Blockchain and IoT
Blockchain is used to maintain a continuously growing list of records i.e. blocks. Each block contains a timestamp and a link to a previous block.
It does not use a centralized database on a server like banks and many other applications. Instead, Blockchain uses a distributed database on a peer-to-peer network.
Each entry has encrypted data about the previous entries embedded in it.
Whenever new data needs to be entered, the nodes in the network need to approve the data as valid based on their existing data. Only then the entry is made into the blockchain.
The blockchain architecture makes it very secure, tamper-proof and resistant to failures.
See also : What is Blockchain ?
Blockchain is currently being explored for use in IoT projects.
Blockchain can be majorly used for security applications in IoT projects.
By merging blockchain with IoT, the data collected by smart devices in the IoT network can be securely stored.
Data is the most valuable component of an IoT network and securing it using blockchain can be vital in improving the IoT network.
The ways in which blockchain can be used with IoT are
- The smart machines connected in the IoT network can record data and transactions among themselves without human intervention. This will result in accurate and tamper-proof records.
- Smart contracts can be implemented within the IoT network. Smart contracts are contracts which get executed automatically when certain predefined conditions are satisfied. The involved parties can be certain that each entity involved in the contract will work as decided without the need of an intermediary.
- Traditional IoT uses centralized storage and processing systems, but with blockchain and it’s decentralized, distributed and secure network, the data will be safe and easily accessible.
Below are some of the possible applications of blockchain in IoT technology
- Smart energy: As the energy generation becomes decentralized and consumers start using alternatives like solar energy to power their homes, blockchain can be used to buy and sell excess energy generated by consumers among themselves.
- Pharmaceutical industry: In some countries, pharmaceutical companies are required by law to maintain certain medicines at prescribed temperatures at all times during transport and distribution. IoT technology using blockchain smart contracts can help to maintain the data as proof of compliance.
- Supply chain: Products like Modem use blockchain with IoT technology to automate the supply chain. Any kind of product can be easily tracked at all stages of the supply chain. Consumers can be sure of where the product came from, which is more relevant in the food business. This will also help consumers be sure the product is not fake.
- Self-driven taxi industry: When blockchain is used with self-driven taxis, it will fully automate the taxi industry. This will eliminate the safety issues currently faced by drivers and passengers inspite of steps taken by taxi companies. The taxi can accept a booking and even payment from the customer using blockchain. This will also result in savings for both the business and customers.
The use of blockchain and IoT is still in its nascent stage.
There will be technical and economic challenges to overcome for successful implementation of blockchain in Internet of things.
Blockchain technologies may need to be customized to fit better for use with IoT technologies. This would be the next technological advancement in IoT.
Let us know what you think about role of blockchain technology in IoT in the comment section below.
See also: 15 Real World Use Cases and Applications of Blockchain Technology
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