Is The Potential Of Blockchain Being Realised In IoT Networks, Or Is It Detained To Remain A Niche Technology?
The integration of blockchain and IoT has successfully addressed many issues in intelligent connected systems. Although organisations under different domains embrace blockchain, they will also realise the technology’s true potential in the coming years, and it won’t ‘just‘ be a niche technology any longer.
The IoT or Internet of Things functions by connecting people, devices, places, and technology to create value for individuals and organisations. Today, IoT exists in sophisticated and connected sensors, chips, and actuators embedded in different physical entities. As the IoT ecosystem continues to grow globally, billions of devices are getting interconnected. The world would have more than 50 billion connected devices by 2030. The very nature of IoT makes it vulnerable to various security threats because connected IoT devices exist in many forms and brands, tested or untested, approved or unauthorised. With the number of devices in the smart ecosystem growing, users would be susceptible to data theft and hacking. Even if a single connected device is vulnerable, it can lead to a compromise of data.
Starting with Bitcoin, decentralised ledger technologies (DLTs) like blockchain continue to gain popularity at an unprecedented scale. However, there are three main features of this technology that might benefit the IoT ecosystem.
- Trust: DLTs have been conceived to add a trust layer between all the participant parties. Being append-only and reinforced by cryptography, no participant can modify or delete any of the ledger blocks, thus making the blockchain immutable and every transaction traceable.
- Digital Identity: With centralised identities becoming vulnerable to data breaches and identity thefts, digital identity often becomes unreliable. Incorporating blockchain technology, users would have control over their data or information. Thus, blockchain technologies are helping users control the use of their digital data and manage digital identities.
- Smart Contract: With real-time enforcement, blockchain-based smart contracts are being used to establish an agreement between multiple parties without intermediary involvement. The contract remains over a decentralised and distributed blockchain network. Presently, such arrangements have become a staple in different spheres involving human transactions, such as real estate and healthcare.
The integration of IoT and blockchain can go a long way in preventing disruption, thereby building trust during data sharing, processing, and storage. This fact explains why organisations under various sectors are integrating blockchain into IoT ecosystems to secure their data across IoT (Internet of Things), IIoT (Industrial Internet of Things), and IoMT (Internet of Medical Things).
Is The Potential Of Blockchain Being Realised In IoT Networks?
While the utility of blockchain is yet in its nascent stages, the coming years would see its diversification and adoption in IoT environments. By 2025, blockchain IoT is set to be a $3 billion industry. However, IoT networks are yet to exploit blockchain technology to its full potential:
- Firstly, specific concerns regarding the processing power necessary to encrypt every object in a blockchain-based environment need to be addressed. Considering the diversity of IoT ecosystems, the key players need to make strategic moves.
- IoT is different from ordinary computing networks, as many diverse devices constitute an IoT environment. Accordingly, the computing powers vary in the system, and not every device would be able to maintain the same desired speed level while running similar encryption algorithms.
- Many firms are presently unable to deploy blockchain in IoT due to storage constraints. Although no central server would be required to store the device IDs and transactions, one has to place the ledger on the nodes.
- With time, the ledger size would be increasing. Considering such challenges, organisations deploying IoT systems have not fully capitalised on blockchain technologies yet.
It won’t be wrong to acknowledge blockchain as the missing link between IoT and data security today. However, between 2019 and 2025, global blockchain IoT is likely to register a CAGR of 91.4%. This projection is optimistic about the potential that blockchain holds for IoT in the coming years.
A recently published report has highlighted many use cases that leverage a combination of IoT and blockchain technology, such as supply chain (e.g., food safety, anti-counterfeit, etc.), IoT Network Management (e.g., smart cities, healthcare, etc.), Smart contract and compliance.
It shows that blockchain cannot remain a niche technology and will make a widespread impact in IoT and many other spheres of human activity.
- IoT, IIoT, IoMT Device Authentication: It is imperative to track the origin of a physical or digital asset and eventually use a blockchain to trade it to ensure the authentic developer or manufacturer, owner, supplier, etc. Therefore, blockchain would not remain a niche technology in a few industries but will be of great help for the authentication of connected devices across various networks. Instead, almost every player in diverse sectors would embrace blockchain to secure their credentials and identity across devices and platforms and manage digital rights in the coming years.
Intel has already started working on blockchain technology in collaboration with JP Morgan, Microsoft, etc. Intel is also exploring how blockchain technology in combination with IoT, i.e., Blockchain-based IoT (BIoT) applications, can be used for authentication of IoT-based devices and help solve the security issues of their IoT-based systems.
- Logistics: Even with the digitisation of the logistics industry, it struggles to cope with the shortage of transparency and communication. Besides, with the number of players in this sector multiplying in recent years, organisations often encounter loss of time and money. With blockchain’s transparency and legitimacy attributes, global logistics organisations are leveraging their automation processes.
- Automobiles Sector: Blockchain and IoT ecosystem will be the key technologies of tomorrow, starting from automobile manufacturing, payments, driving, tracking, parking, etc., in various everyday aspects of human lives.
Toyota Blockchain Lab has already started working on customer contract digitalisation, vehicle rights management, vehicle lifecycle management, supply chain, finance, etc., by leveraging highly tamper-resistant and fault-resistant characteristics of blockchain technology along with IoT.
- Other Applications: Presently, the experiments are in the early stages. However, the applications range from medical records to identity management to micropayments and virtual customer blockchain wallets.
Apart from the above-mentioned use cases and applications, other IoT-Blockchain projects such as VeChain are trying to enhance supply chain management. On the other hand, IOTA is developing a standard model for conducting transactions on various devices.
Blockchain and IoT are transforming the digital space, and the world has started to realise its potential. While it might prove to be a labour-intensive pursuit, sensors and IoT devices can expand the digital assets and solutions developed on blockchain. Though the current scenario shows that both blockchain and IoT technologies are in their developmental stages, statistics hold enormous promises for the future. Blockchain cannot remain merely a niche technology in the modern world of convergence, interconnectivity, and diversification. Instead, it will revolutionise IoT and any other conceivable field of human endeavour on a global level.