Blockchain and IoT – How can they together bring us bigger Benefits
Referred Link - http://www.aexonic.com/peak-into-our-mind/blockchain-iot-can-together-bring-us-bigger-benefits/
Blockchain and IoT have now become an important aspect of every growing business you see around. The network of IoT devices has been growing exponentially since the past year or so, and with the combination of Blockchain, that holds the power to disrupt any business, the amalgamation of both is sure to bring us a bag of innovative surprises.
To understand the convergence better, let us go through some points that explain how the two technologies can together bring us bigger benefits.
- Blockchain is the missing link to bring privacy, security and reliability to the IoT network of devices
- Blockchain can be used to track billions of connected IoT devices that help in better coordination and processing of transactions
- As Blockchain is a decentralized system, it would eliminate any single points of failure and in the process create a more resilient and sustainable environment for the devices to run
- As the data in blockchain can be encrypted by the use of cryptographic algorithms, it will make the consumer data stored or coming in from the IoT devices safe and private
- In a network of billions of connected IoT devices, blockchain can keep an immutable record of the history of connected devices which helps in the autonomous functioning of the devices without any centralized control.
- The ledger that stores data in the blockchain network is tamper-proof which means it cannot be manipulated by unwanted, malicious agents.
- Blockchain has given a push to Industrial IoT or IIOT which is essential in large organizations which hold millions of sensitive data and carries out hundreds of transactions each day.
To sum up the basic advantage of using Blockchain for IoT –
- Building Trust between the devices and the parties involved, thereby reducing the risk of any fraudulent behaviour
- As it removes the third parties and intermediaries involved, it removes any cost that is related to them
- It makes the transactions quickly and securely, reducing the settlement time from few days to almost instantaneously.
The decentralized, autonomous and secure platform of a Blockchain network makes it an ideal component to be a fundamental part of IoT solutions. We have companies who have adopted the same and are running successfully ever since. However, there are few challenges they face in the process too. Let us have a look at them.
- Operational Challenges – This business model requires many agreements and parties involved, especially in a broader ecosystem. There is also storage issue as the ledger’s size needs to be increased with time. Encryption and cryptographic algorithms on the huge amount of data will require a lot of processing power and time too.
- Legal Challenges – This convergence is new and there needs to be someone to look into cases where actions that are taken by devices on the basis of a rule that is automatically executed by a blockchain-based application or Smart Contracts, triggered by another similar application. This is a complex scenario but can very well come up with the heavy use of blockchain based IoT network.
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