Блокчейн и интернет вещей: 10 примеров умного будущего

What Is Blockchain and the Internet of Things?

Blockchain and the Internet of Things (IoT) refer to the integration of two revolutionary technologies to enhance data management and security in the digital landscape.

Blockchain, a decentralized and cryptographic ledger, ensures secure and immutable record-keeping, while IoT encompasses a network of interconnected devices that collect and share data.

The purpose of integrating Blockchain and IoT is to create a system where IoT devices can perform transactions and interact without the need for a centralized authority, effectively increasing efficiency, transparency, and trust.

By merging the real-time data collection capabilities of IoT with the secure and transparent nature of blockchain, it can enable a myriad of practical applications across sectors, from supply chain management to healthcare, creating safer, more efficient, and more responsive digital ecosystems.

Adoption barriers

Although both tech innovations possess immense potential, integrating them involves significant technical and design challenges:

Scalability

Public ledgers have limits on transaction processing speed and data storage. With billions of connected devices expected, the scalability of a decentralized database becomes a serious concern. Solutions like sharding, state channels, and directed acyclic graphs are being explored.

Interoperability

There are many competing decentralized platforms and protocols. Getting different implementations to interact seamlessly is difficult. Standards organizations are defining frameworks to enable interoperability.

Energy usage

The proof-of-work consensus is energy-intensive. Newer protocols like proof-of-stake and proof-of-authority dramatically cut energy needs.

Smart contract security

While smart contracts enable automation, bugs can lead to exploitation. Rigorous testing, audits, and formal verification techniques are indispensable to minimize vulnerabilities.

Privacy tradeoffs

Public ledgers offer transparency but lack privacy. Private ones provide more control over data sharing but reduce decentralization. Balancing transparency with privacy is vital.

Talent shortage

Both tech innovations still have a long way to develop and strengthen their capacities. Therefore, more skilled specialists are needed. Investing in training and partnerships is essential to assemble competent teams.

Immature ecosystem

Standards, tools, and infrastructure for blockchain in the IoT haven’t been fully elaborated yet. Production deployments will take time to stabilize and optimize. But the pace of innovation is rapid.

Overcoming these barriers will require continued research and development.

Decentralization of IoT Networks as a Solution

Having a peer-to-peer communication model instead of the standard server/client one can be the sustainable solution the IoT industry is looking for. Peer-to-peer communication will reduce the costs of installing and maintaining expensive servers.

Moreover, computation and storage needs will be distributed across millions of IoT devices and no central failure will result in failure of the whole network.

In order to work, a peer-to-peer solution needs to enable peer-to-peer messaging, distributed file sharing, and autonomous device coordination.

Decentralization of IoT Networks as a Solution

However, the major challenge with peer-to-peer networks is security. The peer-to-peer network needs to offer both privacy and security. It also needs to make sure it is tamper-proof and that there is no room for theft or spoofing.

This is where the use of blockchain in IoT can help the IoT industry scale up in a sustainable way. In fact, blockchain and IoT together can tackle some of IoT’s biggest challenges.

What Is Blockchain?

Blockchain is one way that data is protected. In short, blockchain allows a transaction to be made between two nodes in a permanent way and doesn’t require third-party authentication. 

An even simpler way to discuss blockchain is in terms of databases. Blockchain is a type of database that stores information, though the method of how it stores data is unique. Databases are designed to have a huge capacity for electronic storage while also allowing users to access, monitor, and modify data. To manage big amounts of information, databases use servers to house data. 

A blockchain database differs from a more typical database in its structure. Information is stored in limited groups (also known as blocks), each with a set capacity. When a block is full, information moves to the next block, effectively creating a chain of blocks: hence, blockchain. A typical database uses a table-like format where data is easily accessible. Since blockchains are segmented, accessing information isn’t as simple—everything is connected and historically documented, so accessibility and verification tend to be more secure.

The main benefits of blockchain systems are security, transparency, reliability, and efficiency due to the ability to record digital transactions and interactions between devices.

