The demand for a mesh network for transactional procedures has grown manifold with the increase in the number of sensors in machinery, vehicles, buildings and infrastructure. Blockchain solves this purpose.
The Juniper research study reveals that the total number of connected Internet of Things (IoT) can rise from 21 billion to 50 billion by 2022. Moreover, the study claims that the growth of the internet of things may result in the processing of data away from the cloud and near the source over the next four years.
Being a distributed ledger technology, Blockchain comes with a business automation software component, which has the power to centralize the method of data exchange while enabling processes between IoT devices by eliminating the role of middleman that is a server. The idea is to have a distributed network of nodes, which validates all transactions.
The data produced by IoT cannot rely on a conventional, centralized model for management. A requirement for the decentralized approach of blockchain technology is the need of the hour for efficient data management, lower data tampering, and eliminate single-point failures. Data is shared across the network similar to a shared ledger updated in real time.
Businesses have realized the potential of blockchain-IoT approach and are likely to be successful by using this approach in business operations. You need to have the following characteristics if you want to make the most of this approach.
Knowledge of Domain: To get a higher return on investment, data intelligence needs to be applied along with domain knowledge.
Development intricacy: Businesses expect a high-performance computing infrastructure to fasten business operations and meet customer requirements. Therefore, the company should be able to deal with data processing complexities in a bid to meet requirements.
Data management: AI and machine learning need to be used for storing and processing large amounts of data. You need to have a good experience in data handling and processing.
The two cryptocurrencies that are using the IoT to streamline supply chain management are Waltonchain and WaBi. What makes blockchain different is the use of a traceable and immutable ledger for transactions. This distinctive quality makes it aligned with a number of use cases, particularly supply chain management.
Waltonchain and WaBi are just a part of the whole story when it comes to the convergence of cryptocurrency with IoT. The recent advancement in Blockchain has disrupted many industries. About 1500 cryptocurrencies are present today, out of which the blockchain-based Bitcoin has gained the most attention, and many others are mainly built for the IoT.
IOTA, for example, is a cryptocurrency based on a tangle technology, which differs from a blockchain in many respects. IOTA allows a variety of IoT devices to trade in an open market without any fee and enables many business to business models. It represents the potential of the convergence of IoT, embedded devices, and blockchain.
Industrial manufacturing: The manufacturing industry is leveraging the potential of Blockchain and IoT for customer demand monitoring and product development. Presently, devices and systems tend to become interactive, and a blockchain can serve as a global supply chain level ledger, which will cut down costs and drive production.
Connected and driverless vehicles: Now, vehicles have become fully automated with embedded advanced features like navigation, roadside assistance, etc. Implementing Blockchain in connected cars allows their tracking on the digital mesh which further empowers vehicle registration renewals and automatic tracking of fleet insurance policies, etc.
Transportation: The transportation system has become really dynamic as the connected mesh of vehicles fosters the exchange of information which avoids gridlocks and bottlenecks. On the global level, this mesh enables the tracking of shipments.
Public infrastructure and smart cities: IoT devices are greatly used to keep a check on the working of bridges, roads, power grids, etc. Interconnecting Blockchains with IoT can help share efficiencies, forecast usage trends for power usage, and minimize pollution. Moreover, this approach can help monitor natural incidents, prevent a large-scale forest fire, etc.
Financial services and insurance: The use of blockchains is prominent in the financial sector to monitor IoT enabled devices like ATMs, remote tellers, etc. Insurance companies which are taking advantage of drones to check property claims, can use the Blockchain to validate claims.
A report by Hackernoon states that Korean industrial giant Hyundai is supporting IoT blockchain startup Hyundai Digital Asset Currency, which is going to build the IoT based Blockchain.
Filament, a blockchain startup, has launched a new chip that will allow industrial IoT devices to work in sync with other blockchain technologies.
The chip is designed in a way that it will enable IoT sensor data to be coded into the blockchain directly. This is going to enhance the security of decentralized interaction and exchange.
Though many operational and compatibility issues are yet to be solved and the issues raised by IoT blockchain combinations related to compliance have not been addressed, considering the potential behind technologies, the convergence of IoT and Blockchain can empower industries while solving these issues.
With the growing hype of blockchain technology, a number of companies are trying blockchain technology, though IBM is leading the way. A Blockchain is a distributed ledger technology, involving cryptocurrency, mining pools, etc. The combination of IoT and blockchain can refine the world’s most fundamental business interactions while paving the way for digital communications. Moreover, this technology can remove the complexity and cut business operations costs.
Author's Name: Harsha Goel
She is crypto enthusiast who believes crypto can revolutionize the world. By outlining the future of cryptocurrency and digital assets, she helps investors to make the most out of their investments.