Merging IoT with Blockchain technology opens new ways to build business solutions without spending much on centralized IT infrastructure.
Have you used a smart microwave that cooks your meal for just the right length of time? Or heard of smart basketball that collects data about your throws that your trainer can later examine to create a personal training plan for you?
Many of us may even know about the smart mirrors that display all kinds of information like date, weather, temperature, etc. At least smart watches and fitness bands are something we all are familiar with.
Today, almost every device comes with sensors that collect and transmit data to the cloud. Internet of Things (IoT) is not only changing the way we work, but also the way we live. IoT solutions are seeing increased adoption in almost every industry, be it healthcare, manufacturing, warehousing, transportation or others. Businesses are taking every opportunity to drive smart operations with IoT.
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But what if I tell you that these smart IoT devices-based solutions are not so ‘Smart’?
As the IoT devices and cloud-based IoT solutions are growing, we have seen several problems such as handling large amounts of data generated through various devices and the associated security risks.
So, what’s the solution?
One solution is to pair IoT with Blockchain to build reliable business solutions. Here is how Blockchain technology can resolve issues related to IoT.
Why pair IoT with Blockchains?
# Tracking data more securly
IoT enabled devices are generally small, with less memory and low processing power that makes them less secure for the data they track. These smart devices collect all kinds of data like the fitness data, financial records and other personal information that can be easily hacked. Let’s say you have a smartwatch that stores your fitness data over the cloud and someone gets access to all your fitness data. What is someone who gets access to your financial data? Scary, isn’t it?
IoT devices need better security, which is possible we integrate it with Blockchain technology. As Blockchains use a distributed ledger of transactions, it stores the transactions in multiple servers that are participating, and not on a single server. With the distributed architecture of Blockchains, it resolves most of the problems related to security in IoT devices.
# Enhanced transparency with transaction history
While conducting business transactions, you may need to restrict access to the data of your IoT device. You may need to give access to your IoT data to certain business parties with certain permissions to a few members only.
Integrating IoT devices with blockchain makes this possible with the use of distributed ledger and a security mechanism based on consensus. The distributed ledger connects the parties and provides everyone access to an irreversible list of transactions along with history. This helps improve transparency and trust between the parties.
# Improved security with decentralization
Most data collected with IoT devices is stored at centralized databases with a potential problem of a single point of failure. A crash of the database can cripple the complete system. Moreover, the security breach of such data is also very probable. As more and more IoT devices are being used, data management and security related to IoT devices are becoming a major problem.
Blockchains have nodes (computers or connected devices) that share data keeping them up to date. The blockchain data is stored, spread and preserved on nodes mitigating the risk of a single point of failure.
# Automating transactions through Smart Contracts
It’s possible to automate certain transactions or services through IoT devices as most IoT devices are capable of conducting automated transactions. For example, if a light bulb fuses at your smart home, it can place an automated order for a new one.
Integration with Blockchain makes these automated transactions more efficient because of the use of Smart Contracts. Smart Contracts are codes on the blockchain with pre-set rules. The contracts get activated once the rules are satisfied. With the use of Smart Contracts, you can make your transactions more efficient, precise and transparent.
# Scalability for large-scale operations
Traditional centralized IoT solutions are not scalable for large-scale operations. As the number of IoT devices is growing, the cloud-based centralized IoT systems cannot handle the authentication, connection, and exchange of information at such a large scale.
The decentralized nature of Blockchain with peer-to-peer distributed ledger ensures scalability.
Blockchain technology allows distributing the processing power wherever it is needed. Blockchain’s distributed ledger technology, encryption, and multi-step verification provide an answer to the security threat faced by IoT. Therefore, IOT with blockchain is presenting many opportunities before businesses.
IoT Solutions with IBM Cloud
With a vast network of smart devices, IoT enables to create new services based on cloud-enabled connected physical devices. IBM cloud supports many IoT solutions. The IBM cloud-supported IoT solutions have three main tiers:
# Devices/ Gateway
Includes all the internet-connected smart devices and sensors that gather data from the environment and securely transmit that data so it can be analyzed and processed. Based on the data and analysis, actions are taken.
# IBM Watson IOT Platform
The next tier of IBM cloud-based IoT solution is the IBM Watson IoT platform that takes data from the IoT devices and provides data analysis along with a wide range of cognitive services. These services can be used to process the raw, unstructured data collected by various sensors of IoT devices. Some such services provided by the IBM Watson IOT platform are Machine learning, Machine reasoning, Natural language processing, and Image analysis.
# IBM Cloud
The next tier of IBM cloud-based IOT solution is IBM Cloud. IBM Cloud is an open standards-based cloud platform. We can use it for developing, executing, and managing applications and services.
IBM cloud supports IoT applications and enhances the analytical and cognitive capabilities in the applications. It uses several runtimes and services for this purpose.
IBM Blockchain-Enabled IoT Solutions
By leveraging Blockchain distributed ledgers for your IoT devices, you can greatly improve the security of your data. You also get scalable IoT solutions.
IBM provides a Blockchain Platform which is a flexible software-as-a-service offering that is delivered via the IBM Cloud. It’s a managed, full-stack blockchain-as-a-service (BaaS) enabling you to deploy blockchain components in your preferred environment. The IBM blockchain offering helps you build, operate, and grow your blockchain networks during development through production.
With IBM’s Watson IoT Platform, the groups of participating parties can use information from IoT devices. It can couple this with smart contracts running on the IBM Blockchain networks.
Does your business involve agreements among a bunch of parties? Do you need to share valuable information with multiple parties? If yes, then Blockchain with IoT data opens up new ways of automating your business processes without the need to set up expensive centralized IT infrastructure.
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How IoT With IBM Blockchain Can Help You Build Reliable Business Solutions! was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.