All You Need to Know About IoT and Blockchain

The explosion of the Internet of Things is expanding to completely change life as we know it. Smart cities, smart manufacturing facilities, smart homes to smart farms, the IoT market is growing exponentially. According to Gartner estimates, we can expect to have over 20 billion connected devices by 2020. However, as this device explosion is increasing the internet architecture also has to mature to support the coming IoT revolution and assuage the growing concerns of security and management that come from so many devices getting connected to the internet. As an increasing number of devices get connected to the servers, the servers become overloaded and can become vulnerable to cyber attacks. Clearly, the IoT needs a higher degree of security so that the demands of the IoT can be met.

The what and why of Blockchain

Many IoT devices are designed to be small and unobtrusive. Identifying them and pulling these out of circulation can be a mammoth challenge if these are compromised by a botnet or an injected vulnerability. Blockchain, a technology that has created a lot of hype and excitement in the technology community, is being proposed as a possible solution to tackle the security challenges that emerge with the rise of connected devices and IoT. Blockchain consists of an encrypted computer filing system that creates records that are tamper proof and real-time. Its encryption capabilities enable security and anonymity and allow for mutual consensus verification that translates into collective network updates and consequently presents accurate datasets at all given times without the need of a central governing authority.

How do Blockchain and IoT work?

IoT expert and lecturer at San Jose State University, Ahmed Banafa states, “Blockchain is promising for IoT security for the same reasons it works for cryptocurrency: It provides assurances that data is legitimate, and the process that introduces new data is well-defined.”

IoT security is a big topic of discussion because of the sheer volume of data that flows between these connected devices and the embedded processors. It is because of this IoT security needs to be comprised of complex authentication, control, and security layers and provide an infrastructure that helps in managing these devices and control data access more accurately and seamlessly. The security framework, thus, has to also consider including layers that eliminate unauthorized devices and cut out bad or hacked devices from the IoT network. What Blockchain does is that it provides a platform for IoT to stay reliably interconnected and avoid threats that can plague the central server and create a secure network that helps enterprises manage physical operations remotely (for example in manufacturing) without having to depend on centralized cloud servers.

Why combine IoT and Blockchain?

It seems that the advantages of combining IoT and Blockchain in today’s environment are really quite simple.

• Blockchain, by nature, is transparent. So the Blockchain records can easily identify any data inconsistencies, leaks or breaks as these activities can be tracked and analyzed by the authorized personnel.
• Blockchain employs the use of encryption and distributed storage. The machines securely record the details of each and all transactions that take place without any human oversight.
• Given that the ‘write-access’ to the Blockchain is held by the machines, overwriting records with inaccurate information is downright impossible.
• Blockchain makes the IoT network more secure since it allows for the creation of agreements that can only be executed when the required conditions are fulfilled.
• Blockchain also mean adding another layer of security to the overall IoT environment so that malicious actors cannot access the volumes of data being exchanged between the several devices on the connected network.

The challenges of Blockchain and IoT

As with any new technology, there are some challenges in implementing Blockchain in IoT as well. Enterprises looking at Blockchain need to take into consideration computational costs as data mining in IoT is computationally intensive while most of IoT devices are resource restricted. IoT applications demand low latency but, mining of blocks can be time-consuming. Enabling fast transaction speeds and verification processes are presently a limiting factor in the IoT and Blockchain equation. One of the biggest advantages of Blockchain, that of decentralization can prove to be a hurdle for enterprises. The move to this decentralized network is essential for Blockchain to work and this shift can lead to integration issues.

As the IoT gains more traction both in personal lives and in the enterprise, it is becoming increasingly clear there will be the need of a facilitator to support this connected economy- a facilitator that places no single individual in charge, creates a network that is equal and secure for interactions, and levels the playing field…and Blockchain ticks all these checkboxes. There might be some issues that we still need to resolve with Blockchain, but as of now, this facilitator is Blockchain.