The Internet of Things connects people, products, and places. Therefore, it brings about opportunities for value creation as well as capture. IoT analytics uses data created by millions of devices to turn insights into critical action. It can have a drastic impact on business processes and create new ways of doing things. However, security and technical concerns remain unaddressed.

IoT’s security problem has made it difficult to scale up its deployment. IoT devices are vulnerable to Distributed Denial of Service attacks (DDoS). Indeed, DDoS attacks involve multiple compromised computer system attacking a target (e.g., a central server) with large volumes of simultaneous data request, resulting in a denial of service for the targeted system.

Unfortunately, DDoS attacks have caused extensive disruption for individuals and companies in recent years. Unsecured IoT devices offer easy targets for hackers, as they can hack them into launching DDoS Attacks.

In addition, IoT networks are unable to scale. As more and more devices connect to an IoT network, the current centralized systems used to authenticate, authorize, and link different nodes will become a bottleneck. This would require large investments to build servers that can handle huge amounts of information . Additionally, the network may go down if the server fails.

IoT devices will become an essential part of our daily lives in coming years. Therefore, it is vital that organizations invest in security and scalability.

Blockchain Technology and IoT

Another technology that is a breakthrough, blockchain -also known as distributed ledger technology (DLT)-, has the potential to help solve some of the IoT security or scalability issues. Blockchain is an information game changer because of its distinct capabilities.

The foundational aspect of a blockchain system is a distributed, digital ledger. All participants share it and can access it on the Internet. Any transactions or events validated and recorded in this ledger cannot be altered or removed. Thus, it allows users to record and then share information amongst themselves.

Selected members of the community maintain this ledger. They collectively approve transactions via a consensus process before recording them onto the ledger.

How Can Blockchain Help Solve IoT Security Problems and Scalability Issues?

The IoT network processes data transactions across multiple devices. Various organizations can own and manage these devices. In the event of an attack by cybercriminals, it is difficult to pinpoint where data leakages occurred.

Furthermore, IoT produces a lot of data. Ownership of this data is often unclear due to multiple stakeholders.

Blockchain can help to ease security and scalability concerns related to IoT:
  • The tamperproof distributed blockchain ledger is secure. This removes the need for trust between all the parties. Each organization cannot control the massive amount of data generated by IoT devices.
  • The use of blockchain to store IoT information would provide an additional layer of security that hackers would have to bypass in order gain access to the network. Blockchain uses a stronger encryption level that makes it almost impossible to alter existing data records.
  • Blockchain provides transparency. Anyone can access the blockchain to see transactions from the past. So this can be a reliable method to find the source of data leakages and swiftly remediate them.
  • Blockchain can be used to speed up transaction processing and coordination of billions upon billions of connected devices. The distributed ledger tech is an option that can support processing large transactions because of the growing number of interconnected devices.
  • Blockchain can help IoT companies lower their costs by eliminating the processing overhead for IoT gateways. There are traditional protocols, hardware, and communication overheads.

Smart contracts are agreements between two parties, stored in blockchain. Hence, this gives ways for the execution of contractual arrangements among stakeholders on condition that they fulfill specific criteria. If the conditions to provide a service are satisfied, smart contracts will automatically authorize payments.

Some Blockchain Use Cases

The combination between blockchain and IoT holds great potential to create a marketplace for services between devices. This gives companies an opportunity to make value from collected data . IoT is seeing a growing number of IoT providers, partners, and protocols for blockchain.

Following are some Blockchain-IoT actors and their use cases.
  • The Blockchain Chain of Things (CoT) is a group of techies and leaders in blockchain technology. It seeks to identify the most beneficial use cases in which blockchain and IoT combine to provide benefits for humanitarian, industrial, and environmental purposes. CoT’s Maru is an integrated IoT-blockchain solution for security, identity, and interoperability. Chain of Security is the most developed use case. Chain of Solar and Chain of Shipping are two others.
  • IOTA is a protocol for fast transaction settlement. It also ensures data integrity. IOTA is a promising infrastructure in IoT devices which need to process large amounts. Tangle’s distributed ledger supports IOTA and features include machine-to-computer communication, cost-free micropayments, and quantum resistance data. IOTA has established a sensor data marketplace and is now entering market for data driven insights. It is supported by over 20 global corporations.
  • Riddle&Code supplies cryptographic tag solutions for blockchains used in smart logistics and supply-chain management. Riddle&Code specializes in the integration of IoT devices to distributed ledger systems. They offer a combined patented software and hardware solution that allows for secure and trusted interactions with machines in the IoT era. This is done by giving any device and machine a trusted digital ID. This technology breaks down the digital/physical gap to find a compromise between the need to have paper documentation and the benefits offered by blockchain technology.
  • integrates IoT sensors with Blockchain technology, providing data integrity in transactions involving physical products. Modum sensors monitor environmental conditions while goods are in transit. The smart contract on blockchain verifies the data against predetermined conditions when the goods reach the next transit point or customer. The contract verifies that the conditions meet the requirements of sender, clients, and regulators, and triggers various actions including notifications to receiver and sender, payment, and release of goods.

Primary Considerations Regarding the Adoption of Blockchain and IoT Technologies

As explained earlier, IoT’s security architecture has been a problem. A central authority controls this centrally managed client-server model. As a result, it becomes vulnerable to single points of failure.

Blockchain focuses on this problem by decentralizing the decision-making process to a consensus-based network of devices.

Nonetheless, there are three key challenges to be aware of when designing IoT device architectures that work with a blockchain ledger.

  1. Scalability. IoT has many problems. Is it possible to scale the enormous amounts of data collected by large networks of sensors? Or have lower transaction processing speeds? Preparing a clear data structure can help to save time, and it will also prevent any problems in bringing the solution into production.
  2. Network privacy and transaction confidentiality. Transaction history cannot be stored in the shared ledger of an IoT network of devices. This is because public blockchains do not allow for transaction privacy. Transaction analysis allows for inferences to be made about users and devices behind public key. Thus, organizations should review their privacy requirements to determine if hybrid blockchains or private ones might be better suited for them.
  3. Sensors. Improper measurement of criteria to execute transactions could cause IoT sensors to fail to function properly. For data recording and transactions to be safe, IoT devices must be protected from outside interference.

In conclusion, IoT is an emerging technology with great potential. But, due to technical and security issues, it hasn’t become very popular. A handful of companies are already developing use cases that combine both technologies. They offer a way for companies to reduce security and other risks.