The Internet of Things is a virtual network in which billions of physical devices are connected (these devices are what represent the “things” in the name).
Items like smart TVs, wearable technology, and other smart appliances are all interconnected in the IoT.
They sustain these connections through software, various sensors, and other technological components, and are able to perform data exchange with other devices and systems via the internet.
Given that estimates have projected there to be between 21 billion “things” included in the IoT by 2025, the need for security, and blockchain in IoT security has risen exponentially.
With that said, let’s dive in and explore how blockchain impacts the IoT industry today.
What Does Blockchain Do for IoT?
Blockchain is a type of distributed ledger technology (DLT) that is designed with the following goals in mind:
• Increase data security
• Eliminate massive amounts of record-keeping
• Cut overhead costs in security and transactions across numerous industries
• Streamline supply chains
In the case of IoT, blockchain functions primarily (but not exclusively) as a basis for applications that involve transactions and interactions between users in order to preserve security.
One unique application that is utilized and commended by many is the implementation of smart contracts.
These are scripts that are automatically carried out when specific conditions in the contract are met.
As long as all the conditions are suitable, the contract will self-execute since the terms of the agreement are written directly into the code.
This is the same technology that combats hackers’ knowledge through its advanced encryption features, and at the same time, makes data history more transparent for users.
This is why blockchain is considered immutable by some industry leaders due to its persistence in securities and compliance.
By incorporating blockchain in the IoT, the following can be achieved:
• Distributors can trace back past transactions
• IoT devices will be protected against hacking through encryption and the nature of data distribution within the network
If you want to learn more about some real-life blockchain and IoT projects, just ping us at [email protected].
Blockchain IoT Applications that Overcome Industry Challenges
There are many challenges currently facing the IoT industry.
Operational challenges, along with compliance and security issues, are among the most pressing at the moment.
While blockchain applications, like smart contracts, are meant to streamline the processes between IoT users, they also pose some serious accountability problems. This is primarily due to the fact that these processes are almost entirely automated, and users are unable to control them.
Improvements to blockchain technology help solve these problems by reducing the complexity of such automation by:
• Allowing IoT devices to communicate safely with each other, and
• Inventing new avenues for digital interactions between buyers and sellers (with fewer costs)
We will explore some of those improvements and benefits below.
The Benefits of Blockchain in IoT
There are three key benefits of how the IoT industry today benefits from the implementation of blockchain:
Trust. There will be more opportunities for IoT users to establish trust between their devices and the IoT network. With blockchain technology, the risks of tampering with personal information are greatly reduced.
Cost Efficiency. Costs related to IoT processes and devices are significantly reduced. Users will be removing the middleman and other intermediaries in the IoT industry, getting rid of overhead costs almost entirely.
Speed. Transactions performed via IoT processes will be significantly accelerated. Instead of having to drag settlements out for several days at a time, users will instead experience a near-instantaneous settlement time.
Investments in the development of blockchain solutions are expected to reach $11.7 billion worldwide by 2022.
This is why if there was any time to take advantage of this rapidly growing technology, it is now.
IoT for Commercial Applications
Blockchain IoT has a variety of applications in commercial industries. Whether the market is in retail or automotive manufacturing, this technology has enhanced innovations in many fields.
Retail business owners use blockchain IoT for both present and future applications.
The tech is only in its infancy for this industry, but retail experts are optimistic about many ongoing use cases.
For example, you can see how it is currently being applied to the supply chain management, capturing “data trails” to better monitor the shipments of commercial products. Walmart and IBM are using the tech to manage data concerning food traceability for monitoring foodborne illnesses.
Blockchain IoT is currently being used to verify identity and authenticity in the retail sector as well. This helps to reduce the distribution of counterfeit products and combat instances of theft.
Manufacturers will be able to detect occurrences of trademark infringement and will be alerted when products are duplicated illegally. For further protection, resellers will only be allowed to sell upon verifying ownership to the rightful parties.
You can also see in the automotive industry, that blockchain IoT assists the development of smart technology by integrating sensors and autonomous capabilities in newer models.
Vehicles will be more reliable in their ability to collect and share data between:
• The vehicle owner
• The vehicle’s manufacturer
• Auto shop dealers
With the integration of blockchain technology into IoT processes, users across multiple industries and disciplines will begin to experience strengthened security and improved compliance like never before.
The applications for this technology are seemingly endless.
If your company is in need of assistance in the development of dApps or other blockchain IoT technologies, contact the experts at LimeChain.
We will work alongside you to build the solutions that will keep your transactions, along with all other virtual activities, as secure as possible.