What is Blockchain and How is it Enhancing the Internet of Things (IoT) Adoption?
The ever-changing information and communication technology (ICT) developments have improved the evolution of intelligent devices and integrated data-driven decision-making solutions. These developments have helped the Internet of Things (IoT) to play an imperative role in connecting the physical world to cyberspace. It has made IoT systems capable of supporting various industrial applications ranging from logistics and manufacturing to healthcare and utilities.
One technology that helped in the advancement of IoT to such a level is blockchain technology. Blockchain technology’s central element is a technological protocol that allows data to be transferred between various devices on a single network. The data is transferred by eliminating the need for intermediaries as the devices on the network communicate with encrypted connections and are straight with each other. Every interaction is then combined into a perpetual transaction string and administered to every network connection.
What is a Blockchain?
Blockchain is a distributed ledger spreading over the whole shared system. With the equal transfer of authority among devices, blockchains can facilitate a transaction and be approved in a respective individual system without any interference from a third party.
Unlike the current transaction-management methods where the supervisor needs to approve the transaction. It can perform each transaction’s decentralized approval, saving expense and decreasing the performance bottleneck. Moreover, all the transactions are stored in blockchains and are typically permanent because each node in the network keeps all the active transactions in the blockchain.
Also, all the transactions in blockchains are accountable to the user with a detailed timestamp. Blockchain is an essential complement to IoT with enhanced privacy, interoperability, agility, and reliability.
Opportunities Of Integrating Blockchain With IoT
IoT devices and systems are encountering several difficulties, such as heterogeneity of IoT systems, inadequate interoperability, resource limitations, and security vulnerabilities. Blockchain technologies can enhance IoT solutions with enhanced interoperability, privacy, faster data transfer, and security. Furthermore, blockchain can also improve the agility and scalability of IoT systems, therefore supporting more devices on a single network. This integration of blockchain with IoT can also be called BCoT. Blockchain IoT has potential advantages in contrast with the traditional incumbent IoT systems.
Enhanced interoperability of IoT systems
Blockchains can essentially improve the interoperability of IoT systems by transforming and storing IoT data into blockchains. Different types of IoT data are transferred, analyzed, extracted, and compressed during this method. And eventually accumulated in blockchains. Furthermore, the interoperability of the IoT systems is shown by seamlessly sharing via various kinds of fragmented networks. This is possible because blockchains are established above the P2P overlay network that carries unlimited internet access.
Improved security of IoT systems
On the one hand, IoT data can be secured by blockchains since they are stored as blockchain transactions that are encrypted and digitally signed by cryptographic keys (e.g., elliptic curve digital signature algorithm). On the other hand, integrating IoT systems with blockchain technologies (like smart contracts) can help improve the security of IoT systems by automatically updating IoT device ﬁrmwares to remedy vulnerable breaches, thereby improving the system security.
Traceability and Reliability of IoT data
Blockchain data can be identiﬁed and veriﬁed anywhere and anytime. This is because every historical transaction accumulated in the blockchains is verifiable. For example, a company has developed a blockchain-based product traceability system, which provides suppliers and retailers with traceable services. Through this method, the authenticity and originality of the designs can be checked and approved. Moreover, the immutability of blockchains also assures the reliability of IoT data since it is nearly impossible to alter or falsify any transactions stored in blockchains.
Autonomic interactions of IoT systems
Blockchain can help interconnected IoT devices or systems communicate with each other automatically. For example, the proposed Distributed Autonomous Corporations(DACs) work to automate transactions in which nontraditional roles like governments or companies are involved with the payment. Being implemented by smart contracts, DACs can work automatically without human intervention, consequently saving costs.
Applications of Blockchain of Things (BoT)
Nowadays, there is an increasing trend in applying blockchain in IoT since blockchain technologies can help solve several challenges faced by IoT. Not only in industrial IoT but blockchain has also been widely accepted in almost all domains where IoT is utilized. The wide diversity of applications in blockchains ranges from intelligent manufacturing and internet of vehicles to unmanned aerial vehicles and maritime IoT services.
- Smart Manufacturing
- Health care
- Supply chain management
- Smart grid
Blockchain technology can potentially improve innovations in bringing fundamental developments for an extensive range of industries, industry models, and operating processes. Such as financial, healthcare, and enterprise. Concerning the technical complexity and lack of knowledge of these innovative solutions. This technology, like several of the previous disruptive technologies, will gain acceptance over time. It is, therefore, less of an issue of whether Blockchain will establish itself as dominant in IoT. But instead, enterprises must focus on the different areas that blockchain must be utilized. The current focus of Blockchain technology is primarily on using it to validate, execute and store transactions. That is why its development has been mainly driven by the financial industry and is now spreading across other markets as the combined value of Blockchain and IoT increases. Several companies are sure to embrace this technology in the post-covid era.
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