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Blockchain, Featured, Technology

Blockchain and IoT: Merging Innovations for Cutting-Edge Digital Transformation

The Internet of Things has pushed forward business operations around the world, proliferating the use of sensors and other equipment, leading to better data extraction from machines. Its use is now widespread- there are billions of devices utilizing IoT across the globe, and the adoption rate is soaring further. The main challenge in front of IoT is preventing the user’s confidential information from falling into the wrong hands. A synergy between the two technologies- IoT and blockchain, complements each other leading to better productivity while addressing all the security concerns attributed to the former.

Factors being  the Meteoric Rise of  Blockchain Technology

The underlying platform behind cryptocurrencies, i.e. blockchain utilizes a distributed ledger mechanism. This allows consistent real-time visibility of data exchange and digital asset transactions within the network. In addition, the following characteristics also contribute significantly to blockchain’s worldwide success:

  • Immutability

Information once registered within a blockchain is permanent and immutable. It is also accurate, having passed majority consensus throughout the network.

  • Higher Transparency

Information stored across a blockchain network is identically recorded across each ledger copy. Network members with permission access can view the same updated copy featuring time and date stamps, reducing the chances of fraud.

  • Smart Contract Automation

Blockchain-powered Smart Contracts are used by organizations globally for automating transactions once the pre-written conditions have been met. This eliminates the chances of human error.

  • High-Grade Security

Sensitive data stored within the blockchain network is protected through end-to-end database encryption, permissioned access mechanisms, and making personal data anonymous. The information is also unalterable. 

  • Removal of Intermediaries

Real-time information access and transparency across the entire blockchain network eliminates the need for intermediaries, significantly reducing processing time and costs involved. 

Also Read: Impact of Blockchain, Metaverse, and Web3 on Enterprises

Why Integrate Blockchain and IoT?

As explained above, the widespread proliferation of intelligent interconnected IoT devices has contributed tremendously to the Fourth Industrial Revolution. The global digital transformation has empowered industries with the ability to acquire data, generate valid insights, and perform efficient decision-making based on data. 

It is easy to understand that there needs to be a way to verify and validate the information’s authenticity. The need to establish “trust” is essential for business enterprises that would be making critical business decisions based on the data. This is exactly why blockchain is necessary- enterprises need data authenticity to truly optimize analysis and forecasting.

The implementation of IoT has been remarkable, but they all feature a standard ”trust” deficiency. On the other hand, blockchain combined with IoT reinforces the “trust” factor with the former’s inherent properties. On a conceptual level, the idea is to create a unique device ID label at inception which can be verified afterward throughout its entire life cycle. Blockchain-embedded IoT systems can be utilized further using reputation systems and device ID protocols. 

A device ID protocol can deploy one blockchain public key for each device and deliver encrypted response messages to other network devices, safeguarding the identity of the device, and ensuring the IoT equipment remains in control. Devices with ID can also create a history or reputation, traceable across the blockchain network. 

Also Read: Crypto Police: Australia’s Counterattack To Crypto Criminals

Smart Contract Utility

Blockchain-powered smart contracts feature pre-preprogrammed business logic and execute automatically upon completion of the logic. Smart contracts within IoT networks can facilitate automated coordination, interactions, and transaction validation- fulfilling the initial IoT target of simultaneously acquiring surface data parameters and viable insights. 

The application of blockchain-powered IoT is feasible even across smart homes and communities. IoT devices interconnected across a smart home can be used to take action if one of them malfunctions, such as ordering a new one. A New York community makes use of blockchain for recording solar energy generation and actuating renewable energy credit purchases. The IoT device has an identity of its own and builds a reputation by keeping a historical database of records and transactions. Blockchain facilitates easy aggregation of purchasing power, and distribution of maintenance activities, and validates the role of devices in recording proper solar power production. Further adoption of IoT devices will create a requirement for autonomous device management and decision-making, which will be provided by the blockchain. 

Industrial Uses of Blockchain-Powered IoT

  • Supply Chain Management

Supply chain management is a prominent sector that can be benefited from blockchain-IoT integration. Supply chain management networks comprise several stakeholders, brokers, or raw material suppliers. 

Blockchain enhances end-to-end visibility across the entire supply chain network, including transactions and invoices. The involvement of multiple stakeholders also delays project deliveries. IoT sensors used in supply chains include temperature sensors, device connectors, GPS, motion sensors, vehicle information, and more. A practical example of Blockchain-integrated IoT in SCM includes Golden State Foods, which utilizes the technology for optimization of its SCM operations in the manufacturing and distribution of food items.

  • Pharmacy

Blockchain’s integration with IoT has been used in the pharma sector to address global concerns like counterfeiting. The Mediledger application combines blockchain with IoT for reporting the legal ownership changes for prescription medicines. Healthcare items require efficient traceability, provenance, and transparency. The application guarantees the accuracy and validity of the data, complete with date and timestamps. The database is immutable and grants access only to wholesalers, distributors, manufacturers, and end customers. 

  • Automobile Industry

The automobile sector can benefit greatly from the integration of blockchain and IoT. The industry has been one of the major adopters of IoT sensors which have been instrumental in the development of autonomous vehicles. Blockchain-powered IoT structures can make positively disrupt the following segments:

  1. Smart parking 
  2. Automatic fuel payments
  3. Automated vehicles 
  4. Automated traffic control

Wrapping Up

Blockchain’s integration with the IoT opens up unexplored frontiers for businesses and organizations planning to integrate the technology into their existing infrastructure. Blockchain optimizes the process, increasing efficiency and streamlining workflow.

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