Blockchain for IoT Security and Privacy

Moving on, let’s look at the results of integrating blockchain into IoT devices for an enterprise.

Connected IoT devices can process a large amount of data managed by different organizations, making it difficult to locate the source of a data leak in the event of a cyberattack. It is also difficult to know the ownership of this data.

Therefore, blockchain technology can help ease the associated security and scalability issues:

• Using blockchain to store data collected by IoT networks would add another layer of security, making it more difficult for hackers to gain access.
• The blockchain also provides a more robust level of encryption, where it is virtually impossible to overwrite existing records.
• It brings transparency by allowing any authorized person to access the network and track past transactions.
• Applying blockchain speeds up transaction processing and coordination among billions of connected devices.
• By increasing trust between parties, it enables companies to reduce their costs, as processing overhead related to IoT gateways is eliminated.
• By relying on a tamper-proof system, a single organization’s control over the data generated by IoT devices is eliminated.

How Blockchain Is Influencing IoT

Now we can cover how blockchain and IoT work together. IoT makes it possible to connect devices and communicate. Data transfers are happening rapidly and continuously, and blockchains make it possible to verify data across several different sources. This gives users more freedom and flexibility when it comes to sharing data between different devices, among other benefits.

Perks of Blockchain and IoT

There are several benefits of blockchain IoT security, like lower costs, faster transactions, accessibility transparency, and improved security. These are some of the ways those benefits are achieved.

Distributed Ledger

Data is spread across a bunch of computers, which makes verification better and hacking much more difficult since the data isn’t in one place. This helps with general security as well as cyber security; even if a node is offline, information is still protected and properly stored. IoT networks and devices are potentially much safer with blockchains due to the distributed architecture, especially from bots.

Decentralized Authority

Centralized systems have all nodes connected to one main server. Decentralized systems use several nodes that work independently. Rather than having a hierarchy with one main node, nodes are on a “peer” level. With things like distributed consensus and data encryption, decentralization helps lower costs and increases efficiency with IoT usage.

Immutability

Blockchains have an immutable nature, meaning that changes are easily detectable since blockchain data can’t typically be altered. Blocks are made with timestamps, so there is a chronological order to the chain of blocks. When a new block is created, it’s linked to a previous block, making the chain “unbreakable” in a sense. Essentially, data can only be added, not modified, which makes data much more secure in the IoT world.

Challenges to Keep In Mind

Though it’s a quickly rising technology, blockchain is still a fairly young tool, so there are still some challenges to be considered. There are some limitations to decentralized systems and distributed ledgers, such as scalability and storage space. 

Some scalability platforms are running into bottleneck issues, which can extend processing and performance time. Decentralization helps with this issue, but also leads to different issues with big data storage. For storage, a local copy of the distributed ledger is still required by every participant, which is hard to maintain for some devices, like sensors.

The general newness of blockchain will present some issues, so it’s wise to keep up with news and trends regarding blockchain IoT implementation. With that said, ongoing research will continue to address these and similar issues as blockchain becomes more commonplace.

Benefits of Combining Blockchain and the Internet of Things

Enhanced Security and Trust

Blockchain’s decentralized nature, combined with its cryptographic processes, enhances security in IoT networks.

It mitigates risks associated with single points of failure in centralized systems, and by storing device data in an immutable ledger, it increases trust among users.

Improved Data Management

Blockchain allows for the efficient management of vast volumes of data generated by IoT devices. It ensures the data is accurate, timely, and consistent across all nodes. This kind of robust data management is critical for decision-making processes in businesses.

Increased Efficiency and Transparency

Blockchain increases efficiency in IoT networks by eliminating intermediaries, speeding up transactions, and reducing costs. Its transparency ensures all participants in the network have access to the same information, leading to improved accountability and trust.

Autonomy in IoT Systems

Smart contracts, powered by blockchain, can automate various processes in an IoT system. These self-executing contracts with predefined rules can trigger actions, enhancing the system’s autonomy.

