Fortune Business Insights suggests that blockchain can help alleviate the scalability and security concerns associated with IoT device connectivity. An IoT system is a network of connected devices that gather and exchange data over the Internet. It needs an eligible platform that provides a common language to allow these connected machines to communicate effectively. Several companies have already developed IoT connectivity platforms based on blockchain technology. Blockchain helps make the IoT network secure, flexible, and efficient.
Decentralized Management System
Blockchain ensures data privacy and security on all devices connected to the IoT network. With distributed ledger technology (DLT), security breach becomes extremely difficult, or even impossible. A hacker would have to go through every block in the chain to break into the entire IoT network.
How IoT Works
IoT devices collect information through sensors embedded in everyday objects like thermostats and water sprinklers. They send this data to the IoT platform for processing. The IoT platform analyzes the data and sends it to another device on the network to initiate a specific function. For example, when a smoke detector senses the presence of smoke inside a room, it sends a signal over the Internet to sound the alarm in the entire building and call the fire department.
Benefits of Blockchain
Data privacy and security become crucial concerns when it comes to sharing personal information over the Internet. Medical and financial institutions are the cyberpunk’s favorite targets. It is easy to breach a traditional IoT system because it stores all critical data in one central hub. Blockchain technology prevents this security breach by providing a decentralized management system for all these collected data.
The Efficiency of Smart Contracts
The use of smart contracts not only strengthens the security of data in the IoT network. It also allows for fast and efficient processing of transactions between each connected IoT device. It eliminates the need for an intermediary to manipulate the exchange of information.
How Smart Contracts Work
Smart contracts are small sets of code stored in each block on the blockchain. They contain the conditions required for each device to access the information needed to complete a transaction or task. A connected IoT device must meet these conditions and verify the agreement before getting permission to use the data.
Benefits of Smart Contracts
Since smart contracts are digital, they help speed up the processing of transactions. It also cancels the possibility of errors usually committed when using traditional paper contracts. Furthermore, the absence of a third party to handle the transactions gives users the peace of mind that their personal information remains safe and secure.
Customizable Templates for Business
Programmers call a blockchain a set of protocols and cryptographic methods. These codes allow connected devices to create a secure record of data that they can share in an open database. For business enterprises, it is a digital ledger of transactions duplicated and distributed across an entire network.
Popular Blockchain-base Platforms
Any software developer can program a blockchain. Some organizations even provide customizable templates and online tools to develop blockchains for business. Many popular business establishments use blockchain-based IoT platforms to improve their business operations. The multinational and electronics engineering company, Bosch, set this trend when they tweeted about their partnership with IOTA.
Three Elements of a Blockchain
A single block on the blockchain consists of three types of data. The hash code is a string of characters that uniquely identifies a specific block. Then, there is the data that contains the relevant information necessary for the transaction. The smart contract also comes into each block on the blockchain.
Is Blockchain Technology Viable for IoT?
Blockchain-based IoT platforms may offer promising solutions for secure and efficient IoT device connectivity. However, the technology still has several hurdles to cross. Software developers and business executives must also consider these future challenges when considering IoT platforms.
Suitable Platform
Because IoT devices collect a massive amount of data, blockchain IoT networks may not face challenges coping with such a large volume over time. Fortunately, IOTA already went ahead in the game with their Tangle platform. Other well-known blockchains like Bitcoin and Ethereum may still not be suitable for IoT device connectivity.
Unsecured IoT Device
Decentralized ledger technology in blockchain networks may brag about its undeniable data encryption method for protecting critical information. Yet, a hacker may also try to tinker on your IoT device instead. These gadgets also need security to keep the bad guys from tampering with them.
Flexible Software
Integration places a big challenge on developers to create an interoperable IoT platform. There goes the risk of revealing the operational message into the distributed ledger in the blockchain. On the other hand, the IoT platform may also become an isolated network incapable of communicating with other devices not designed for it. Programmers must work hard to develop a flexible IoT device connectivity platform.
Legal Terms and Conditions
A terrible threat comes along with blockchain technology on IoT-connected medical devices. Digital contracts may protect the device from illegal use of data from hackers. However, the codes may also trigger an action on the device that can cause harm to the patient instead. IoT device manufacturers must set the terms and conditions outside of the digital space. Someone has to take responsibility in case of a device malfunction.
Conclusion
Blockchain is yet an evolving technology. As the demand for IoT systems continues ascending, software companies and developers constantly learn new ways to create an improved IoT device. It may be too early to dismiss the potential of blockchain architecture on IoT device connectivity.
Large companies that use blockchain architecture on IoT device connectivity can give hope to the future of decentralized IoT networks. There may be several challenges to overcome, but it is still possible to build an efficient, flexible, and secure IoT platform using blockchain technology. New types of blockchains may come up to answer these demands of the Internet of Things. The world is yet to see the most outstanding innovations in the IoT industry.
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