The Internet of Things (IoT) and the blockchain are buzzwords today. What if the two work together? What kind of applications would they both serve?
These are among the questions leaders are trying to answer. It’s possible that there may not be definite answers in most domains yet — but here are some considerations:
IoT refers to systems which interconnect sensors and offer automation possibilities. Certain tasks, however, must be controlled for data flow and governance. This can be achieved either manually or by making use of the cloud. While human effort is prone to errors and is costly and inefficient, the cloud is susceptible to security breaches.
The blockchain, owing to its decentralized, peer-to-peer nature and driven by smart contracts, addresses these challenges. It is an open technology with scope for providing interoperability, as a result of which it becomes easier for disparate systems in a transaction chain to interact with one another seamlessly. The integration of partner, vendor, and customer systems is crucial for IoT to realize its potential of autonomy.
With the proliferation of IoT devices, systems become more vulnerable. This is also, in part, due to the lack of authentication standards. The distributed nature of the blockchain can help address the complexity of IoT security. The blockchain has no single point of failure since events get added only upon validation by other participating stakeholder and device nodes in the network. Because of this, data is tamper-proof and the integrity of the IoT devices remains uncompromised.
Importantly, the blockchain also resolves the issue of trust. For instance, the supply chain of a shipment has several stakeholders. They enable the delivery of the product from one point to another using various modes and routes. Most shippers today don’t have sufficient visibility into how the shipments are moving. Pilferage and damage are common. It’s difficult to identify the weak link, especially if there’s collusion among stakeholders. The blockchain can help with a transparent chain of custody management system driven by an IoTized shipment and systems integration.
IoT devices and the blockchain can be leveraged together to introduce radical differences among enterprises. The promise is there; it’s proven to some stage, and the technologies are available. All that matters to be seen is what you wish to mash these up together for, and realize the synergistic power of, IoT devices and the blockchain.