Blockchain for IoT – Where is the World Heading?

Blockchain for IoT – Where is the World Heading?

The world is heading towards a future where the IoT and blockchain combine to deliver even greater conveniences. Blockchain is the future of IoT because it can solve the security threat that IoT faces.

Internet of Things (IoT) has been at the center of technological advancements for most of the last decade. Even though the idea was born sometime during the 70s, it wasn’t until 2010 that it gained momentum. Experts say that 2018 was the “defining year” for IoT. The IoT industry is expected to have a massive revenue of $8.9 trillion by 2020.

This isn’t the only technology that has been progressing. Another technology that was roughly created around the same time as IoT was blockchain. The global market for blockchain is predicted to increase to $20 billion by 2024. With the popularity of cryptocurrency, blockchain is taking the world by storm due to the sheer opportunities it is expected to produce.

One such opportunity is in the field of IoT. The world is heading towards a future where the two technologies combine to deliver even greater conveniences.

If IoT continues to grow at this pace, it will outstrip the common security technologies that support it. This is a major threat facing the industry.  With a lack of proper security, the challenges faced by the industry will include:

•    Privacy concerns due to the vulnerability of data

•    The current security standards for platforms is not mature enough to cater to IoT

•    There is no guidance to manage or maintain the lifecycle of IoT devices

The current centralized model of IoT is not helping the case either. As of now, the IoT ecosystem depends on identifying, authenticating, and connecting IoT devices through a centralized cloud system. Everything is connected through this system, and hence the internet. Cloud systems have immense storage capacity. Therefore, they have been able to support the industry for the past eight years.

However, this is also why today’s IoT solutions have a high price. These solutions require extravagant infrastructure to run. This, combined with high maintenance cost makes them very expensive. As time goes by and IoT strives to deliver even better interconnectedness, the prices are likely to increase even further on this model.

has not only succeeded in transforming our everyday lives in the past but is still shifting the way we do things. Think about it. Could you have predicted that one day you will be living in a highly connected smart home, in a smart city? Probably not.

As IoT envelops more and more industries and facets of life, the primary concern it poses is in terms of security.  Imagine how disastrous it would be if your data, acquired through your connected devices and vehicles, get leaked.

Well, this is a possibility that we are facing. The Senior Vice President of SAP’s Digital Supply Chain and IoT, Gil Perez, has been very frank about this looming threat. According to him, the more devices that connect to the system, the more lucrative it is for hackers to try and attack it.

While you might think that such threats would only apply to consumer devices. IoT is used in various other industries as well, including B2B and web development. The vulnerability of the system will also affect these commercial industries.

As per Perez, the world may see industrial IoT cyber-attacks in 2018. No one can be sure which aspect the hackers will target. It can be on any point across the value chain, including municipal supplies, distribution networks, or on autonomous vehicles.

The blockchain is the future of IoT because it can solve the looming security threat that IoT faces. The last thing the connected world needs is cyber attacks and blockchain can ensure this doesn’t happen.

This technology is based on the fundamental principle of encrypting data in a way that makes it secure. All cryptocurrencies use this technology as a form of the public ledger to record all transactions that occur.

That’s right, all of them! And there is a fair share of cryptocurrencies in the market today. This network is what makes the process secure and anonymous so that you don’t have to worry about the loss of your data.

IoT can benefit from the level of security delivered by blockchain. The mesh network offered by it will not just interconnect various devices seamlessly, but also avoid central server model issues at the same time. 

The fact that you don’t need centralized cloud servers to manage operations for IoT anymore means that this solution will also consume less power. So, not only will blockchain deliver security but also efficiency.

The world is heading towards interconnectedness. If IoT was to adopt a blockchain model, whereby a secured and encrypted yet decentralized system was used, the structure of IoT could be enhanced by blockchain’s ability to provide:

•    Automated business interactions among nodes of the network via the use of business terms embedded into it

•    A verification and authentication process that revolved around a hash-based solution

•    Consensus models for identifying suspicious activity and eliminating them

Therefore, in the future, the safety of the IoT industry can be enhanced via blockchain. The lack of a central system will itself mitigate attacks and threats while smart contracts would be used for helping the execution of business logic.

The world is heading towards a future where blockchain can revamp the various aspects of the IoT industry, rather than just security.  This includes:

•    Analytical tracking about different decisions that were made during the IoT process. The data stored in the blockchain network can prove to be the foundation of this analysis.

•    The security updates of software. A software update can make the system quite vulnerable. blockchain can remove this vulnerability out of the equation by delivering a cryptographic update.

Remember, blockchain technology was not initially designed to be applied to IoT. Therefore, even though the future is heading towards a convergence of the two technologies, the journey will be plagued with challenges.

1. Storage and Scalability of the Blockchain

Exactly how much data can be stored on the blockchain network is still being debated. The fact remains that the enormous data capacity required by IoT is unchartered territory for blockchain. And blockchain was not designed to store that much information. Whether the size can be a limiting factor for IoT is something we will only learn with time.

2. Security

It is true that blockchain is a much better solution in terms of safety compared to centralized systems. However, this doesn’t mean that the technology is full proof. Instead, if the two technologies are to be integrated in the future, new types of security problems may emerge. For instance, while blockchain can ensure that no data is corrupted when in the system, any data that already enter the system corrupted will stay that way.

3. Legal Aspects

Currently, blockchain is highly unregulated. For a lot of people, this lack of regulation is why Bitcoin has been so successful. However, this also means that the legal aspects of blockchain are quite murky. On the other end of the spectrum, IoT is affected profoundly by the laws of the country it is being used in.

If we go by the rules of the blockchain, retrieving the private key or reversing transactions is not possible. However, for IoT, these options need to be offered.  Not to mention, it will have to be decided who will manage the network, the manufacturers or the users?

The lack of clarity on the legal aspects can prove to be a challenge.

There is one thing we can say for sure – both, IoT and blockchain are here to stay. The world is heading towards a point where these technologies will converge. How seamlessly they do so and what benefits they bring to the masses is something we will have to wait and watch.

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