In this article, we will learn about the “What is blockchain? How it can enhance IOT features?”. Before getting into the topic, lets brush up with basics about IOT and Blockchain. Blockchain refers to an encrypted, distributed, decentralized computer filing system designed to facilitate the creation of tamper-proof, real-time records. IoT is interconnection of computing devices embedded in everyday objects via Internet that allows them to send and receive data. Merging these two technologies together, we can create a model for a reliable, secure and permanent method of recording data.

What is blockchain?

Blockchain is a shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network. An asset can be tangible (a house, car, cash, land) or intangible (intellectual property, patents, copyrights, branding). Blockchain reduce the risk and cutting costs for all involved.

How blockchain works?

Every transaction is recorded as a “block” of data. Those transactions show the movement of an asset that can be tangible (a product) or intangible (intellectual). The data block can record the information of your choice. Such as who, what, when, where, how much and even the condition. Example: Temperature of a food shipment.

“Each block is connected to the ones before and after it”. These blocks form a chain of data as an asset moves from place to place or ownership changes hands. The blocks confirm the exact time and sequence of transactions. Block links securely together to prevent any block from being altered or being inserted between two existing blocks.

Finally, “Transactions are blocked together in an irreversible chain: a blockchain”. Each additional block strengthens the verification of the previous block and hence the entire blockchain. This renders the blockchain tamper-evident, delivering the key strength of immutability. This removes the possibility of tampering by a malicious actor and builds a ledger of transactions which is trustable.

How does IoT work with blockchain?

Blockchain empowers IoT devices by enhancing their security and bringing transparency within the IoT ecosystems. IoT allows smart devices to send data to private blockchain ledgers which included in shared transactions with other tamper-resistant records.

        Combination of Blockchain and IoT can enable businesses to both access and share IoT data within their private network safely. This process does not require any central control and management system and also enhances the security of the system.

 Blockchain helps create a scalable and decentralized ecosystem for IoT devices, platforms, and applications. Similarly, IoT presents myriad opportunities for enterprises and organizations to run their business operations the “smart” way. Naturally, the combination of these two emerging technologies holds tremendous potential for the industry and also have various applications.

Benefits of IOT with Blockchain network

Every year the number of IOT enabled devices increases around the world. Therefore, the amount of data generated every second will continue to scale higher and higher.

It is impossible to handle enormous volumes of both existing and projected data via conventional approaches. Not to forget that transforming massive volumes of data into actionable and valuable business insights is another challenge.

 Handling such vast amounts of data inevitably raises security concerns with the incidence of cybercrimes increasing significantly over last decade. With millions of devices connected to the Internet, each becomes vulnerable to possible security breaches. Although the existing security technologies are playing a major role in mitigating security risks, but not suitable for long run.

Furthermore, the current IoT ecosystems rely on centralized, brokered communication models, better known as the server/client paradigm. These infrastructure have massive processing and storage capacities where all devices are identified, authenticated, and connected through cloud servers.

These IoT solutions are highly expensive, thanks to the high infrastructure and maintenance costs of centralized cloud services. As the number of IoT and connected devices increase, these costs will multiply substantially. Hence, not all businesses will be able to afford cloud IoT solutions.

However, with a decentralized approach as Blockchain, these challenges can be easily overcome by Adopting a standardized peer-to-peer communication model. This model will reduce the installation and maintenance costs of large centralized data centres.

Also, it will distribute computation and storage needs across the billions of devices that form IoT networks. Even in the instance of the failure of a single node will not bring the entire system to a halt.

Applications of IoT and blockchain

1. Freight transportation

Moving freight is a complex process involving different parties with different priorities. An IoT-enabled blockchain can store the temperatures, position, arrival times, and status of shipping containers as they move. Immutable blockchain transactions help all parties to trust the data and take action to move products quickly and efficiently.

2. Component tracking and compliance

Ability to track components that go into an aircraft, automobile, other products is critical for both safety and regulatory compliance. IoT data stored in shared blockchain ledgers enables all parties to see component provenance throughout a product’s life. Sharing this information with regulatory agencies, shippers, and manufacturers is secure, easy, and cost-effective.

3. Log operational maintenance data

IoT devices track the state of safety for critical machines and their maintenance. From engines to elevators, blockchain provides for a tamper-free ledger of operational data and the resulting maintenance. Third-party repair partners can monitor the blockchain for preventive maintenance and record their work back on the blockchain. Moreover, government entities can view operational records.

Conclusion

Therefore, Blockchain technology is the answer to some of the primary challenges of IoT, including its scalability, privacy, and reliability. Blockchain is an excellent means to track and monitor billions of connected devices. Thereby enabling the sharing and processing of transactions between connected devices. Moreover, it eliminate single points of failure, creating a more resilient ecosystem for devices to run on. Blockchain IoT can facilitate secure and reliable collaboration between connected devices in an IoT network.