have found ways to disable vehicles remotely. Intentionally harmful actors have attempted and been successful in taking command of implanted cardiac devices. When this happens, Blockchain could help IoT out a little bit. This will add another layer of protection to the IoT, making it much more challenging for hackers. If getting through the security checkpoint takes too long, law enforcement will have no trouble catching the perpetrators.
Privacy
The robust data encryption standards that Blockchain employs are its defining characteristic. Using a two-factor cryptographic key, the data is stored in a secure and auditable location. One of the biggest benefits of making the switch to Blockchain is that data can only be accessed using both public and private keys. When implemented in the Internet of Things, smart devices can keep track of their interactions in a way that makes it impossible for unauthorized parties to steal or otherwise exploit private data. In addition, information added to a Blockchain cannot be altered after it has been added. Therefore, the IoT device’s security is completely impenetrable.
No Centralized Data Warehouse Required
At this point, it should be clear that Blockchain employs stringent measures to ensure that data is encrypted and stored securely. Therefore, there is no requirement for a central authority to store all data when the history of all smart devices is encrypted in this way. In a standard IoT network, this adds to the sense of confidence in the reliability of the devices. If you use a Blockchain, you won’t need to keep as many funds on hand to maintain a single, centralized warehouse. Therefore, everybody wins.
Smart Contracts
Smart contracts are based on the idea that agreements can be made using the same level of security as blockchains. By encoding logic, this contract will be carried out only if and when certain criteria are met. All of the specifics will be worked out between the two parties involved. To accomplish this, a secure and irrefutable audit trail is set up.
Corporate Administration
There is no limit to what can be accomplished in industry and manufacturing with this combination of technologies. Let’s use the oil industry as a straightforward illustration. Any information in this field is crucial, and its misuse (via hacking or otherwise) could pose a serious threat to national security. The introduction of smart devices is made possible, and data security is guaranteed with Blockchain. Now that all of the devices are talking to one another, the plant can automatically make adjustments to its operations based on the data it collects from its weather sensors. Because of this, incorporating Blockchain technology into a traditional IoT network can result in significant improvements. This would increase profits for the oil industry as a whole. This is merely an illustration, and its usefulness extends to every sector.
Supply Chain Management
Let’s look at yet another illustration to see what I mean. This technological partnership encompasses the entire food distribution chain, from farmers to grocery store shelves. Therefore, each entity along the food chain, from growers to processors to distributors to retailers, is a “node” in the Blockchain. IoT-based sensors now check the food’s condition at regular intervals. At any point in the supply chain, unauthorized additions of pesticides, insecticides, or food colorings can be detected, and measures are taken to prevent the tainted product from reaching the consumer. In a traditional setup, pinpointing where in the supply chain the contaminant first appears would take around a week. The same will be reduced to an unprecedented 2.2 seconds thanks to the technological partnership of Blockchain and the Internet of Things.
Final Thoughts
The Internet of Things (IoT) and blockchain are the waves of the future when it comes to smart home technology. Adopting blockchain technology in IoT has the potential to not only protect the IoT ecosystem in the home but also to usher in a new era of immersive smart entertainment and other far-reaching uses.
While there are obstacles to integrating blockchain with the current IoT system, doing so will pave the way for a more trusted, secure, and efficient third generation of the Internet.