This article will help you understand the blockchain technology, its popularity, and uses in different fields as well as the way it improves the security of the Internet of Things or IoT technology.
The blockchain is a technology that is developed to maintain the tamperproof record of data and its transactions on the decentralized and distributed network. Let’s have a deeper dive into the concept of the technology to find out. How does blockchain work?
The blockchain technology is a chain of highly encrypted data blocks, which cannot be tempered due to the presence of the hash code of the previous block. The hash value of every previous block is properly linked with the new data block to generate the hash code of the new block. Thus, any retrospective changes will be impossible due to the powerful authentication based on verification of the hash code.
The first real-world use of blockchain technology came into existence in 2009 when the Bitcoin cryptocurrency was launched. The Bitcoin is fully based on the blockchain technology, which uses the powerful encryption of the block data. After Bitcoin, many other cryptocurrencies, smart contracts, and other financial transactions used this technology for managing the public ledger of information.
According to the Apium Hub Research report, there is a huge potential for saving money in the range of $8 to $10 billion in the banking sector by using the power of blockchain technology. The Transparency Market Research Company predicts the total global market value of blockchain technology to cross the $20 billion mark by 2024.
The blockchain technology is anticipated to have a very prospective future in numerous governmental, social and industrial sectors. For instance, authenticated voting, digital medical records, banking, real estate data, decentralized internet and distributed cloud storage are a few examples of the future use of blockchain technology. The use of blockchain technology to resolve the IoT security issues is another important domain, which can revolutionize the automation industry globally.
How Blockchain Technology Improves IoT Security?
According to the STATA forecast, the total market value of the internet of things (IoT) will cross the $1.7 trillion by 2019 with a whopping 20.35 billion number of connected devices across the globe. In such a huge market, the industry concerns are also very high.
According to the Developer Survey 2017, the top concern of the internet of things (IoT) industry – with a staggering ratio of 46.7% of the respondents – is the IoT security. The other two major concerned include interoperability and connectivity. The same survey also reveals that the communication and data encryption through blockchain security is considered as the top two choices for resolving the IoT security concerns, according to the majority of the participants of the survey. The communication encryption is the second solution for the IoT security as per information of the survey.
Let’s have a deeper insight into how the security of IoT devices and platforms can be improved by using the blockchain technology.
1 # No Single Point Failure
The single point of failure is one of the major security problems, which can bring the entire IoT system to halt as it happened with more than 100 thousand compromised Mirai Bonet devices in 2016. The blockchain technology is a distributed and decentralized technology, which is not affected by the single point of failure in a network. Any compromised devices can easily be found and kicked out of the network to keep the remaining system working smoothly. The blockchain IoT network data is fully distributed within the multiple nodes, which make it one of the most resilient systems.
2 # Highly Encrypted Network Transactions
The blockchain transactions are considered as the most secure, and encrypted transactions based on the powerful data encryption through hashing tags. So, there is a great scope of this technology in securing the data of IoT network transaction over a secure API across the internet. Using the blockchain technology can make the communication transactions of IoT networks highly encrypted and secured, which cannot be hacked by the malicious attackers. So, the use of blockchain can improve the IoT network security substantially.
3 # Node Status Tracking Capabilities
“The blockchain technology can be a powerful player in the IoT security by keeping the ledger, which can help you not trail the devices, but also the way those nodes transact with each other and which state they are,” says Dan Bieler, an analyst at Forrester. By using the powerful capability of blockchain technology to track the node status can be very useful in preempting any attempt to break into the IoT security by the malicious intruders. This feature of the blockchain technology can be used extensively in securing the IoT networks.
4 # Immutable Technology
Blockchain technology is a tamper-free technology, which cannot be compromised or corrupted due to the use of strong encryption and the inclusion of the hash code of the previous block. For any transaction on the blockchain technology, you need to have a consensus of the nodes of the network. The blockchain technology uses unique digital ID for every node that is almost impossible to imitate by any malicious user. So, the blockchain technology can prove to be a key technology in the domain of IoT security.
How Is Blockchain Technology Used in Different Industries?
The blockchain technology was initially developed for the cryptocurrency, but it was soon realized by many industries to benefit from its great features related to the security and robustness. The blockchain technology can be used in many industries and government sectors. According to the Financial Times article, the blockchain technology can save more than $20 billion the middleman cost.
The other ways to implement the blockchain technology in different sectors and industries include:
- Casting, counting, and tracking of online votes
- Decentralized payment systems in insurance, hedge funding, general finance, and banking systems
- Developing security systems of critical infrastructure and physical access systems
- Education credit hour verification systems to make it foolproof
- Industrial automation based on the combination of artificial intelligence and blockchain technology
- Development of token-based cloud storage solutions in the field of cloud computing
- Software tools for the forecast of accurate demands based on the previous data analysis and trends
- Robust stock trading solutions for secure and authenticated transactions
- Real estate management system to record and trace the property transfer transactions
- And many others
The final takeaway from this article includes:
- Technical introduction and background of blockchain technology
- The popularity of blockchain technology in the modern business ecosystems
- Four major capabilities of the blockchain technology that can help on how to improve the IoT security
- The different ways in which the industries and governments are using the blockchain technology in their systems
- The future prospects of the blockchain technology