As the internet of things continues to grow rapidly, devices and sensors are becoming more common to communicate information about the status of different “things.” For example, the IBM Watson IoTTM Platform, with its new blockchain integration, enables devices to send data from things to private blockchain ledgers to include them with tamper-resistant records in shared transactions. Blockchain’s distributed replication can allow business partners to verify every transaction, so there’s no longer a need for central management and control. The blockchain records what every participant does, and everyone is included in the overall transaction.
How Can Blockchain Solve IoT Scalability and Security Challenges?
The IoT network can process across multiple devices’ data transactions administered and owned by various organizations, making it challenging to find the source of any data leakages in case an attack by cyber-criminals occurs. The IoT also generates a huge amount of data, and since there are multiple stakeholders involved, the data ownership is not always clear.
Blockchain can help alleviate the IoT scalability and security concerns associated in the following ways:
- Using blockchain to store IoT data adds another security layer that hackers would have to bypass if they try to get access to the network. Blockchain offers a much more robust encryption level that makes it literally impossible to overwrite existing data records.
- A blockchain system distributed ledger is tamper-proof, which means there's no need for trust among the involved parties. No single organization can have control over the huge amount of data produced by IoT devices.
- Devices can also participate in transactions as a party, which invokes transactions in the blockchain. The indelible transactions and data records from devices stored on the blockchain can provide proof and the necessary trust for people and businesses to cooperate. It can build an efficient, trusted business network between the parties that transact together.
- Blockchain offers transparency. It allows anyone who is authorized to access the network and track the transactions that occurred in the pas between IoT devices or between IoT devices and the Servers. This provides a reliable way to identify a source of data leakages and to act quickly. Blockchain can produce an indelible or permanent record required for industry and government regulations.
- By enabling trust among the stakeholders, blockchain can help IoT companies lower their costs by eliminating the processing overheads connected to IoT gateways (e.g. hardware, traditional protocol, or communication overhead costs). Thanks to blockchain technology, device and transaction data are now displayed on a peer-to-peer basis. A peer is a node within a hyperledger, and it contains a copy of the ledger. The consensus is made to agree on the state of the blockchain shared ledger.
- Smart contracts, an agreement between two parties stored in the blockchain, can allow the execution of contractual arrangements between stakeholders if certain criteria are fulfilled. For instance, smart contracts can automatically authorize an automated critical industrial operation without human intervention after all the conditions have been fulfilled.