Blockchain and IoT: A Merger that Guarantees Valid and Secure Transactions
IoT (Internet of Things) is increasingly creating new opportunities for businesses as well as markets. And the technologies that created IoT is not changing the Internet, but everything that is connected to the Internet.
In fact, IoT connected devices are generating so much data that the question on technology leaders’ mind is – How to make all this data secure & reliable?
Blockchain is, without any doubt, the safest way to encrypt & secure data. Blending blockchain with IoT can provide the highest-level of security protocols, especially for data as well as a transaction process.
How Can Blockchain Level-Up IoT Security?
First of all, Blockchain is highly secure and impossible to manipulate by anyone connected to the blockchain network. Ever since Bitcoin, blockchain development has come a long way and can now store anything of value.
So why not save data in it?
Blockchain is the perfect structure to form the foundation of secure IoT Data Solutions.
For example, the present IoT devices rely on client-service architecture for data storage. This means, All devices are first recognized, authenticated, and connected through a cloud, which results in creating an ample amount of data.
However, doing all these requires vast infrastructure, which is of course very expensive.
This is where Blockchain can come to rescue. Blockchain can not only provide an economical way to establish such infrastructure, but since it is decentralized by nature, it can eliminate all single points of failure, creating a tougher and much secure network for IoT data solution.
Benefits of Merging Blockchain with IoT
Most IoT devices like a smartwatch or smart thermostat are created to be small, pocket-friendly, and convenient. While these IoT devices may track health, financial, or other personal data, but they also often lack the appropriate security level, making them vulnerable.
But, by integrating blockchain with such IoT devices, an IoT App Development Company can create IoT Solutions that are insured against hacking.
Like mentioned before, Blockchain is tamper-proof, which makes it the ideal partner for creating secure IoT Solutions.
Following are three biggest benefits of applying Blockchain in IoT.
1 – Enhanced Security Through Decentralization
Blockchain makes it impossible for hackers to intervene due to its broad network of secure blocks.
Simply put, even if a hacker somehow makes any modifications at a single location, it still doesn’t affect the other blocks. That means the data remains encrypted and secured.
Moreover, the cryptographic algorithm in blockchain makes sure that the IoT data stored in a blockchain network remains private for individual or all stakeholders connected to the same network.
2 – Secured Automatic Transactions Through Smart Contracts
The concept of smart contracts was first introduced in 2015 by Ethereum, a product of Vitalik Buterin and a small group of developers.
Smart Contracts refer to computer programs that allow a contract to be executed automatically once a set of predefined conditions are met.
Simply put, Smart Contracts are made of code which is kept on a blockchain network with pre-set rules that activate the contract.
For example, a smart contract can be that ‘if a part in a vehicle needs to be replaced, then that part first needs to reach a certain amount of shelf life or undergo some form of test that proves the part must be replaced.’
Once this condition is met, the IoT device can confirm the order of replacement.
This means, smart contracts in IoT adds an extra layer of validation to conduct automated tasks securely.
3 – Third-Party Free Transactions
Since Ethereum introduced smart contracts concept, Blockchain has kind of become a star in the Finance industry. This is because apart from providing the most secure medium for data as well as financial transactions, blockchain also eliminates the need for 3rd party brokers altogether like banks involving in peer-to-peer payment transactions.
IoT data can also be treated similarly with Blockchain. In simple terms, smart contracts can be created between IoT devices to exchange data. This kind of automation is achievable because each point in the blockchain network can easily verify each transaction without depending on a centralized authority.
That means Blockchain based IoT Solutions can enable trustworthy data exchange, helping business partners easily access and exchange confidential data within the IoT network without a centralized authority.
The Future of Blockchain in IoT
Looking at above possible and easily achievable Blockchain backed IoT Solutions, it is clear that these two technologies can simplify all transactions while ensuring highest-level of security.
Concluding, you can easily pair blockchain with IoT to improve business data security as well as validity for data exchange between IoT devices.
Overall, it is clear that blockchain technology holds the key to ensure the success of emerging IoT solutions in the coming years.