IoT In Blockchain: Benefits, Use Cases, and Challenges

IoT In Blockchain

Using blockchain for enhancing IoT data security

Blockchain refers to a system where records of transactions made in Bitcoin or other IoT cryptocurrencies are maintained across several computers — all of which are linked in a peer-to-peer network.

How does the combination of IoT and blockchain work?

Every transaction in the blockchain is verified by multiple sources and entered into a common ledger distributed across every node before preventing disputes and building trust among all permissioned network members.

Top use cases of IoT-enabled blockchain technology

IoT enhances security and transparency in IoT ecosystems. Here are a few famous IoT blockchain use cases that have a significant impact across multiple industries:

Use cases of IoT-enabled blockchain technology

1. Operational maintenance

IoT devices track the state of binding machines for safety and maintenance. From elevators to engines, blockchain offers a tamper-free ledger of operational data.

2. Freight transportation

Moving freight from one place to another is complicated and involves the support of different parties. With the help of an IoT-enabled blockchain, it is possible to store temperatures, arrival times, and the status of shipping containers in transit. Everyone involved in the process can trust the data and take action to move the freight promptly and efficiently.

3. Pharmacy

Our reliance on medicines has increased ever since the pandemic changed our lives. However, the problem of counterfeit products in the pharma industry is on the rise.

4. Smart homes

IoT also plays a vital role in our daily lives. In a smart home, the devices are connected and can be accessed through the central point — a gaming console, smartphone, tablet, or laptop. One can control items such as thermostats, door locks, cameras, home monitors, and kitchen appliances through a single home automation system.

5. Supply chain management

The ability to track components used in aircraft, automobiles and other products is essential for enabling regulatory compliance and safety. The IoT data stored in shared digital ledgers allows all parties to see component provenance throughout the product life cycle. Sharing info with shippers, regulatory agencies, and manufacturers becomes a breeze.

6. Insurance

The process of managing claims, fraud, and property and casualty insurance has improved in many ways thanks to smart contracts combined with IoT data fetched from wearable personal technologies, location-based sensors (home alarms, factories, warehouses), and sensors on objects (shipping containers and vehicles).

Benefits of blockchain in IoT

Every transaction is recorded in a digital ledger — stacked in a data block and included in a secure, immutable data chain that cannot be tampered with. This is what makes the blockchain internet technology such a fantastic option for enabling IoT security. Here are the top benefits:

Benefits of blockchain in IoT

1. Lower costs

Blockchain allows data to be submitted on a peer-to-peer basis without centralizing control. The arrangement lowers business expenses as scaling a highly scalable centralized infrastructure is costly in the long run. Decentralization enables cost-effectiveness to eliminate single points of failure while addressing the scale of IoT.

2. Improved security

With blockchain, you can select the data to be managed, analyzed, personalized, and shared among authorized vendors. Blockchain legitimizes data and ensures it comes from a trusted source. This enhances secure communications by strengthening privacy agreements.

3. Quick data change

Blockchain minimizes the time taken to validate transactions by utilizing trusted nodes and handling the performance requirements of IoT. This fastens the speed of IoT data exchange. It is open, interoperable, and developed for your multi-cloud world.

4. Streamlined finances

For any business, its finance department is of utmost importance. After all, it deals with sensitive data and needs the added transparency provided by IoT and blockchain. It is, therefore, essential to have a set process for sharing or sending money or data across a linear, time-stamped chain. Blockchain not only solidifies the information added to the ledger but ensures no one can access or touch it without permission.

5. Efficient supply chain

An efficient supply chain is every enterprise’s dream. However, economic and global challenges make the process challenging.

Challenges encountered while implementing blockchain in IoT

As discussed previously, ensuring data security is a massive task in a typical IoT ecosystem. That is because its architecture has a centralized client-server model, making it susceptible to a single point of failure — giving rise to cyber hacks.

Challenges encountered while implementing blockchain in IoT

1. Scalability

One of the common issues faced in IoT development is scalability. How can one handle the enormous volumes of data collected by an extensive network of sensors and potentially lower transactional processing latencies? Well, that is a million-dollar question. Defining a transparent data model beforehand prevents difficulties when making the product live.

2. Security risks

To extend the capabilities of an IoT-powered blockchain system, you need to use smart contracts, which can offer efficiency by automating contract administration. However, this results in security risks, which can hamper blockchain adoption in IoT.

3. Sensor reliability

How reliable are the sensors used? They could interfere with correctly measuring the criteria required to execute a transaction. It is essential to take measures to ensure external interventions do not alter sensors and you can create a safe and secure environment for data recording and transactions.

4. Network privacy and transaction confidentiality

The transaction history in the shared digital ledger for a network of IoT-connected devices cannot be granted on the public blockchain. This happens because the transaction pattern analysis is applied to make inferences about the user or device identities behind public keys.

5. Computing power and time required

IoT wants the best possible security from blockchain, which requires the “Proof of Work” (POW) consensus algorithm. The process is not complicated. However, it requires plenty of number-crunching at a fast rapid pace for more extended periods. As a result, computing-intensive operations and associated expenses are disincentives for cyber hackers.

6. Complex IoT and blockchain projects

Since blockchain is a relatively new technology, its integration with IoT solutions may not be as convenient as one would hope for. That is because both technologies need experts with enough knowledge and experience to handle anything that may come their way. Unfortunately, you may not get quality talent in this domain easily, which will invariably affect the projects.

There is always room for growth with blockchain and IoT.

Adopting IoT and blockchain technologies is not as widespread as one would believe. That is pure because of operational challenges and technical concerns.



Techno-commercial leader heading Intuz as head of Strategy.

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