Internet of Things To Enhance Blockchain Potential to Improve Business Efficiency

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The Internet of Things (IoT) has been a growing phenomenon in the past few years. But a widespread adoption of IoT applications has been somewhat slow mainly due to high deployment failure rates as well as security and data privacy concerns.

It is no secret then, that when it comes to leveraging blockchain technology and Internet of Things together, the main use cases, naturally, revolve around security enhancements.

Trust building

Security, privacy, and identity protection remain major concerns for the IoT ecosystem as IoT deployments expose huge amounts of personal data online, thus, posing a number of security threats to users, supply chain partners, and the community. To help solve these security and trust challenges, blockchain is being leveraged to bring scalability, decentralized security and trustless environment to IoT devices, platforms, and applications.

Blockchain and the cryptographic processes behind it could enhance IoT systems with innate security and automated resource optimizations. Blockchain technology can reduce the risks of IoT devices to be compromised as they would no longer be the single point of failure. Because of its decentralized nature, a security system based on distributed ledger technology should be more robust than a centralized one. Additionally, blockchain strong protection against data tampering and hacking would help prevent a compromised device from disrupting their ecosystem such as a home, smart car, transportation or healthcare system by sending misleading information.

Secure data exchange

Applying the blockchain model to IoT could provide a simple infrastructure for two devices to directly transfer digital assets or transaction data between one another with a secured and reliable time-stamped contractual agreement.  Rather than going through a third party entity to establish trust, IoT sensors can exchange data automatically via smart contracts.

Blockchain shows promise for easing that burden. The technology not only enhances secure communication between IoT devices, it can also strengthen privacy agreements for companies.

Distributed ledgers could also offer an ideal, decentralized storage to host all kinds of data generated by Internet-connected devices. Such data when utilized effectively can help with energy consumption analysis, commercial advertising, product development, and city planning. For instance, when an IoT device like a refrigerator gets connected to an IOT-enabled blockchain system, the device automatically monitors itself and requests services as needed. These devices collect a large set of data such as energy consumption and consumer behavior which can then be traded on the blockchain. Solution and hardware providers could even go a step further by applying artificial intelligence to the device to reduce its energy consumption.

Marketing firms and consumer brands interested in this data would be able to purchase it directly from device owners in compliance with necessary regulations such as the recently implemented GDPR.

Greater transparency

Blockchain- based IoT frameworks can be used to securely track and register sensor data of individual items and packages, creating verifiable audit trails.  By applying blockchain technology to IoT, data sensors can report on the status of various items in real-time while providing greater transparency through an end-to-end data trail.  This approach simplifies business processes, improves end user experience, and cuts down operational costs. It can also solve the problems of poor accountability and the constant question of responsibility in the supply chain.

Real-world use case of blockchain and IoT

Retail companies are expected to implement blockchain Internet of Things (BIoT) in various applications such as payments and accounting, advertising, loyalty and reward programs, among others. IDC has forecasted that blockchain will be deployed in 20% of all IoT systems by 2019. Major players in the blockchain and IoT space include IBM, Amazon, Oracle, Samsung, Microsoft, IOTA, SAP, among others.

IOTA is a decentralized public ledger platform that was built with the purpose of enabling the exchange of large amounts of data between IoT devices. Its “tangle” technology is capable of verifying transactions using only a handful of nodes, enabling the platform to process huge amounts of data by IoT applications at high speeds.

Shipping and logistics
The global shipping industry is plagued with process inefficiencies, shipment losses, unnecessary costs, and lengthy communication methods. All these issues leave parties involved in the supply chain liable and vulnerable.  Blockchain and IoT are being deployed in pilot projects across the globe to address these problems and ensure an improved workflow, safeguard the accuracy of data and enhance reliability and traceability of the network.

IoT sensors like temperature sensors, motion sensors, GPS and connected devices provide accurate details about the status of shipments. This data is then stored in the blockchain so that all supply chain participants can get access to the same information in real-time.

For instance, Golden State Food (GSF), a food manufacturer and distributor, is working with IBM to develop a blockchain-based IoT solution to improve accountability and transparency in its food supply chain. The Chinese company ZhongAn has been running a similar experiment to track the whereabouts of chickens from supplier to consumer by putting an anklet on the birds as soon as they are born.

Smart homes
Telstra, an Australian provider of smart home solutions has created an immutable blockchain biometric security system that ensures that data collected by smart devices cannot be manipulated. The goal is to improve the security of homes by ensuring that sensitive user information such as biometrics, location, and voice or facial recognition are stored securely on the blockhain.

Automotive
The automotive industry is deploying blockchain to IoT sensors to enable multiple users or devices to easily and quickly exchange critical information such as traffic congestion, vehicle speed, and weather conditions. HP and Steamr recently partnered to develop a blockchain data management solution for smart cars. Blockchain can also be combined with IoT to enable automated fuel payment, automated traffic control, smart parking and to power autonomous cars. For example, blockchain startup NetObjex has built a smart parking solution that leverages blokchain and IoT to accelerate the process of finding a vacant space in the parking lot.

Of course, it remains many compatibility issues and scalability limitations that need to be addressed for blockchain to be fully incorporated in IoT. Furthermore, existing IoT devices are still not capable of handling large amounts of data produced by IoT networks. Nevertheless, the BIoT space continues to evolve, and the success of such projects will definitely open new possibilities and help drive mass adoption of blockchain technology.

Ray Battrick is a certified blockchain expert and FinTech copywriter who is devoted to working for you to build blockchain-based applications for your business. Ray is also a FinTech copywriter who is skilled at creating persuasive content for a wide range of products, including financial technology, business blockchain, investing and more. As an avid blockchain enthusiast, Ray enjoys writing about business blockchain, ICOs and cryptocurrency investment.

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