25 billion connected ”things” will be connected to the internet by 2020. - Gartner Research

With so much data being generated by these devices, the question on everyone’s mind is: Will all this data be reliable and secure?

When Brains meet Brawn: Blockchain for IoT

Blockchain, an open distributed ledger, is highly secure and difficult to manipulate/corrupt by anyone connected over the network. It was initially designed for cryptocurrency based financial transactions. Bitcoin is a famous example which has Blockchain as its underlying technology. Blockchain has come a long way since then and can now be used to store anything of value. So why not save data in it? And this data will be secure just like every digital asset in a Blockchain is.

Blockchain, decentralized and secured, is an ideal structure suited to form the underlying foundation for IoT data solutions.

Current IoT devices and their data rely on the client service architecture. All devices are identified, authenticated, and connected via the cloud servers, which are capable of storing ample amount of data. But this requires huge infrastructure, which is all the more expensive. Blockchain not only provides an economical alternative but also since it works in a decentralized fashion it eliminates all single point of failures, creating a much secure and tougher network for IoT devices. This makes IoT more secure and reliable. Customers can therefore relax knowing their information is in safe hands. Today, Blockchain’s capabilities extend beyond processing financial transactions - It can now track billions of connected devices, process transactions and even co-ordinate between devices - a good fit for the IoT industry.

Why Blockchain is perfect for IoT

Inherent weak security features make IoT devices suspect. On the other hand, Blockchain with its tamper-proof ledger makes it hard to manipulate for malicious activities - thus, making it the right infrastructure for IoT solutions.

Enhancing security through decentralization

Blockchain makes it hard for intruders to intervene as it spans across a network of secure blocks. Change at a single location, therefore, does not affect the other blocks. The data or any value remains encrypted and is only visible to the person who has encrypted it using a private key. The cryptographic algorithms used in Blockchain technology ensure the IoT data remain private either for an individual organization or for the organizations connected in a network .

Simplicity through autonomous 3rd-party-free transactions

Blockchain technology is already a star in the finance sector thanks to the adoption of smart contracts, Bitcoin and other cryptocurrencies. Apart from providing a secured medium for financial transactions, it eliminates the need for third-party brokers such as banks to provide guarantee over peer-to-peer payment services. With Blockchain, IoT data can be treated in a similar manner, wherein smart contracts can be made between devices to exchange messages and data. This type of autonomy is possible because each node in the blockchain network can verify the validity of the transaction without relying on a centralized authority. Blockchain backed IoT solutions will thus enable trustworthy message sharing. Business partners can easily access and exchange confidential information within the IoT without a centralized management/regulatory authority.

This means quicker transactions, lower costs and lesser opportunities for malicious intent such as data espionage.

Blockchain's immutability for predicting IoT security vulnerabilities

Blockchains maintain a history of all transactions made by smart devices connected within a particular network. This is possible because once you enter data in a Blockchain, it lives there forever in its immutable ledger. The possibilities for IoT solutions that leverage Blockchain’s immutability are limitless. Some obvious uses cases are more robust credit-scores and preventive health-care solutions that use data accumulated through wearables.

For all the above reasons, we see significant Blockchain adoption by IoT based businesses in the near future.