The concepts of IoT (internet of things) and blockchain are not that new, but they’re stirring people’s curiosity since their complexity can make it more difficult for the public to adopt them fully. Still, IoT is everywhere around us, and it has changed our lives forever, so how would it be for this innovative communication network to unite with blockchain technologies?
Both of them have common features since they help connect people and offer opportunities for creation. But these technologies have limitations that hinder future developments, even though it may be possible to compete with each other in terms of scalability and security. And if such issues are solved, IoT blockchain solutions can become the new business strategy for any industry. Let’s see how that can be possible.
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What does IoT have to do with blockchain technology?
First, let’s have a short theory introduction. The internet of things represents computing device systems that provide unique identifiers (UIDs) to almost anything physical to transfer data over a network without the need for human-to-computer interaction. In other words, anything that has built-in sensors, implants, or biochips can have an assigned IP address through which information is carried on. Such technology is mostly used in (but not limited to) manufacturing, transportation and utility businesses. IoT can help monitor business processes remotely, saving time and money, increasing productivity and generating more revenue.
On the other hand, blockchain technology is mostly used within the cryptocurrency market. Still, it recently extended to health companies and other businesses where data storage and security are the most important. It can be defined as an advanced database mechanism that supports transparent information sharing. The data is stored in blocks that eventually link together in a chain and provide the network with an unalterable and immutable method of tracking everything. However, the information cannot be deleted or modified, which provides unbreakable security and safety for businesses.
Blockchain technology can improve IoT
Together, these systems can become powerful and create a unique new technology that companies can integrate within their culture. For example, since the IoT network can process multiple data transactions on devices owned by different organizations, it may be challenging to pinpoint the source of a potential cyberattack. At the same time, since it generates a vast amount of data, ownership is not always properly assessed. So, blockchain technology can eliminate these issues through:
- Providing transparency, where any authorized contributor can access the network and track past transactions, so there’s no risk of missing out on a data leak;
- Contributing a higher level of encryption as the base of another layer of security;
- Enabling faster transactions among multiple connected devices;
- Reducing costs by eliminating IoT gateway protocols;
Besides these advantages, blockchain provides a safe way for adopting cryptocurrencies in companies’ transactional processes, which is why some have already started crypto adoption. So, if you’re interested in how the crypto market works, you could start by looking at how the prices change on Binance. Other metrics are also essential to acknowledge regarding crypto businesses, so you’ll know if this change could be beneficial for your company or not.
Considerations regarding the adoption of blockchain and IoT technologies
Although IoT security issues might be solved through blockchain solutions, there are three other concerns regarding this merge:
- How will the massive amount of information be handled without lowering transactional processing speeds?
- How can a shared ledger for an IoT device be distributed on public blockchains?
- How can IoT sensors remain reliable when transactions need to be considered?
Of course, these issues don’t interfere with the adoption. Still, there’s little research and testing on how these technologies’ features would work together efficiently, so we should not expect this to emerge too soon. Besides these considerations, the benefits of combining these two mechanisms include the following:
- Accelerated data change since permission-based blockchain features can handle the IoT performance requirements;
- Lower costs since data are submitted on a peer-to-peer basis without centralized control;
- Improved security by strengthened privacy agreements and secure communications;
- Streamlines accounting through a reliable chain of transactions;
- A more efficient supply chain since fees are paid faster, and the blockchain is the one that validates transactions;
Examples of IoT blockchain businesses
Still, some companies broke these barriers and created successful products and services. For example, Helium is a company that connects small IoT machines to the internet. Its blockchain-based internet infrastructure relies on radio technology to reduce the electricity used for powering such intelligent devices. The Helium blockchain provides an easier way to mine through radio technology, so there’s no need for expensive computational power, making it more accessible to the public.
Another mentionable example is Chronicled, a business that combines blockchain and IoT technologies for delivering supply chain solutions. They focus on the pharmaceutical and food supply industries and use IoT-enabled shipping containers and sensors that provide real-time updates on the shipping progress. This method allows all involved parties to check the chain of custody or upcoming issues during the process. Chronicled is among the few businesses that developed a technical pilot that registers all supply chain events on the blockchain, where all industry data is considered.
Finally, we have NetObjex, the business that created a decentralized mechanism for IoT devices to communicate with each other. The company has enabled a blockchain that uses IoToken for drone delivery, for example, where you can mark a point of delivery and verify the payment. NetObjex has also partnered with another company to create a Smart Mobile Phone Charging Station technology, where people charge their phones while watching a short informational video and taking a survey to improve the quality of the service.
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From what we know, IoT and blockchain can complement each other, but there’s still too little input on merging these two technologies. Some companies have already started using them to create unique products and services. However, since IoT and blockchain are advantageous, we expect more businesses to adopt them and come up with innovative ideas. What do you think?