Blockchain technology has already had a “peak of hype” and a “trough of disillusionment,” but it may be on the rise again.
Even though the ups and downs of cryptocurrencies like bitcoin have cast doubt on blockchain technology, recent events like COVID-19 and their effects on the connected economy have made it more important than ever to digitize transactions.
Blockchain is a digital ledger technology that lets organizations do business digitally. It records these transactions in a way that can’t be changed across a network of computers that are all connected to each other.
In fact, recent events like COVID-19 have brought blockchain development to the forefront, as social distance and fewer workers on-site sped up digital trends.
Potential Benefits of Blockchain and IoT
Andres Ricaurte, senior vice president and global head of payments at an IT services company, said that a blockchain’s distributed ledger can’t be changed, so people don’t have to trust each other to use it. Because of this, no one is in charge of the huge amount of data that IoT devices create. Encrypting data on a blockchain makes it almost impossible for anyone to erase old data records. Using blockchain to store IoT data also adds another layer of security to stop bad people from getting into the network.
The combination of the Internet of Things (IoT) and blockchain open the door to new possibilities that reduce inefficiencies, improve security, and increase transparency for everyone involved. It also makes it possible for machines to make secure transactions with each other. When these technologies work together, it is possible to track a physical asset from the time raw materials are mined all the way through the supply chain until it reaches the end consumer.
Integration of Blockchain and IoT has the Following Benefits.
Blockchain technology is safe because it can check and approve transactions that were started by a trusted party and encrypts data while it is being sent and stored. Blockchain technology makes it clear who has access and who is making transactions, and it keeps a record of everything that has happened. Also, blockchain adds a layer of security through encryption, the removal of a single point of failure, and the ability to quickly find the network’s weakest link.
By automating the steps of validating and processing transactions on blockchain, the whole ecosystem can become more proactive for less money.
Speed of Transactions
This is especially true when there are many suppliers, producers, distributors, and consumers along the supply chain. Since the blockchain is kind of like a shared ledger, untrusted parties can share information directly with each other. This cuts out the need for manual processes and speeds up transactions.
Blockchain is an example of a technology that sounds like it could be a game-changer but hasn’t really caught on outside of cryptocurrencies. Let’s start with the customer and work backward to figure out how blockchain can help the Internet of Things.
Costs, security, privacy, and the exchange of data are just some of the problems that IoT deployments face. Even though these are different problems, there are many ways in which they are linked. Customers of IoT, who are often a group of business partners working together, need the data and insights from IoT devices quickly, at a good price, and they must be reliable. The blockchain can serve as the main ledger for all of these things.
Real Use-Cases of Blockchain and Internet of Things
Here are some ways that blockchain and IoT can be used:
Smart Contracts and The Supply Chain
John Thielens, the CTO of Cleo, said that IoT and blockchain development consulting services can be used together to make sure that the quality of the supply chain is good. Goods that spoil quickly, like wine or rare foods, are often exposed to different temperatures and amounts of light as they move through transportation and storage networks. “By combining IoT and blockchain, the journey of goods that go bad can be tracked from the producer to the store,” Thielens said. “At the case or pallet level, location and temperature data can be collected and added to the blockchain. This makes it possible to check the history of the product as it moves through the supply chain and refuse to accept the product and move it forward if the terms of the handling contract have been broken.”
The Gartner Inc. report “Integrating Blockchain with IoT Strengthens Trust in Multiparty Processes” says that IoT sensors placed in leased trucks can record key events on a blockchain. This can help manage fleet locations and returns and also make billing more meaningful.
“With IoT sensors on trucks, truck leasing companies could charge renters based on the torque of the loads instead of the miles are driven, which is what they do now,” the report said. “The blockchain distributed ledger technology makes it possible for all participants to agree on a single version of the truth. No one person or group has control over the data, and each trucker and leasing company can check their own copy of the distributed ledger. This integration of blockchain and IoT should help leasing companies make more money and spend less.
The Oil Operations and Field Service
The Garter report says that IoT sensors on oil and water wells can help oil companies manage the performance of hauling companies that pick up and deliver oil and water from the wells and take them to different places, such as places to dump environmental waste.
Problems with Integrating Blockchain and IoT
Paul Brody, global innovation leader for blockchain technology at EY, says that one of the biggest problems with combining blockchain and IoT is that some IoT devices have short battery lives that make it hard to do certain things.
Some IoT devices are always connected to power and Wi-Fi, so you don’t really have any big limits. But many IoT gadgets aren’t. And you can’t run a blockchain transaction system that needs a lot of processing power and bandwidth on a very, very small device. So, they might need to use a server-based infrastructure or get help from a gateway device or a device that works with gateways. So, by their very nature, these ecosystems will have to be ones that work well together.
Blockchain and IoT can work really well together. But it’s important to remember that blockchain and the Internet of Things are not developing at the same rate.
For example, blockchain has limitations like not being able to handle large amounts of data, having problems with regulations and data privacy, and not being able to be scaled up. All of these are necessary for enterprise adoption. IoT technology also needs to show that the infrastructure is safe, effective, and reliable. Before new business solutions become standard in enterprise technology, it still needs to get past these problems.