Blockchain is becoming a ubiquitous term in the world of technology. The effects of Blockchain technology on Internet of Things are revolutionary. But before we delve deeper into the interconnection of Blockchain and IoT, let’s first briefly understand what blockchain really is. In very simple words, blockchain is an open source technology that is used to record transactions. Blockchain is a digital ledger which is shared among several parties. The parties can make changes to the simultaneously. The digital information to be distributed but not copied. Initially, blockchain was designed for cryptocurrencies like Bitcoin. But today, experts see blockchain as a driving force behind a secure, faster Internet of Things.
No Centralization, Improved Security
Blockchain can practically take out the centralization that plagues most of the Internet of Things platforms these days. This centralization has resulted in several hacking attacks. Blockchain technology can helps experts design algorithms to control remote sensors without any central control system. In fact, Australia-based telecom company Telestra is using blockchain to secure smart home device. The company is using a private blockchain system to verify biometric data of users. This way, the data doesn’t go to the central servers. But all the access data and record is maintained in the digital ledger. Researchers at University of New South Wales, Sydney, Australia, replaced internet routers with blockchain miners in order to manage local network transactions. This model allowed the researchers to completely block a home device, let’s say a lightbulb, as soon as it starts behaving oddly.
Blockchain Will Make IoT Devices Truly Smart
Currently IoT device cannot make decisions on their own. Blockchain can enable IoT device to take autonomy and decide based on owner’s preferences. For example, a smart washing machine can use blockchain technology to order detergent from Amazon and pay via Bitcoin in the future. This scenario is the perfect example of AI, machine learning and IoT in action. In 2015, IoT and blockchain expert Andrew Miller tweeted something that sums up the scenario I’m trying to explain:
#InternetOfThings is when your toaster mines bitcoins to pay off its gambling debts to the fridge
— Andrew Miller [2X] (@socrates1024) October 20, 2015
Tracking Resources Efficiently
Blockchain will also help companies track their resources and keep a check on their quality. Unlike sensors, which only relay data and signals through IoT device, blockchain can make sense of this data and help companies take optimized business decisions. Walmart recently started using blockchain technology for food safety. It had become impossible for Walmart to track food items that had been recalled by its manufactures. Blockchain is helping the company to update its ecommerce data and generate alerts in real time as soon as a recall is made. Apply this example to IoT-based fleet management, fire sensors, smart home devices etc. Blockchain can really make IoT device smart and powerful enough to make decisions. Earlier this year, Bosch presented a blockchain-based solution to track distances recorded on vehicle odometers to fight insurance frauds.