Figure 1: Blockchain IoT networks
Integrating blockchain technology into IoT networks enables device-to-device transactions. These transactions get recorded and stored in the blockchain’s distributed network across many nodes. Multiple sources then verify this record. By leveraging the capabilities of blockchain technology in IoT networks, smart contracts automatically trigger transactions among IoT devices when they meet pre-determined conditions. This technology creates the perfect environment for the autonomous functioning of smart devices by removing the need for a centralized authority while enhancing the security and tracking of device-to-device communication facilitated by smart contracts.
While blockchain’s architecture offers a range of benefits due to its decentralized nature, some challenges exist. IoT platforms have a client-server model with a centralized authority. Organizations should develop IoT platforms in a decentralized manner to ensure compatibility with blockchain, necessitating the IoT sensors to handle their storage and compute resources instead of utilizing centralized resources.
The benefits of blockchain IoT
Data decentralization and security
IoT device data is often stored and managed by centralized servers, leaving vulnerabilities that malicious actors can exploit. With a central storage location, the risk of network failure is high. With data computation and storage spread across a vast range of devices numbering in the millions, the network becomes invulnerable to the loss of a single device, server, or central network. This capability contributes to the resiliency of IoT networks with blockchain technology. The network has high fault tolerance and can operate even with multiple offline nodes. High-level security is ensured by authenticating and authorizing encrypted device data with distributed ledgers.
Secure updating capabilities
Organizations can efficiently address outdated IoT issues as the safety of blockchain allows for the secure transfer of code on IoT devices. Testing this capability has yielded satisfactory results, with an open-source blockchain utilized for firmware updates over a wi-fi connection.
Blockchain can validate transactions by concealing the connections between devices while preceding third-party implementation options. Organizations can avoid data leaks and hacking incidents with blockchain’s ability to optimize IoT protocols and supply encryption.
Enhanced data management
Blockchain streamlines data management significantly by allowing devices to transfer data directly among them instead of transmitting data via a centralized server, reducing the number of transactions. The absence of IoT gateways and intermediate devices optimizes data processing time. Furthermore, blockchain-enabled intelligent contracts can convert much of the traditional IoT processes into automated processes. By driving efficiencies in data management across edge devices, organizations benefit from reduced costs for IoT device maintenance and data transfer.
The decentralized nature of blockchain IoT networks allows for improvements in transaction speed and coordination between connected IoT devices, which, combined with the ability to share data, paves the way for better scalability.
Decentralized PKIs, used by blockchain networks, are superior to centralized PKIs since only the user has access to the personality identification hidden key. In contrast, the network provider accesses the open key. These keys are cryptographically generated, making them invulnerable to hacking attempts.
With blockchain technology and smart contracts, automatic commands and messages are possible in IoT networks, enabling data analysis and scenarios such as automatic filling of custom documents.
Different approaches for implementing IoT blockchain
This method makes blockchain integration into IoT networks relatively straightforward, using only a sharing register for data storage. Routing mechanisms ensure that data transfers take place out of the blockchain, driving higher transaction speed and reducing lags. Moreover, this approach enables offline capabilities for IoT devices. With the IoT-IoT approach not requiring significant workflow changes for devices on the network, it is relatively a simple solution. It only needs replacing a cloud/server with a blockchain for the transfer, storage, and data extraction.
Here, IoT devices interact through the blockchain, which serves as a kind of cloud for the traditional IoT network, leading to tracing improvements, communication security, workflow automation, and capacity. However, the increased complexity of this mechanism can also lead to delays. It is an approach that requires significant modifications to the workflows of IoT devices and blockchain development. Additionally, it will require a blockchain with high speed, capacity, and zero fees.
Here, the blockchain stores some types of information while sharing most of the data and communication across IoT devices. While it offers a range of advantages, the low delays and high working speeds required of the IoT devices are not practical. Notably, this approach enables fog computing to overcome the limitations of IoT devices and blockchain. Organizations can use this method to store, extract, and analyze private data. Using edge devices instead of a centralized cloud translates into savings in operating costs.
IoT blockchain — adoption and challenges
There are technical and operational limitations to the widespread adoption of IoT blockchain technology. Foremost among them are the challenges in scalability and storage in blockchain networks that maintain centralized ledgers. This issue happens when storage on edge nodes is inefficient as intelligent devices at the edge are ill-equipped to handle high-volume data or high computational demands. But even though IoT blockchain is an emerging technology in its nascent stage, it is seeing adoption from significant technology organizations, including the IBM blockchain platform, which allows businesses to leverage IoT blockchain and cognitive computing. Organizations have implemented blockchain across industries spanning from BFSI to agriculture and smart homes, supply chains, and smart contracts.
Unleashing new efficiencies with IoT blockchain
While the application of blockchain in IoT may not be a mature field yet, it will have a considerable impact shortly. Blockchain today suffers from a lack of regulation and consistency across geographies. Improvements in the standardization and regulation of blockchain technology will increase IoT blockchain’s commercial practicality and feasibility for enterprises and businesses everywhere. With its transparency and peer-to-peer communication, blockchain has the potential to drive security improvements across industries. It will pave the way for a new kind of interconnectedness and efficiency for businesses everywhere.