Everything You Need To Know About Blockchain and IoT

The importance of the security of IoT devices cannot be overstated, and blockchain can provide it. Professionals everywhere are using a device, often several, every day in their business. These devices are almost always connected to the internet in some form or another. By using the internet to gather, process, and share information, proper security is essential to protect software, people, and data. 

Take healthcare as an example. In-person healthcare operations use a large range of internet-supported technologies. However, in a world moving online, healthcare is responding with efficient remote solutions that can only thrive by using IoT technology. Automation, telemedicine, hospital and clinical provider systems, and so much more need IoT healthcare solutions.

In providing such a vital service, healthcare professionals must collect, track, and process information quickly and accurately while protecting patients’ information. Patient confidentiality alone is a serious enough demand for reliable and consistent data security in the medical field.

Like healthcare, many fields need and want to protect their information. The convenience of IoT, like faster processing and better connectivity, can’t outweigh the importance of security. Having connected devices is becoming an essential standard in most fields, which means IoT security is, too.

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.

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.

IoT and Blockchain in the Real World

Blockchain used in the IoT setting is picking up speed; from banking and financial services to agriculture, industries are implementing blockchain structures in their IoT efforts. Here are a few more examples of blockchain and IoT in different industries.

• Supply chains: IoT that uses blockchain technology makes network traceability more reliable and improves the general transparency across different points in a supply chain.
  For example, many supply chains are using blockchain to monitor data from sensors and securely share it with stakeholders. Because there are so many stakeholders involved and a lot of transactions required, deliveries are often delayed. IoT sensors can track different types of data, like GPS/location, vehicle information, temperatures, and more. The data that is collected by sensors is stored in a blockchain, and the involved stakeholders are given access to that data in real-time. Secure, efficient, and convenient.
  
• Automotive: Especially because sensors and automation in vehicles are in high demand, decentralized systems used in blockchain systems make it possible to share information and data securely between many devices.
  NetObjex, an automation platform, has made it possible to locate a vacant spot in a parking lot and automate the payment for parking there using crypto-wallets. This is all done through IoT sensors and blockchain security to process payments. Automating payments like this must be secure in order for consumers to trust the parking lot with their financial information, which is made possible through blockchain and IoT.
  
• Telecommunications: In the cellular IoT world, better privacy and data security are possible with blockchain immutability, which can protect phone users from unwanted telemarketers and advertisers.
  One way modern telecom companies are using IoT and blockchain is through smart contracts. Smart contracts used for e-commerce transactions also work through IoT networks and distributed blockchain. Not only can IoT and blockchain prevent insecure transactions from unverified vendors, but smart contract agents installed on a node complete transactions in real-time, which also enhances security.

The Future of IoT and Blockchain

IoT isn’t going anywhere, and neither is the demand for proper security. It’s essential for businesses and companies to protect the information in the entire IoT ecosystem, which is why blockchain encryption is becoming more and more popular. It appears that IoT-based businesses are turning to blockchain systems if they haven’t already. Though it does have some challenges, blockchain technology and security are continuing to advance. Improvements are undoubtedly underway, and until then, blockchains are still a solid security feature to add to IoT implementation across different industries.