How Blockchain Technology Can Benefit the Internet of Things
Blockchain technology has already gone through a peak of hype, then a “trough of disillusionment,” but it may be on an upward climb again.
While the roller-coaster ride of cryptocurrencies such as bitcoin have also cast aspersions on blockchain technology –and it has—recent events such as COVID-19 and its impact on the connected economy has created new imperatives for digitizing transactions .
Enter blockchain, a digital ledger technology that enables organizations to transact digitally, recording these transactions securely, immutably across several computers that are linked in a peer-to-peer network.
Indeed, recent events such as the advent of COVID-19 brought blockchain to the forefront, as social distancing and reduced labor forces on-site accelerated digital trends.
How Blockchain Technology Works
The three fundamental properties of blockchain technology as a data structure ( i.e., distribution, immutability and decentralization, can benefit the Internet of Things (IoT), said Arthur Carvahlo, a blockchain expert and the Dinesh and Ila Paliwal Innovation Chair at the Farmer School of Business at Miami University.
Carvahlo illustrated these properties and how they can benefit the Internet of Things (IoT) ecosystem by considering surveillance cameras as IoT devices.
Say a burglar is planning a sophisticated act on a high-profile target. To prevent the act from being recorded, the burglar can first attack the server running the database where the videos are stored, he said.
The distributed aspect of blockchain means that data are replicated across several computers. This fact makes the hacking more challenging since there are now several target devices.
The redundancy in storage brought by blockchain technology brings extra security and enhances data access since users in IoT ecosystems can submit to and retrieve their data from different devices, Carvahlo said.