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

Blockchain addresses the problem by decentralizing the decision-making process to a consensus-based shared network of IoT devices. However, there are three main challenges to be considered while designing the architecture for IoT devices in conjunction with blockchain:

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.

While decentralized public blockchain networks are hard to hack, smart contracts used for running them could be buggy. The worst part is that cyber hackers look for common smart contract vulnerabilities.

To keep this problem at bay, you must thoroughly review and test smart contracts. You can never be sure of not having bugs in your smart contracts, but you can reduce the chances of encountering them and hampering your blockchain and IoT architecture.

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.

Enterprises must investigate their privacy requirements to check whether private or hybrid blockchains might suit their needs better, and take action accordingly.

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.

Microtransactions

IoT devices hooked up to sensors and actuators provide the perfect environment for microtransactions. If such devices are autonomous and thus can contract individually or collectively with potential customers, they can charge for any number of potential interactions: device discovery, network connectivity, sensor readings, actuator access, and much more.

For instance, imagine that a rail company has outfitted various pieces of infrastructure (switches, crossing bars, end of train detectors, etc.) with small IoT monitoring devices that communicate over long-range radio to eventual backhaul locations at its rail yards. The primary purpose of these devices might be to improve the safety and on-time performance of trains using its network. However, the sensors might also monitor various environmental conditions such as temperature, humidity, and ambient light, and that data could be sold to interested parties (e.g., a weather forecasting service) either in aggregate or individually by particular sensors. Another micro-revenue opportunity is selling access to the communications network that the rail operator has established along its right of way, for example to farmers needing intermittent connectivity.

In a previous Coin Center backgrounder, Chris Smith outlined how Bitcoin micropayment channels represent one approach to such transactions. In essence, the two parties establish a shared escrow or “tab” against which the buyer can charge smaller microtransactions. Such an escrow is established using the multi-signature feature along with a lock time, so that the funds are not paid out until both parties agree that value has been exchanged in accordance with the underlying contract. By employing a shared escrow, the seller also limits the risk of double spending by the buyer (assuming eventual connectivity to sync with the relevant blockchain ledger). The Lightning Network is a proposed extension of this architecture that could allow two people or devices to pay each other without creating a channel specifically for the transaction (this is done by sending payments through a pre-established network of several payment channels).

One common misunderstanding is that IoT devices might need to complete the resource-intensive task of calculating blocks (also known as mining) in order to securely engage in blockchain interactions. Thankfully, that is not necessarily the case because it can be sufficient to keep the equivalent of an onboard wallet that can utilize these payment channels. However, micropayment channels do require both parties to re-sign each transaction—an operation that can still be too intensive for highly constrained devices. A lightweight alternative is to use simpler hashing techniques to validate changes to the microtransaction tab between both parties.

Summing up

The security of IoT devices and networks is a complex problem requiring a comprehensive approach and creative solutions. One possible way of enhancing security and reliability within an IoT ecosystem is the application of blockchain technology.

By decentralizing IoT networks with blockchain and eliminating single points of failure, connected devices get additional protection and become less vulnerable to malware and other attacks. Other advantages of a decentralized IoT infrastructure include more autonomous operations and lower costs of network and infrastructure maintenance.

Author Contributions

JG: research about blockchain, IoT and AI and identification of fields of overlapping between these innovations (see sections “Introduction,” “Improving Standardization, Privacy, Security, and Scalability of Data,” “Automatization Via Smart Contracts,” “Conclusion”). PS: discussion of blockchain-based identities, blockchain-based Euro, tokenization of assets (see sections “Authentication via a Blockchain-Based Identity,” “Use Case: The Joint Potential of Blockchain, IoT, and AI,” “Automatization Via Smart Contracts,” “Conclusion”). RR: literature review (first 2 paragraphs of section “The Interconnection Between Blockchain, IoT, and AI”), enhancement of section “Improving Standardization, Privacy, Security, and Scalability of Data” (2nd and 3rd paragraph), use case, enhancement of section “Conclusion” (2nd and 3rd paragraph), and References. All authors contributed to the article and approved the submitted version.

