IoT powered by Blockchain ensures better scalability, performance & trustworthiness
Blockchain technology will not only help in tracking millions of connected devices, but at the same time also enable these devices to process transactions and coordinate among each other with better scalability and performance. This decentralized approach would invariably create a more resilient ecosystem for devices to run on. Use of blockchain will truly help execute financial transactions, without the need for a centralized party or intermediaries. This type of autonomy is possible because the nodes in the blockchain will authenticate the transaction without relying on a centralized authority.
The IoT is vulnerable to a wide variety of network attacks that undermine its confidentiality, integrity, authentication and availability. Blockchain already implements several mechanisms including data security, data integrity, authentication, public/private encryption, hashing, consensus and fault-tolerance whose effectiveness in terms of security have been widely investigated and verified w.r.t many networking scenarios. The combination of blockchain and IoT has disruptive potential in terms of helping IoT’s expansion in our society by providing multiple advantages including decentralization, absence of third-party validation, non-repudiation of transactions and anonymity of identity.
To sum up, blockchain can serve as a tool to both log data in a form highly resistant to tampering, and to fight the introduction of malicious IoT devices into networks and this can complement IoT systems with the improved privacy and security. The most common IoT applications nowadays over blockchain can be witnessed in the areas of smart energy, smart environments, robotics, transportation, and supply chain.
According to a recent report published by Gartner, there will be 20.4 billion connected IoT devices, almost three per person, in 2020. While the upcoming 5G also promises to provide unprecedented speed and scale to IoT operations, it brings along a new generation of security threats. Moreover, traditional security models optimized for 4G/LTE cannot fit neatly to address 5G-enabled IoT, especially in areas like edge-focused processing, the vast distribution of decentralized, small-cell networks. Under such a scenario, blockchain technology will thus emerge as the most effective next-generation technology since it is appropriately suited to respond to both the challenges and opportunities of a 5G-enabled IoT. However, we need to address the various issues (e.g. slow performance, scale) faced by blockchain technology before integrating it with IoT, as 5G rollout will encompass an explosion in transactions between these devices.
Scalability, security and decentralization are prerequisites to any blockchain-based IoT network, and deficiencies in any of these three areas could be catastrophic for users and would undermine the purpose of using such a protocol. Hence, IoT networks will have more limited use until there is some alternate design to achieve high throughput over blockchain without sacrificing security or decentralization.