Blockchain will not remain a niche technology in the modern world of convergence, connectivity, and diversification. It will revolutionise the IoT and every other conceivable area of human endeavour globally, says Stefano Maifreni
Today, the Internet of things (IoT) exists as sophisticated networked sensors, chips and actuators embedded in various physical units. Its function is to connect people, devices, places, and technologies to create value for individuals and organisations. Integrating blockchain into the IoT will solve many problems with intelligent and connected systems.
The IoT ecosystem will continue to grow as billions of devices are connected. By 2030, there will be more than 50 billion connected devices worldwide.
If organisations optimise blockchain in various areas of their business, they will realise its true potential in the years ahead, and it will not just be a niche technology banded about in conversation. The nature of the IoT makes it vulnerable to various security threats because connected devices exist in many forms and brands, some tested, some untested, some approved and some not unauthorised. As the number of devices in the IoT ecosystem continues to grow, users are more vulnerable to data theft and hacking. Every single connected device is weak and can lead to compromised data.
Starting with Bitcoin, decentralised ledger technology (DLT) and blockchains continue to grow in unprecedented popularity. The key technology features which will benefit the IoT ecosystem are:
- DLT is designed to add a layer of trust between participants and parties. Participants can modify and delete ledger blocks by appending and amplifying cryptography, making the blockchain invariable and transactions traceable.
- Blockchain technology helps users control the use of their digital data and manage their digital identity. When digital identity is centralised, it becomes vulnerable to data breaches and identity theft, becoming unreliable. Blockchain technology allows users to control their data and information.
- Smart contracts are based on real-time enforcement and can be used to conclude agreements between multiple parties without intermediary involvement. Such arrangements are becoming increasingly important in various areas of human transactions, such as real estate and health care. The contracts will remain decentralised and distributed over the blockchain network.
Blockchain will become a $3 billion industry by 2025. While the benefits of blockchain are still in their infancy, its diversification and deployment in the IoT environment will occur in the coming years.
Integrating IoT with blockchain will build trust in data sharing, processing and storage. This fact explains why organisations in different sectors integrate IoT ecosystems to protect their data, e.g. in IoT (IoT), Industrial Internet of Things (IIoT), and Internet of Medical Things (IOMT).
From 2019 to 2025, the global blockchain in the IoT market is expected to have a CAGR of 91.4%. These forecasts are optimistic about the potential blockchain holds for the IoT in the coming years.
Given the diversity of the IoT ecosystem, key players need to take strategic steps. A central server is required to store device IDs and transactions stored on the register of each node. The computing power varies between systems, and not all devices will be able to maintain the desired speed level while running similar encryption algorithms. Faced with such challenges, organisations using IoT systems may not be able to adopt and benefit from blockchain technology.
It would not be wrong to acknowledge that this is the missing link between IoT and data security today.
A report highlights the many use cases that can be exploited by combining IoT and blockchain technology, such as supply chains, food safety and counterfeiting. It shows that blockchain will not remain a niche technology but will impact far beyond the IoT in many other areas of human activity.
Blockchain cannot remain a niche technology in some industries and will help authenticate connected devices and different networks. Actors in other sectors will use blockchain to secure their credentials, identities, devices, platforms and digital rights in the coming years.
Intel has begun working on blockchain technology in partnership with JP Morgan and Microsoft. The company is investigating how blockchain technology can be combined with IoT-based and IoT / BIOT applications to authenticate IoT-based devices to solve security problems in its IoT systems.
Transparency and legitimacy
Given that the number of actors in this sector has multiplied in recent years, organisations are struggling to save time and money. The transparency and legitimacy of the blockchain are attributed to global logistics organisations that use their automation processes. Toyota Blockchain Labs has begun work on customer contracts, digitising vehicle rights management, vehicle lifecycle management and supply chain financing by using the tamper-proof and error-resistant features of blockchain technology and IoT.
On the other hand, IOTA has developed a standard model for processing transactions between different devices. Applications include medical records, identity management, micro-payments, virtual customers, and blockchain wallets. In addition to the use cases and applications mentioned above, other IoT blockchain projects such as VeChain try to improve supply chain management.
While the current scenario shows that blockchain and IoT technologies are still in their development phase, the statistics for the future are extremely promising. Blockchain and IoT are changing digital space, and the world is beginning to realise its potential. However, it may be labour intensive to search for sensors and IoT devices to extend the digital asset solutions developed on blockchain.
Blockchain will not remain a niche technology in the modern world of convergence, connectivity, and diversification. It will revolutionise the IoT and every other conceivable area of human endeavour globally.
Stefano Maifreni is an Executive MBA graduate of the London Business School, a published author (Forbes, The Guardian, and various SME-focused publications), and a regular speaker and moderator at AI-, IoT- and Blockchain-related events in London and Milan.
Stefano has a background in the ICT industry, where he pioneered the SaaS model. He decided a few years ago to follow his passion of helping small B2B tech businesses succeed with their challenges in productive and profitable ways. He founded Eggcelerate to help CEOs of established Small Businesses achieve focus and sustainable growth and bring their business back on track while avoiding the cost and hassles of the traditional consulting approach.