Blockchain is a shared distributed database for peer-to-peer transactions. At the core of this technology is Bitcoin – a digitally encrypted wallet to control the transaction and payment system that was introduced in 2009. This transaction management system is decentralized and generally runs without any intermediary. These transactions are supported by a set of network nodes and documented in a shared ledger known as the blockchain.
The Internet of Things (IoT) is a cyber-physical network of interconnected computing devices, digital objects, and individuals with unique system IDs. The goal of the IoT space is to serve a single point of integration and transfer data online without the need for human or computer intervention.
There is a complex relationship between blockchain and the Internet of Things. Business entities providing the Internet of Things can find solutions using blockchain technology. A common system can develop and record a cryptographically secure data set. Such database and records are protected against alteration and theft provided they are highly secured and protected against malware. The duo can build transparency and accountability while moderating business development mechanisms. Blockchain itself can help reduce workplace mismanagement, overhead and business unpredictability through its interconnected servers. A digital ledger can develop a cost-effective business and management system where anything can be efficiently exchanged, properly monitored and tracked. This process eliminates the need for a central control system, essentially removing much of the bureaucratic red tape and streamlining business processes. The commercial adoption of this innovation offers an immersive platform in IoT and business enterprises.
Blockchain essentially allows connected IoT devices to participate in secure data exchanges. Companies and business entities can use blockchain to manage and process data from edge devices such as RFID (Radio-Frequency Identification) based assets, machine-readable barcodes and QR codes, infrared bluster (IR Bluster) or device information. If IoT devices are integrated into enterprise settings, they will be able to transmit blockchain-based records to update contracts or verify the communication network. For example, if an IoT-enabled asset and an RFID-tagged asset with sensitive geographic location and confidential information move to another unspecified point, the information will be automatically stored and updated in the blockchain ledger, and the necessary actions will be taken if the system is assigned. As the product moves to different locations, the system allows stakeholders to get information about where the package is.
In order to enjoy the fruits of blockchain-enabled IoT, business organizations must adhere to four fundamental principles:
1. Cost reduction
Edge devices need to reduce operation processing time and eliminate IoT gateways or internet intermediaries within the system. As data sharing and information is communicated within the system, eliminating an additional protocol, program, hardware, channel, node or communication reduces overhead.
2. Acceleration of data exchange
Blockchain-enabled IoT can eliminate an IoT gateway or any filtering device needed to create a network between the cloud, administrator, sensors, and devices. Cutting out such a "middleman" can enable peer-to-peer contracts and data sharing. In the process, the digital ledger eliminates the additional time needed to synchronize devices and process and collect information. However, removing the IoT gateway provides channels for malicious malware and security breaches. A blockchain-enabled IoT network can solve this by installing features such as malware detection and encryption engines.
3. Building trust
Through the blockchain-enabled IoT space, devices and equipment can virtually and physically trade and communicate as trusted parties. Unlike conventional business, where transactions require approval and verification, blockchain does not need any central verification or peer-to-peer recommendations. As long as the network is secure and the trusted parties are technologically savvy, the IoT space does not require additional documents. For example, Team A may not know Team B, meet physically, or demonstrably distrust each other, but a stamped record of online transactions and information sharing in the blockchain ledger confirms the trustworthiness of the firm. This allows individuals, organizations and facilities to gain mutual trust, which is essential to create a revolving business setup and eliminate administrative clutter.
4. Strengthening security for IoT
Blockchain provides space for a decentralized network and technology that promises to store, process and retrieve information from billions of connected devices. This system must provide a highly secure network that is encrypted and easy to use. A decentralized network must provide high throughput, authorization, low latency and polling. Installing blockchain in an IoT network can regulate and moderate data exchange through edge devices while maintaining the same secure transaction and information exchange of connected devices.
Eliminating points of failure in the IoT space
Blockchain-enabled IoT can upgrade the supply chain network by tracking tagged items as they move to different locations in an import store or warehouse, while authorizing secure and accurate product delivery. Blockchain installation provides accurate and detailed product confirmation and solid traceability of relevant data in supply chains. Instead of searching for paper trails to identify the country of origin (COO), the IoT can verify the physical confirmation of each product through a virtual "visa" that provides relevant information such as the product's authenticity and origin. Blockchain can also create auditable records of products and help organizations trace back or create a history of records. It can also provide secure access to the data network for administrative records or alternative plans.
Blockchain-enabled IoT is not limited to enterprise glitches or use cases. Any business entity in the IoT space can increase business productivity by marginalizing costs, removing bottlenecks, redundant cycles and single points of failure in the system by updating processes. It is in the self-interest of such organizations to understand, embrace and implement blockchain into their business solutions.
More to come...
It is the disruption that welcomes the “second machine age” of digitization and advanced artificial intelligence (AI). Business organizations are the pioneers who can enjoy the fruits of this revolution. It will be unfortunate if these organizations fail to realize the business potential they face
Blockchain-enabled IoT, ushered in by the Fourth Industrial Revolution (4IR), is now the most dominant innovation after the integration of transistors and computer systems.
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