How Blockchain And IoT Complement Each Other
The IoT technology came as quite an innovative method which strongly impacted the world. From smart devices to smart homes, and entire potential smart cities which still lie in the future, the sector is changing the world as we know it. Not only that, but it also impacts various businesses and pretty much all industries.
While the IoT sector is best-known for various gadgets and devices with the Internet connection, it has a much larger potential in the sphere of business. There are countless devices with the ability to collect various measurements and different types of information, collecting it all without the need for human intervention. This data can be used by companies to automate various processes, speed up production, increase productivity, and significantly improve customer service. However, while the new technology certainly has its advantages, it also has a few flaws.
The biggest of its flaws is the security of the collected data. Information has become a new currency in the age of the Internet, and there are very few pieces of information that companies want or can afford to leave open to the public. At least, not in their raw form. The competition itself is getting stronger and stronger, and firms need to keep their secrets in order to gain the upper hand.
With that in mind, there is a large demand for secure data storages all around the world. However, the solution already exists, and it comes in the form of blockchain technology.
Blockchain and IoT
Blockchain technology emerged as a counterpart of cryptocurrency, more specifically — Bitcoin. It appeared as an underlying technology where BTC could operate, and where transactions will be recorded. It was created with an intent to take power away from centralized institutions, or any other single entity that would be able to make all the calls. Instead, it is run by the community, a group of willing individuals who process transactions and hold copies of the entire transaction history.
As such, blockchain is impossible to hack, which keeps stored data free from dangers such as information manipulation. All data stored on blockchain is immutable, meaning that it cannot be changed, deleted, or impacted in any way.
While the public blockchain remains open to everyone who has an Internet connection, the private blockchain (enterprise blockchain) can only be accessed by approved parties, meaning that the companies can still store data without having to worry about it getting stolen or modified in any way.
It is already easy to see how the two technologies could work together, with IoT devices providing valuable information, and blockchain storing it and keeping it safe. Naturally, not every blockchain would serve the purpose, and only the fastest ones would be able to handle high transaction processing speed, necessary to store constant readings by IoT devices.
However, due to the massive amount of potential that a combination like this has, several companies have already started working on projects that might bring this business dream to reality. The best example of this is IBM, with its IBM Watson infrastructure, IBM clouds and the Credits blockchain platform.
IBM blockchain/IoT prototype
IBM is a well-known tech giant which has been working on solutions for all existing problems regarding blockchain and the IoT sector. The company's prototype is considered a hack-proof and extremely fast method of gathering data, which works perfectly with IoT. It will expose the readings of the devices to the public, and it can connect and register vast amounts of these devices on the public blockchain.
IoT sector's sensors can collect high-quality data which companies will be able to use without fear of information manipulation or lack of proper readings. Further, reaching consensus is vital for any further transactions between participants to be possible. The IoT sector will become much more appreciated and developed, while the blockchain receives another massive use case which will bring it closer to businesses, as well as mass adoption.
There were already numerous tests where the blockchain and IoT devices were used, such as international shipments, where the shipment location can be tracked with much greater precision than ever before. Important shipments will, therefore, be much safer, and theft-resistant, while the process of smuggling may even be led to extinction by using blockchain technology.
Possibilities are nearly endless when these two technologies are combined, and it is clear that they greatly complement each other. Blockchain and the IoT sector working together is the next step in our technological evolution, and as such, their combination must not be overlooked.