Can the IoT Benefit from Blockchain Technology?
By Marc Kavinsky, Editor at IoT Business News.
There are two technologies we’ve heard discussed a lot in recent years, blockchain technology and the Internet of Things. Both have been promising to revolutionise the way we live, making the world more convenient, safer and more decentralised.
The Internet of Things has been rolled out to both businesses and consumers. Smart home devices like internet-connected thermostats and lights are great examples of this. While businesses regularly use IoT devices to monitor the efficiency of processes in production and logistics.
The most prevalent example of blockchain technology is in cryptocurrencies. These digital alternatives to traditional currencies take some of the qualities of gold and combine it with a decentralised mechanism for governing and policing its operations.
With no central bank, cryptocurrencies like Bitcoin, Ethererum and Litecoin have a public ledger listed on the “blockchain”. Instead, computers, or ‘nodes’ operate around the world process and verify transactions.
These cryptocurrencies can be used in a small but growing number of places for day-to-day commerce. For example, it’s now possible to buy your morning caffeine fix from Starbucks or new stationery and furniture from Office Depot. Enthusiasm for crypto is beginning to gather pace, with many blogs and crypto news sites reporting on the latest developments.
But can these two revolutionary technologies be combined to extract the benefits from both at the same time? Market Research seems to think so. It has forecasted the two could be worth $254 billion by 2026.
The Internet of Things has been held back by the inherent security issues that come with having many devices connected to a network. They’re attractive targets for computer criminals who want to launch Distributed Denial of Service (DDoS) attacks since they can launch many simultaneous attacks when infiltrating a single network. IoT devices have (traditionally at least) been harder to secure than computers and other devices.
Smart refrigerators , WiFi routers and connected thermostats are all common targets for this kind of attack, particularly when they are left with their default password.
Blockchain technology can be used to tackle this security challenge. Firstly, the distributed ledger is immutable, as in tamper-proof, meaning trust between each device doesn’t need to be established in the same way. Data leaks can also be more easily identified since they are recorded permanently in the ledger.
Additionally, blockchain provides better encryption and an additional layer of security, making it harder for hackers to infiltrate a network.
As networks of Internet of Things devices grow, it can be difficult to authenticate and authorise each device on a centralised network due to the high levels of resources...