FAQs

1. How does blockchain work in IoT?

Ans: When using IoT, data is shared on many public clouds. There is a high chance of data leaks. Blockchain offers a solution as it enhances data security.

2. How can blockchain technology help IoT systems stay safe?

Ans: Blockchain has robust security measures in place to prevent data manipulation, limit access to IoT devices, and can disable compromised devices in an IoT network.

3. Why does the future of IoT depend on blockchain?

Ans: The future of IoT depends on blockchain because it can keep a record of each transaction mode on IoT. It can also make transactions secure in such a way that data cannot be altered.

Перспективы

IoT может значительно улучшить опыт как компаний, так и их клиентов. Подключая устройства и системы, IoT может автоматизировать задачи, собирать данные и предоставлять информацию в режиме реального времени, которая может улучшить процесс принятия решений и оптимизировать операции.

Однако мы также осознаем потенциальные риски, связанные с IoT, такие как проблемы с конфиденциальностью и другие нарушения безопасности

Крайне важно, чтобы любое развертывание IoT было тщательно спланировано и выполнено с применением соответствующих мер безопасности для защиты от угроз

Крайне важно подходить к реализации с осторожностью и отдавать приоритет безопасности, конфиденциальности и удобству работы пользователей. Вот несколько советов по созданию надежной среды IoT:

1. Внедрите безопасные протоколы связи.
2. Регулярно обновляйте программное обеспечение, чтобы обеспечить его защиту от известных уязвимостей.
3. Используйте безопасное хранилище данных для защиты конфиденциальной информации.
4. Управляйте доступом к устройствам и системам, чтобы предотвращать несанкционированный доступ.
5. Проводите регулярные оценки безопасности для выявления и устранения потенциальных уязвимостей.
6. Внедрите надежные методы управления идентификацией и доступом.
7. Используйте технологию блокчейн для повышения безопасности и предотвращения физических краж устройств.
8. Обучайте пользователей передовым методам обеспечения безопасности и конфиденциальности, чтобы предотвратить человеческие ошибки и обеспечить соответствие требованиям.

Следуя этим советам, организации могут создать безопасную и надежную среду IoT, которая повышает удобство работы как сотрудников, так и клиентов. Если вам нужна дополнительная помощь или у вас есть какие-либо вопросы, пожалуйста, не стесняйтесь обращаться в H-X Technologies.

Impact of Blockchain and Blockchain and Internet of Things Integration

The fusion of Blockchain and IoT has vast implications across multiple industries. In healthcare, it can enhance patient data security and traceability of drugs.

In agriculture, it can improve food safety by ensuring transparency in the supply chain. The possibilities are endless and transformative.

At a broader societal level, Blockchain-IoT systems can contribute to improved security, privacy, and trust in digital platforms, enhancing their societal acceptance.

Economically, these systems could lead to cost savings, new business models, and economic growth by creating new market opportunities.

Защитите устройства IoT с помощью блокчейна

По мере того, как Интернет вещей (IoT) продолжает расти, растет и потребность в безопасных устройствах IoT

Ожидается, что к 2025 году будут использоваться миллиарды подключенных устройств, поэтому крайне важно обеспечить защиту этих устройств от киберугроз. Технология блокчейн предлагает многообещающее решение этой проблемы, предоставляя безопасную и децентрализованную платформу для устройств IoT

Одной из основных проблем, с которыми сталкивается безопасность IoT, является отсутствие стандартизации устройств. Многие устройства IoT производятся разными компаниями и работают под управлением разных операционных систем, что затрудняет реализацию единых протоколов и процессов безопасности. Технология блокчейн предлагает решение этой проблемы, предоставляя общую платформу для работы всех устройств IoT.

Используя технологию блокчейна, устройствам IoT можно присвоить уникальные цифровые идентификаторы, которые хранятся в блокчейне. Эти идентификаторы можно использовать для аутентификации устройств и обеспечения доступа к сети только санкционированным устройствам. Это помогает предотвратить злоумышленный доступ и гарантирует доверие ко всем устройствам в сети.

