6 Benefits of Blockchain and IoT for Market Growth
Blockchain-IoT is a combination of IoT and blockchain technology. The rapid advancement of technology and the development of communication networks has made it a popular choice. The blockchain is powered by cryptographic encryption, decentralized networks and a peer to peer network. This allows transparency and security.August 07, 2022 10:46
Blockchain technology was developed due to the increasing number of IoT devices that are vulnerable to cybercrimes. Blockchain IoT offers many benefits, including faster data changes, lower costs, improved privacy, efficient logistics, supply chain and insurance. The Internet of Things (IoT), connects people, places, and products. It creates and captures value. Analytics capabilities of the IoT make use of these data points in order to transform insights into actions. This impacts the business process and results in new ways of working.
Combining IoT and Blockchain to Create a Powerful Combination
According to ISG, Blockchain technology is a distributed ledger technology that makes machine-to-machine transaction possible when it's combined with IoT. Blockchain is a distributed ledger technology that stores transactions in multiple databases. These transactions are then verified by multiple sources before being entered into the shared ledger and distributed to all nodes. The combination of IoT with blockchain allows smart devices to operate independently from a central authority. This brings many benefits. It can monitor how devices communicate with one another.
Although blockchain technology's decentralization features are an advantage, they could cause problems for IoT as these platforms are built on a hub and spoke or client-server architecture with a central authority. A decentralized IoT platform can ensure it is compatible with the blockchain networks. However, it may not be possible to set up IoT sensors that manage their own data storage or computing. They rely on central computing for storage resources.
In the coming years, IoT and Blockchain will propel the market
Businesses can use both IoT and blockchain together, even though they are strong in their own right. Aftrex Market research in 2018 found that the global Blockchain and IoT market could reach $254.31 billion by 2026. Here are five benefits of IoT/blockchain technology that will help the market grow in the coming years.
Blockchain to Accelerated Data Change
According to Aftrex Market research, the main benefit of IoT and Blockchain is faster data changes. According to reports, blockchain's current implementation has some drawbacks. It limits the number transactions per second. A permission-based, business-grade blockchain is needed to manage the volume of data, devices that are part the IoT and speed up transactions between two parties.
Blockchains that use trusted nodes to validate transactions are crucial in order to meet the IoT's performance demands and manage IoT’s fast information exchange.
Blockchain technology improves security
Blockchain's main advantage is security. It can validate information and verify that it comes from reliable sources. This feature is particularly useful due to the number of devices in the IoT. Combining IoT with technology can help to strengthen privacy agreements as well as improve communication security.
This trusted ledger is not just for devices. It's also human to human, devices to people, and humans to devices. This trusted ledger shows who has access to the account and who is making transactions. An important advantage is the ability to keep a log of all transactions. An amalgamation of IoT and blockchains is used by many enterprises. However, this is just the tip of the Iceberg.
More efficient supply chain
Many businesses want to improve the efficiency of their supply chains. This is difficult because of many problems in the global economy. The efficiency and speed of supply chains can be improved by removing the intermediary blockchain and IoT. This will allow for faster transactions and lower costs. The blockchain acts as a validator and non-trusted parties can access data directly. This eliminates the costs associated with each hop.
Blockchainn offers potential for growth
Due to technical and operational problems, IoT-based Blockchain technology is not widely used. With a large central ledger, blockchain systems can have problems in storage and scalability. Storing the ledger on edger devices is inefficient as smart devices at the edges are not capable of processing large amounts of computing power, or storing large quantities of data.
While IoT-blockchain technology is still in its infancy it will become a significant factor in the coming years. Implementing security guidelines and standards will encourage IoT-blockchain technology. Blockchain could also provide greater security for the internet by allowing peer-to-peer communication and transparency of data.
Companies love the ability to reduce operational costs. This is perhaps the most important benefit. Blockchain allows data to be sent peer-to-peer, without any centralization of control. This reduces business costs. It is not cheap to build a reliable, centralized infrastructure. It is possible to reduce the number of sources of failure by decentralizing and to address the IoT's size.
Blockchain and IoT can immediately benefit accounting, which is one of the most important departments in an organization. First, companies need to understand how they share/exchange data/money in a linear, time-stamped, chain.
How Blockchain Accelerates the Potential of IoT
Blockchain is an amazing technology that can speed up IoT's effectiveness. IoT's main problem is security, which has prevented widespread adoption. IoT devices can be vulnerable to Distributed Denial of Service attacks due to security flaws. These are the major concerns for blockchain-related IoT devices.
The blockchain system uses a distributed ledger that is protected against tampering. It eliminates the need for trust between parties and provides security to platforms or devices, improving user experience and reducing work.
The integration of IoT networks and blockchain networks will allow gadgets to exchange information without the need to use multiple servers. It will also ensure that no one node in the network is affected by a failure, which could lead to the shut down of the entire network.
Strong Level of Encryption
Blockchain will be used to store IoT data. Hackers can change any block of the chain to gain access to the network. Blockchain offers an additional level of security. It is therefore difficult to alter existing data records, and even more difficult.
Decentralization of Networks
The Decentralized approach will allow the internet of things to solve many of these problems. Peer-to-peer communication models can be used to manage billions of transactions among devices. This will also reduce the cost of maintaining and establishing a large central data center.
Trust and Assurance
Blockchain could be used to reduce costs by creating trust between parties. This eliminates the processing costs associated with IoT gateways (e.g. traditional protocols, hardware or communications overhead costs).
The Key Takeaway
A Twitter survey conducted in August 2018 found that 57% of participants said they would not use blockchain technology. Only 12% of survey participants have used distributed ledger tech.
According to Leone's analysis, Blockchain and IoT could make an incredible combination. However, it is still a while before this new business tool becomes commonplace in enterprise tech. It is therefore a good idea to start planning now.