Blockchain and IoT: new model of economics and business
Experts from Gartner research firm believe that synergy of blockchain and Internet of Things will bring productive positive results.
Specialists in both technologies agree with this conclusion. They believe that concepts of DLT and IoT are similar and complement each other. Let’s find out how two technologies can work together and how productively they can cooperate.
What hinders the development of the Internet of Things?
Today the IoT technology is expanding slowly. The development is hindered by several complications.
Most of IoT apps have a centralized control system, which significantly slows down the growth of the technology. IoT sensors collect a huge amount of data, which leads to the overload of the backhaul network when data is sent to centralized cloud depositaries.
Besides, huge capacities are required to process data in a centralized cloud.
Low protection level
Due to the low level of protection, the technology received the name Internet of Threats. The bigger number of interrelated devices, the more hacking attacks and cracks.
Lack of coordination
The problem of many IoT devices lies in the fact that they work in unrelated systems. To manage devices, one usually has to use several apps, programs, and control units. To solve the problem, one has to build a platform capable of uniting a variety of systems.
Why IoT needs blockchain?
Decentralization of computations and development of IoT solutions based on blockchain help the IoT technologies to advance. Blockchain allows realizing IoT projects and gives them certain advantages.
Scaling and cost
Scaling IoT solutions in centralized cloud platforms is very difficult due to the great number of devices. Blockchain offers a possibility of decentralization.
Besides, the technology helps to reduce transaction costs, as decisions are taken automatically, basing on cryptographic protocols. Thanks to blockchain, excessive nodes are excluded from IoT systems being replaced by the consensus algorithm.
IoT devices suffer from DDoS attacks, so the big number of devices is the main security problem in the IoT field.
However, thanks to the distributed structure blockchain can solve this problem. It will ensure security of digital identification in IoT apps and protect data against unauthorized changes.
New economy model
Head of 482.solutions blockchain project and CTO of REMME IoT startup Roman Kravchenko views blockchain as a new economy model of IoT solutions. The expert notes that blockchain provides a possibility to create crypto economic clusters that will have interior token economy.
However, according to him, blockchain’s success as an economic tool depends on the readiness of business and government to accept this approach.
Examples of DLT and IoT interaction
Blockchain and Internet of Things are used together at a number of companies abroad and in Russia.
In 2015, the major corporation IBM started the partnership with Samsung developing ADEPT, an autonomous decentralized peer-to-peer telemetry network.
The system possesses technological elements of Bitcoin that help to build a distributed network of IoT devices.
Using such a platform, devices automatically notify about difficulties in operation and download software updates to solve the problems.
Filament developed a sensor device called TAP that allows setting up a secure wireless network for the IoT and gather data from sensors in a metropolis.
Devices can connect to each other at a distance of up to 15 km, and blockchain allows them to share data using smart contracts.
The Ukrainian startup REMME develops a blockchain-based protocol Open Source that ensures the authentification of IoT devices without passwords.
CTO of REMME Roman Kravchenko explains that the protocol provides tools intended to control the distributed infrastructure of public keys.
Prospects of joint development
Roman Kravchenko believes that the number of blockchain-based IoT projects will be growing in the next few years thanks to the positive synergistic effect.
Approaches used in the IoT field allow building network architecture and provide devices with methods of interaction. In its turn, blockchain realizes decision-making processes basing on cryptographic mechanisms. The expert forecasts that blockchain will become something like DNA for IoT systems.
Experts will discuss the IoT technology at the sixth international Internet of Things Forum.