The Convergence of Blockchain and Internet of Things (IoT): Hype or Hope?
Blockchain, a cutting-edge distributed ledger technology, has gained attention in areas beyond the technology sphere and into the wider business world. In a research paper about cryptocurrencies and blockchain technology, The Brookings Institute refers to blockchain as the “key innovation and transfer of trust in a trustless world”.
Internet of Things (IoT), on the other hand, has practically seen a wide number of examples of its implementation in the last few years. According to Gartner, there were 8.4 billion connected devices engaged by the end of 2017. It’s been estimated that there could be above 20 billion connected devices by the end of 2020, and by 2030 there could be 500 billion or more.
With both technologies in phase of fast adoption, there is expected utility from convergence of these technologies for various use cases. We have previously analyzed how blockchain might transform AI and how blockchain can encourage transformative change in Healthcare IT. In this blog, we describe the concept of the convergence of blockchain and Internet of Things (IoT) in detail.
The Distributed Internet of Things (IoT) Encounters The Distributed Ledger Technology:
Blockchain is an encrypted, distributed ledger technology designed to create real-time records that are impervious to tampering. The term Internet of Things (IoT) describes the continuous growth of the always-online, data-collecting devices. Bernhard Marr, a contributor for the Forbes Magazine, puts the combination of these two breakthroughs this way, “Put them together and in theory, you have a verifiable, secure and permanent method of recording data processed by “smart” machines in the IoT.”
Internet of Things (IoT) applications are distributed by nature and blockchain could be a factor in how devices communicate directly with each other. Experts think of blockchain as an influential technology that might scale and decentralize security to the Internet of Things (IoT) devices, apps and systems that are correspondingly distributed and decentralized.
Perceived Benefits of the Combination of Blockchain and Internet of Things (IoT):
IBM drew attention to blockchain’s ability to securely uncover the business and operational value of Internet of Things (IoT) earlier this year. Blockchain-based IoT solutions may simplify business processes, improve customer experience and achieve prominent cost efficiencies. Additional benefits are:
- By providing a securely-weaved network, blockchain can provide a platform for Internet of Things (IoT) to connectand interrelate reliably and evade the threats that plague central server models.
- A distributed ledger takes away the sources of failure within the ecosystem, making the Internet of Things (IoT) device’s data temper-proof.
- Blockchain is a framework that facilitates device autonomy (smart contract), individual identity, integrity of data and supports peer-to-peer communication by removing technical tailbacks, unexpected delays and inefficiencies.
- The deployment and operation overheads of Internet of Things (IoT) can be reduced through blockchain thanks to absence of intermediaries.
Real-world IoT-blockchain examples
According to Hackernoon, Korean industrial giant Hyundai is supporting an IoT blockchain startup HDAC (Hyundai Digital Asset Currency), which is constructing its own private blockchain designed explicitly for IoT.
And Blockchain startup Filament announced a new chip designed to enable industrial IoT devices to work in conjuntion with multiple blockchain technologies. The idea behind Filament’s Blocklet chip is to let [IoT] sensor data be coded directly into the blockchain to “provide a secure foundation for decentralized interaction and exchange.”
In a number of industries, practical examples of the convergence of these two technologies have come to the fore in recent years. (Click here). Do you think that the concept is just a hype or holds real hope? Leave your comments in the section below!
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