6 Benefits of Blockchain and IoT to Promote Market Growth
The Blockchain-IoT marketplace is a blend of blockchain and IoT technology. It has grown in popularity due to the rapid development of technology and communication networks. In addition, the blockchain, powered by cryptographic encryption and decentralized networks, uses the IoT platform using a peer-to-peer network to ensure transparency and security.
The increasing amount of IoT devices and connections that are vulnerable to cybercrime has led to the development of blockchain technology. The benefits of blockchain IoT include the speed of data changes and lower costs, improved privacy and efficient logistics, supply chain and insurance.
The Internet of Things (IoT) connects people, places and products. By doing so, it allows for value creation and capture. IoT’s analytics capabilities use these data points to translate insights into actions, impact business process and result in innovative ways of working.
The powerful combination of blockchain and IoT
According to ISG, Blockchain is a distributed ledger technology that allows machine-to-machine transactions to be feasible when combined with IoT. Using a collection of transactions stored in databases, they are verified by multiple sources before being entered into a shared ledger that is distributed to each node. The combination of IoT and blockchain allows smart devices to operate independently without a central authority, which provides a number of benefits. It can also monitor the ways devices communicate with each other.
While the decentralization aspect of blockchain technology is an advantage in design, it can create problems for IoT because these platforms are based on a hub-and-spoke or client-server architecture that is a central authority. An IoT platform designed to be decentralized can help ensure that it is compatible with blockchain networks; However, it may not be easy to set up IoT sensors to manage their own data storage and processing, as they rely on storage resources and central processing.
Integration of Blockchain and IoT will drive the market in the coming years
Although both blockchain and IoT are powerful combined, the combination of these two technologies can be used by businesses. A study conducted by Aftrex Market Research in 2018 discovered that the total Blockchain and IoT market could grow to $254.31 billion by 2026. Below are five benefits of IoT and blockchain technology that will boost the market’s expansion in the years to come.
Blockchain for accelerated data change
Based on Aftrex Market Research, one of the biggest benefits of combining IoT and blockchain has been faster data changes. However, according to reports, blockchain’s current implementation is not without drawbacks in this aspect because it limits the number of transactions performed per second. Therefore, a more business-like solution, such as a permission-based blockchain, is required to handle the amount of data needed, devices that are part of the IoT, and the speed of transactions between two parties.
A blockchain that reduces the time needed to validate transactions by using trusted nodes is essential to cope with IoT performance requirements and can manage IoT’s rapid IoT information exchange.
Improved security with Blockchain
Security is among blockchain’s primary benefits due to its ability to validate the information and ensure that it is from a trusted source. Due to the large number of devices that are part of the IoT, this feature is particularly beneficial. The combination of IoT and technology can help strengthen privacy agreements and improve communication security.
This is not just for devices – it is also people to people, devices to devices and devices to people. This trusted ledger easily shows who has access to the account and who makes transactions. A log of each transaction is an important advantage. Businesses currently using an amalgamation of blockchain and IoT often rely on security measures such as device authentication, but this is only the tip of the iceberg.
More efficient supply chain
One of the main goals for many businesses is to make the supply chain more efficient. But many problems in the global economy hinder this process. Disintermediation blockchain and IoT can increase supply chain efficiency and speed, accelerating transactions while reducing costs. Since the blockchain acts as a validator, to some extent, non-trusted parties can share data directly, eliminating the costs associated with each hop.
Room for growth with the Blockchain
The use of IoT-based blockchain technology is not yet widely used due to operational and technical issues. For example, scalability and storage are two major issues with blockchain systems that maintain an extensive central ledger. Storing the ledger on edger nodes is inefficient because smart devices at the edge are unable to handle large amounts of computing power or store large amounts of data.
Although the concept of IoT blockchain technology is still in its infancy, it will be a major factor in the coming years. The implementation of standards and regulations and security guidelines will help encourage the use of IoT blockchain technology. In addition, with new standards for peer-to-peer communication and data transparency, blockchain can provide a higher level of security for the web.
Lower costs
The most recognized benefit for businesses is the ability to cut operating expenses. Blockchain allows data to be transferred on a peer-to-peer basis, without centralization of control, reducing costs for business. Building a highly reliable centralized infrastructure is likely to cost a lot. Decentralization is an effective way to eliminate single sources of error and address the scale of the IoT.
Streamlines accounting
Accounting is among an organization’s primary departments that can immediately benefit from the increased transparency offered by blockchain and IoT. First, companies need to understand what they are sharing/exchanging data/money over a linear, time-stamped chain.
How does Blockchain accelerate the potential of IoT?
The blockchain is an amazing technology with huge potential to make the IoT work efficiently. Because security is the main concern of IoT which has prevented the widespread adoption of IoT. IoT devices are often plagued by security flaws, making them a prime target for Distributed Denial of Service (DDoS) attacks. These are the main concerns for blockchain-related IoT devices:
Tamper proof
The distributed ledger used in the blockchain system is secured against tampering. It removes the need to trust the parties involved and provides the necessary security to devices or platforms, improves the user experience and reduces the amount of work.
Autonomy
Through the integration between IoT and blockchain networks, gadgets will have the ability to exchange information without having to use multiple servers. In addition, it will ensure that there are no failures on any node in the network, which could cause the entire network to shut down.
Robust level of encryption
The use of blockchain for storing IoT data will add a layer of protection that hackers need to change within every block in the chain to gain access to the network. In addition, blockchain offers a higher level of security. This makes it difficult to change existing data records and even more difficult.
Decentralization of networks
Due to the decentralized approach, using the Internet of Things network will help to solve many of the problems. Such as Peer to Peer communication models to handle billions of transactions between the devices. Also drastically reduces the costs of establishing and maintaining the huge central data center.
Trust and security
By creating trust among the parties involved, blockchain can help IoT companies cut costs. This eliminates processing costs associated with IoT gateways (e.g. traditional protocols, hardware or communication costs).
The Key Takeaway
According to an August 2018 Twitter survey, 57% of respondents said they would never use blockchain technology. In contrast, only 12% of the participants in the survey have used distributed ledger technology.
Based on the analysis of Leone, Blockchain and IoT can be a wonderful combination. But we have some time before this innovative business tool will become commonplace in enterprise technology. Therefore, it is wise to start planning for this now.
Featured Image Credit: Photo by Anna Nekrashevich; Pexels; Thank you!