Еще одно преимущество использования технологии блокчейн для обеспечения безопасности IoT заключается в том, что она может помочь предотвратить подделку данных. Неизменный характер записей блокчейна означает, что любая попытка изменить данные будет немедленно обнаружена и помечена как мошенническая. Это значительно затрудняет хакерам манипулирование данными или внедрение вредоносных программ в систему.

Одним из примеров того, как технология блокчейна может использоваться для защиты устройств Интернета вещей, являются умные дома. Умные дома становятся все более популярными, и домовладельцы используют подключенные устройства для управления всем – от освещения до отопления и кондиционирования воздуха. Однако эти устройства часто уязвимы для кибератак, в результате чего домовладельцы подвергаются риску кражи личной информации или взлома их домов.

В заключение, технология блокчейна предлагает многообещающее решение для защиты устройств IoT. Его децентрализованный и прозрачный характер делает его подходящим для защиты миллиардов подключенных устройств, которые, как ожидается, будут использоваться в ближайшие годы.

The industry is not waiting and takes initiatives

It is still early days, Bieler says. That is certainly true. However, at the same time big tech companies are not waiting, probably one of the reasons Bieler advices to start looking at the combination of blockchain(s) and the Internet of Things. And they did and will continue to.

IBM Blockchain, for instance, already allows to extend (private) blockchain into cognitive Internet of Things. In fact, ultimately it will be the combination of artificial intelligence, IoT and blockchain that will prove most interesting across industries and in myriad possible IoT applications. With blockchain we are pretty much adding to the changing digital infrastructure that powers so many evolutions and impacts so many areas, from analytics to security, in an environment that thus far was centralized.

To illustrate the benefits of blockchain and Internet of Things convergence, IBM gives the example of complex trade lanes and logistics whereby smart contracts can follow (and via blockchain technology register), everything that has happened to individual items and packages. The benefits: audit trails, accountability, new forms of contracts and speed, to name a few.

In the image below from an IBM infographic, the company sums up three key benefits of using blockchain for IoT. They are also often mentioned as other blockchain benefits but in other parts of the infographic and the IBM video below, there is more in-depth information about the topic. The three benefits of blockchain for IoT, according to IBM: building trust, cost reduction and the acceleration of transactions.

Three key benefits of using blockchain for IoT according to IBM – source IBM infographic

Blockchain Technology:

The Blockchain is one of the breakthrough technologies that has already infiltrated in the transactional environment and actively wiping off the middlemen’s role. It facilitates the transaction between the businesses or the people over the Internet.

The transactions may include digital assets, codes, cryptocurrencies , and, etc.

Though it was initially associated with Bitcoin and adopted by the financial institution, today we find the technology in tradings, travel insurance, logistics, energy management, data analytics, and, etc.

To be simple in describing the technology, it is akin to a ledger. It is a chain of datasets grouped into containers called the blocks. These linked blocks are secured with cryptography technologies so that the authenticated users can alone edit and are updated as the transactions occur.  

A recent World Economic Forum report predicts that by 2025, 10 percent of GDP will be stored on blockchains or blockchain-related technology.

In India, it is anticipated that the blockchain adoption streamlines the transaction process and transform India’s economy to all good. It is high time that we embrace the technology to derive the benefits.  

How Blockchain and the Internet of Things Work Together

Integration of Blockchain With IoT

In a combined Blockchain and IoT system, IoT devices perform their standard operations of collecting and transmitting data, while blockchain plays a role in securely storing and managing this data.

With each IoT device acting as a blockchain node, transactions can occur between devices without the need for a centralized authority.

Practical Applications and Use Cases

Several sectors already leverage the convergence of Blockchain and IoT.

For instance, in supply chain management, IoT devices monitor and record the conditions of goods in real-time, and blockchain provides an immutable record, ensuring traceability and preventing fraud.

In smart homes, blockchain can secure data generated by IoT devices, preventing unauthorized access.

What is Blockchain Technology?

