Tech buzzwords come and go faster than we have time to fully comprehend what they mean. ‘Blockchain’ and ‘IoT’ have quickly become a couple of 2018’s hottest buzzwords — and they’ll probably sticking around for a while.
The term “the Internet of Things (IoT)” was coined by Kevin Ashton, the Executive Director of Auto-ID Labs at MIT, during his presentation for Procter and Gamble in 1999. Since then, it has grown rapidly. It’s poised to be one of fastest growing markets within the next few years.
Corporations including Hitachi, Huawei, and Rolls Royce are spending billions of dollars to develop proof of concept IoT ecosystems in an attempt to revolutionize the technological landscape by making IoT mainstream.
Meanwhile, as popular news agencies squabble over whether or not Bitcoin is a bubble, what is possibly one of the most pivotal technological breakthroughs of our time is quietly unfolding in front of us: the blockchain.
And the most exciting part about blockchain technology has absolutely nothing to do with Bitcoin or cryptocurrency investments.
In a few years, Bitcoin might well be a thing of the past — but we’ll almost certainly still be talking about blockchain.
The Biggest Issue With IoT Today…
IoT technology is already being used extensively worldwide. Just look at smart thermostats that learn your routines and adjust the temperature based on whether or not you’re at home, whether you’re asleep, and whether your house is hot or cold.
There’s even a smart pet feeder that helps you figure out the best type of food for your pet, how much they should be eating, monitors their food consumption, and helps you coordinate delivery times for when you’re about to run out of stock.
Yet as it stands, the true potential of IoT remains largely untapped. Right now, the lack of security is by far one of the most prominent issues holding the IoT industry back.
There are so many security loopholes that actually implementing many of the concepts that IoT has been designed for would be infeasible, and in many cases even dangerous.
Should a hacker manage to gain control of your platform, they would have full control of the entire ecosystem of devices in connection with it.
So far, hackers have managed to take control of implanted cardiac devices, control webcams, and even hijack people’s vehicles.
We still have a long way to go before IoT becomes mainstream.
Could Blockchain Technology Solve These Issues?
The blockchain is a decentralized, incorruptible digital ledger system that enables peer-to-peer interaction.
It’s best known for being the technology that powers Bitcoin and Ethereum — but its uses extend far beyond cryptocurrencies.
A few incredible examples of how the blockchain has been used to improve people’s lives include:
- Tackling the refugee crisis.
- Creating alternative financial avenues for some of the world’s most disadvantaged who do not have access to a bank account.
- Preventing voter fraud.
Just like IoT, blockchain is just getting started. However, combining these industries could provide significant benefits to both.
For blockchain, IoT will introduce the technology to a wider audience. For IoT, blockchain will offer a number of benefits, including:
- Increased Security. The blockchain enables the implementation of smart contracts. This can ensure that only certain people will have access to important information if specific requirements are met.
- Increased Reliability. The blockchain is a distributed ledger. This means an outage in one area won’t have a damaging effect on overall performance. For the IoT to become successful and widely adopted, this feature is an absolute necessity.
- Increased Speed. This is enabled by the replacement of ‘middle men’ with the implementation of smart contracts that are carried out automatically when specific conditions are fulfilled.
- Reduced Cost. Because blockchain removes the ‘middle man’ from the process, transactions can be carried out on a peer-to-peer basis, removing the majority of third-party fees.
IoT is one of the biggest innovations of our lifetime. It holds massive potential to revolutionize the way we live. It goes without saying that the company that manages to solve these issues and develop a secure and functional platform has hit the jackpot.
Upcoming Projects That Are Aiming to Merge Blockchain With IoT
There are many upcoming blockchain projects that are likely to have a big impact on the IoT industry in the future.
Some of the main ones that you might have heard of include:
IOTA was initially inspired by blockchain technology. However, it has since branched out and developed its own concept using a system called ‘Tangle’.
Tangle goes beyond blockchain. It makes network validation an intrinsic part of the network through a Directed Acyclic Graph architecture. It has higher processing power than blockchain, and can, therefore, process transactions at a significantly higher rate.
The platform does not use the concept of ‘miners’. Instead, each user is an equal validator.
Due to its asynchronicity and low overhead requirements, it is particularly suited to IoT.
WaltonChain is a blockchain platform operating in China and Korea. The primary aim of this project is to combine RFID together with blockchain technology to help manage supply chains.
The technology essentially decentralizes the entire supply chain by making information about the product’s history public. This will increase security, reduce labor costs, and reduce counterfeiting.
Streamr uses the concept of data tokenization to allow users to buy and sell IoT data in real-time.
These projects both give an excellent overview of some of the potential applications of the blockchain beyond simply being used as a currency.
Blockchain Could Be the Missing Link the IoT Industry Has Been Waiting For
We’re still in the early stages of blockchain development and the wide-scale acceptance of IoT.
As it stands, blockchain has the potential to unlock both the business and the operational value of IoT.
It’s still early days, and developers are still trying to iron out many of the kinks. However, it’s becoming increasingly clear that we have now reached the point where we can be certain that both of these technologies are here to stay, and that they will almost certainly have a significant impact on our lives in the future.