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Five Reasons Why Blockchain Will Power IoT Technologies

Five Reasons Why Blockchain Will Power IoT Technologies

By Knud Kegel, Vice President of Product, EMnify.

Blockchain is nothing new. Originally proposed in 1982, and finally exploited in 2008 as the technology behind Bitcoin, blockchain acts as a publicly distributed immutable ledger. Each block cannot be modified and cannot be deleted. It is secure, decentralized and tamper-proof.

These attributes have immense value for IoT infrastructures and pave the way for a more transparent future. Blockchain technologies can be used to support IoT deployments by improving decentralization, strengthening security, and providing greater visibility to connected devices.

In an accelerating digital world, here are five key ways IoT and blockchain can work together to improve business outcomes.

1. Data authenticity for quality assurance

Thanks to its immutability, blockchain can add a robust framework to quality assurance processes. When an organization combines IoT and blockchain technologies, it can quickly and accurately detect any instances of data or asset tampering.

For example, a cold chain monitoring system could use blockchain to record, monitor, and distribute IoT data showing where a temperature spike occurred and which party was responsible for it. Blockchain technology could even trigger alerts to notify both parties when the temperature of a shipment exceeds a specified threshold.

And if someone tries to challenge the credibility of the data collected by an IoT device, the blockchain holds the proof of any tampering or anomalies.

2. Device tracking for error capture

IoT networks can be huge. A deployment can easily consist of thousands or even hundreds of thousands of endpoints. It’s just the connected nature of modern businesses. But when you have such a mass of IoT devices, errors and inconsistencies can seem like random events. Failure patterns can be difficult to detect, even if a single device is experiencing issues multiple times.

But blockchain technology makes it possible to assign a unique key to each IoT endpoint, sending encrypted challenge and response messages. Over time, these unique keys create device profiles. They help identify inconsistencies, confirming whether an error is an isolated event or a recurring defect that requires attention.

3. Smart contracts for faster automation

IoT technologies enable automation. This is one of their fundamental advantages. But when a terminal detects something that requires manual intervention, everything stops. And that could be very damaging to an organization.

Maybe a hydraulic hose fails, contaminating a production line and stopping production. Or maybe IoT sensors are indicating that your perishables have gone bad or suffered damage from freezing in transit.

With smart contracts, the blockchain can be used to authorize responses through the IoT network. For example, a factory could use predictive maintenance, monitor that hydraulic hose, and trigger a spare before it fails. Or if perishable goods have deteriorated in transit, a smart contract can automate the replacement process to reduce delays and protect customer relationships.

4. Decentralization for enhanced security

There is no denying that IoT devices can be hacked. Especially if you use Wi-Fi instead of the cellular connectivity methods provided by EMnify. With cellular connectivity, you are completely separate from any local area network, which means there is no interaction with unsecured devices nearby.

Yet, certain aspects of blockchain can add an extra layer of security, regardless of the connectivity methods you use. Because the blockchain is decentralized, malicious third parties cannot simply hack into a single server and corrupt your data. In addition, any attempt to access the data and make changes is documented, immutably. And just because someone has physical access to a device, with blockchain, doesn’t mean they have access to any of its data or functionality.

5. Usage Records for Employee Performance

Blockchain can also go beyond IoT sensor technology and track user actions as well. This can allow businesses to see who, when and how using the device.

Just as a device’s history provides insight into its reliability, a user’s history can be used to gauge its reliability and performance levels. This can help companies reward employees for good work, analyze patterns and decision-making processes, and improve the quality of results.

A collaborative future

These are just some of the ways in which IoT and blockchain can be used collaboratively to solve trade challenges. As technology accelerates, IoT blockchain is an exciting and emerging area of ​​growth, which will influence the future of many industries over the next few years.

About the Author: Knud Kegel is Vice President of Product at EMnify, the global IoT cellular communication platform provider. He leads EMnify’s product teams to transform IoT connectivity into an easy-to-consume cloud resource. Prior to EMnify, Knud was SVP Marketing and Business Development at CoreMedia, a provider of experience management software for global brands. Knud has over 10 years of executive leadership experience in the B2B SaaS industry.

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