This underlying technology through which bitcoin and other cryptocurrencies work is called blockchain. The blockchain is a technology which uses a completely decentralized network to record and process transactions. Bitcoin or any other cryptocurrency is just one example of the application of blockchain.

But why should anyone care about blockchain and how it works? The blockchain is seen by many as a technology that will be transforming the future of the internet in times to come.

If you think about it, every major technology company in the world currently acts as a centralized body when it comes to storing your data, processing payments, etc. This is true whether the company is Facebook, Airbnb or Uber.

With the decentralization principle on which blockchain works, there is an enormous scope to make things truly decentralized. This will avoid the situation where all your data is in the hands of a few centralized entities and reduce the risks of hacking, and information theft.

The biggest advantage of the blockchain is that the data on the blockchain is completely secure, authentic, and tamper-proof.

The fact is that blockchain technology enables a system of maintaining data that is decentralized, tamper-proof and trustless. Since the success of IoT depends on its ability to keep its data secure and confidential, the use of blockchain in IoT can transform the IoT industry for the better.

How Blockchain Works

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.

A trusted digital ledger shows who has access to the IoT data and is conducting transactions. There have to be various security layers deployed to prevent unauthorized access. Blockchain enables that and keeps the data safe and access control in limited hands.

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.

The technology streamlines processes and builds new business value across the system by banking on the data fetched by IoT-connected devices and sensors.

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.

By eliminating the intermediaries, however, blockchain and IoT can significantly improve the supply chain efficiency, increase the speed of transactions, and lower costs. If a typical supply chain transaction gets validated after four or five hopes, it increases the total fee. 

When blockchain is present to validate to a certain extent, it can allow the untrusted parties to exchange data directly with one another, thus eliminating the fees associated with every hop.

Blockchain in the IoT: a brief introduction

Blockchain technology represents a decentralized ledger system, facilitating secure, transparent, and distributed transaction recording. Its remarkable promise shines especially bright within the Internet of Things, where devices generate vast amounts of data necessitating secure and reliable storage and transmission.

Blockchain networks consist of globally distributed P2P nodes that jointly follow predefined protocols to validate transactions. All information is kept in cryptographically chained blocks that are highly tamper-resistant.

Blockchain ensures IoT data integrity by making it nearly impossible for criminals to overwrite or manipulate records. Cryptography ensures robust end-to-end encryption as the data moves between devices.

Smart contracts can automate data sharing and permissions in a transparent way using predetermined rules written into code. For instance, a connected vehicle can be programmed to unlock only for authorized users based on blockchain verification.

However, there are still challenges in combining these innovations. Performance and storage limitations need to be addressed before blockchain is ready for large-scale IoT data. But as technologies advance, we will undoubtedly see connected systems protected as securely as never before.

The distributed Internet of Things meets Distributed Ledger Technology

As Frank Gens said in IDC’s 2017 worldwide IT technology FutureScape webcast, blockchain is also becoming important in third generation security, to name just one example.

And since quite some time blockchain is increasingly being looked upon in an Internet of Things context. Blockchains have many benefits. They are not the answer to all challenges of the digital economy as sometimes is said but it’s certain that they will play an increasing role in the Internet of Things.

In the long term, we expect the combination of IoT and blockchain to enable innovative devices and business models, but the necessary evolution in both blockchain and IoT will take five to 10 years to achieve maturity (Avivah Litan, Gartner, end 2019)

Forrester’s Dan Bieler mentioned blockchain’s potential for IoT solutions. In a nutshell:

As Internet of Things applications are by definition distributed it’s only normal that the distributed ledger technology, which blockchain is, will play a role in how devices will communicate directly between eachother (keeping a ledger and thus trail of not just devices but also how they interact and, potentially, in which state they are and how they are ‘handled’ in the case of tagged goods).

Blockchain is designed as a basis for applications that involve transaction and interactions. These can include smart contracts (smart contracts are automatically carried out when a specific condition is met, for instance regarding the conditions of goods or environmental conditions) or other smart applications that support specific Internet of Things processes. This way blockchain technology can improve not just compliance in the IoT but also IoT features and cost-efficiency.