Blockchain is a popular technology. And the reaches of this technology go far beyond what is covered by cryptocurrencies and Bitcoin. Blockchain brings with itself the ability to create a more transparent and fair business world. This type of business world would save both time and money, along with other precious resources.
To further add on to the good news, we can observe these effects of blockchain on almost all sectors and industries of the business world. All of this sounds extremely good and beneficial. But now imagine, what if all these advantages of blockchain could be mixed with other upcoming technologies that have great potential?
This is exactly what happened when the concepts of blockchain and the Internet of Things (IoT) were brought together. According to experts, blockchain holds the potential to empower the Internet of Things devices. This would enhance security features. It would also improve the level of transparency that exists in the IoT ecosystem.
According to the International Data Corporation (IDC), it has been estimated that in the next few years, 20% of all IoT deployments will enable solutions based on blockchain. This is mainly due to the fact that blockchain provides a scalable and decentralized environment to IoT devices, applications, and platforms.
Currently, there are many businesses across the globe that are blockchain with the Internet of Things. In this article, we will be exploring blockchain, and the Internet of Things can complement one another. We will also be discussing some use cases. But first, let’s begin by taking a brief look at what blockchain and the Internet of Things mean.
In the simplest terms, blockchain can be defined as a database that is known for maintaining a continuously growing set of data records. This technology is distributed in its nature. This means that there is no single ‘master’ computer that holds the entire chain. Instead, all the participating nodes or the participants have a copy of the chain. Also, it is important to note that blockchain is constantly growing. The data records are only further added to the chain.
Apart from all this, there are also two major elements of blockchain. Those elements are discussed below.
These elements are created by the participants of the blockchain.
On the other hand, records are the elements that track the transactions. These elements make sure that the blockchain is in the correct sequence. It ensures that the blockchain has not been tampered with. When transactions are added to the blockchain, a timestamp is also recorded for the same.
When it comes to blockchain, then there are many advantages that one can experience from using this technology. One of those biggest advantages is the fact that it is public. This means that everyone who is participating in the blockchain can see the blocks and the transactions that are stored within them.
It is important to note that the actual content of transactions is not visible to everybody. This content is protected by the private key of the owner of that information. Another great advantage of blockchain is that it is decentralized.
By decentralization, we mean that there is no single authority in the blockchain. This means that no single authority can approve the transaction or set specific rules for the acceptance of transactions. This points to the fact that there is a huge amount of trust involved, as all participants need to reach a single consensus.
The best part of the blockchain technology is that it is secure. This is because of the fact that the transactions can never be practically altered. The database can only be extended. And even if somebody decides to alter the previous records, then he or she would have to pay a very hefty price.
IoT or the Internet of Things is a system of interrelated computing devices, digital machines, and other mechanical products. All devices in the system are provided with unique identifiers or UIDs. These unique identifiers carry the ability to allow one to transfer data over a wide network. This can be done without requiring any sort of contact between humans or humans and machines.
The Internet of Things is one of those technologies that has been influenced by a number of different fields, including commodity sensors, machine learning, real-time analytics, embedded systems, control systems, and wireless sensor networks. In the commercial world, IoT is most often considered to be synonymous with the concept of ‘smart homes.’
The Internet of Things is not an ideal technology. This means that it comes with its own set of challenges and concepts. Some of those concerns include issues related to privacy, scalability, and reliability. Blockchain provides the missing link to solving all of these issues.
Blockchain technology can be used by individuals to track a large number of connected devices. This would enable an organization to process transactions and coordinate effectively with all the devices. This would save a ton of money for the IoT industry manufacturers.
Apart from this, the use of blockchain will also introduce a decentralized approach to the Internet of Things. This would help in getting rid of the single points of failure. It would create a more resilient ecosystem that devices can use to run on. The data on devices can also be made more private as cryptographic algorithms are used on blockchains.
In IoT, there is also the danger of being attacked by other parties. This threat can be removed by making the ledger tamper-proof. This would be the result of the fact that the ledger will not exist in one location. Hence, attacks cannot be staged as there is no single thread of communication that can be intercepted.
Blockchain also allows for trustless and peer-to-peer messaging. This feature has worked wonders in the financial world through the use of various cryptocurrencies like Bitcoin. It also provides a guaranteed peer-to-peer payment service network that does not require any interference from a third party.
If you look at all of these benefits, then it should not be surprising to acknowledge the fact that the Internet of Things was one of the first technologies to incorporate blockchain. Blockchain allows IoT devices to function autonomously without the need for any central authority.
Till now, we have discussed what blockchain and the Internet of Things mean. We have also looked at how blockchain and the Internet of Things can be used together. So, you must have an idea regarding why these technologies work so great together.
Moving on, in this section, we will be looking at some of the real-world use cases of blockchain and the internet of things. Some of those real-world use cases are mentioned below
You must already be familiar with the fact that any global supply chain network usually involves a number of different stakeholders, including brokers and raw material providers. This complicates the end-to-end visibility. Further, the supply chain could extend to months and include a number of payments and invoices.
All of these factors can cause delivery delays. Hence, it is important for organizations to track the progress of products. This is done by making the vehicles IoT enabled. Combining blockchain with this can increase the reliability and traceability of the network.
This basically works by collecting information from IoT sensors like motion sensors, GPS, and temperature sensors. This information is stored in the blockchain. After that, stakeholders can get access to that information.
If you have been keeping up with the world, then you must know that digitization is the current demand. If an organization wants a winning edge, then embracing technology is their best bet. This also applies to the automotive industry. Currently, automotive industries are using IoT enabled sensors.
These sensors help in developing fully automated vehicles. Connecting those automated vehicles with blockchain would allow various users to exchange vital information effectively. This combination of technologies can also disrupt automated fuel payments, smart parking, autonomous cars, and automated traffic control.
In the last few years, people have warmed up to the idea of using smart devices in their homes. And now, those IoT enabled devices are an integral part of life. But what most people don’t know is that blockchain enables the smart systems to be managed remotely from the smartphones of the users.
This was a huge improvement over the traditional ‘smart’ devices that took up a centralized approach. Those devices lacked proper security standards and ownership of information.
IoT and blockchain also have other use cases in industries like pharmacy, agriculture, water management, and sharing economy.
Earlier in this article, we mentioned how organizations need to have a competitive edge to win the race. This competitive edge can only be achieved by welcoming new technological developments with open arms. This also stands true for organizations that wish to embrace the applications of IoT and blockchain.
It is suggested that organizations and businesses should take inspiration from pre-existing IoT and blockchain use cases. They should start small and try to establish a footing. After that, one might move on to bigger projects and better applicability.