Internet of Things and Blockchain Convergence
The Internet of Things or IoT is a term that we hear a lot in the Tech industry these days, but what is it actually. In this article we will briefly cover what IoT is and examine how Blockchain technology fit in the IoT picture.
Wikipedia defines IoT as ‘’the network of physical devices, vehicles, home appliances and other items embedded with electronics, software, sensors, actuators, and connectivity which enables these objects to connect and exchange data. Each thing is uniquely identifiable through its embedded computing system but is able to inter-operate within the existing Internet infrastructure.’’
So in simple terms IoT is the technology that connects all electronic devices, gather data, and use that data to make our lives easier and automated. The next video perfectly demonstrates real life examples of this incredible technology.
IOTA- The first notable implementation of Internet of Things and Blockchain Technology
IOTA is currently the 11th biggest token in terms of market capitalization. IOTA aims to be the backbone of the autonomous machine technology. IOTA though doesn’t exactly use Blockchain Technology, but a technology developed by the IOTA team called Tangle, which is another protocol, like Blockchain. As stated in their website ‘’The Tangle ledger is able to settle transactions with zero fees so devices can trade exact amounts of resources on-demand, as well as store data from sensors and data loggers securely and verified on the ledger.’’
Three key benefits of using blockchain for IoT
Building Trust, Cost Reduction and Accelerate transactions are the three key benefits IBM is emphasising on, that we get from a blockchain and IoT convergence. The image below taken from the IBM report summarises these key benefits.
Ultimately it will be the combination of artificial intelligence, IoT and blockchain that will prove most interesting across industries and in myriad possible IoT applications, IBM states.
Three main challenges for the future to solve
Forrester analyst and co-author of ‘Disentangle Hype From Reality: Blockchain's Potential For IoT Solutions’ states that it’s time to start looking at that IoT and blockchain convergence, even if the combination of both might not be for today. She outlines the three main challenges for IoT and Blockchain participants as follows:
Technology is going to play big part in securing an IoT ecosystem and blockchain is seen as a way to do exactly that. Blockchain is, in and of itself, is a network protocol that focuses on security and decentralisation.
Operational challenges: the business model and the practical aspects as this requires many agreements and of course many actors too in a broad ecosystem.
Legal and compliance issues in case of actions that are taken by devices, based on a rule that is automatically executed by a blockchain-based application, triggered by another blockchain-based application (you see the complexity). And then there is the mentioned example of smart contracts. As you know contracts are far from easy, even outside this IoT and blockchain context. More info on Martha’s post.
As we move into a highly automated future it is easy to see the complexity and challenges that need to be overcome. How much of these will become a reality only time will tell. What do you think about such a highly automated future and what are the implications to human nature and everyday life? Let us know in the comment section below!