Last updated on September 14th, 2025 at 06:57 pm
Every now and then, new developments are introduced. Three major technological advancements have found a way to interact with one another. The line that demarcates the functions of Blockchain, AI, and IoT seems to be blurring daily.
Blockchain technology is the technology that hosts cryptocurrencies, NFTs, Decentralized Finance platforms, and much more. It is peculiar because it offers transparency and a distributed means of storing immutable data. Blockchain has grown from merely storing cryptocurrencies to doing much more.
Artificial Intelligence (AI) is clearly a scenario where human intelligence activities are done by a robot or computer. It is the ability for machines to carry out human activities easily.
IoT- Internet of Things– is a system that is filled with devices all over the globe interacting with one another via a form of connectivity. As they interact, the data collected are sent to the cloud to be processed, and then an action is performed without the need for human intervention.
What Is The Technology Behind Blockchain?
Blockchain is a distributed ledger that stores data on different nodes scattered all over the globe, thereby preventing a single point of failure. Since it is stored on different nodes, one or two faulty nodes won’t corrupt the data stored. It is different from centralized storage systems.
This technology offers immutability, meaning that the data stored on the chain can’t be altered by anyone, making it a good source of data. A typical public blockchain is transparent, allowing people to see the transaction records of an address.
Before a node can be run in a blockchain, especially a Proof of Work blockchain, massive computing power is consumed. In a Proof of Work chain, a miner is crucial because they validate the transactions and place them in blocks. Every block stores an amount of data, which may include the history of transactions. Once a block is filled with the stipulated amount of data, a new block is created.
In Proof of Work chains, a complex mathematical puzzle is presented, and the first miners to solve it are allowed to validate transactions and create new blocks. The mathematical questions tend to become more complex daily as the mining process increases.
For Proof of Stake chains, validators are in charge of verifying transactions. Miners are not needed here, and the amount of computing power consumed is not as much as what is obtainable in PoW blockchains. In this scenario, holders of the underlying token offer their tokens to validators to improve the security of the platform. In return, both the validators and stakers are rewarded with new tokens.
To secure the data stored on a block, every block in a chain has a cryptographic hash. It prevents intruders from gaining access to the data because it requests a private key.
What Problems Can Blockchain Solve?
With the emergence of blockchain, some issues have been nipped in the bud. The functionalities that this technology offers can positively impact many industries.
Making global payments can be a Herculean task if a traditional form of payment is used. There are bottlenecks in place to reduce the efficiency of cross-border payments. People have to jump through hoops and red tapes before they can send money to someone that lives in another country. Sending money across the border can be expensive.
With blockchain technology, this is changing. Users can send funds through cryptocurrency, and it will reach its final destination in minutes or even seconds. Transactions are fast and immutable. Some cryptocurrencies do not charge transaction fees. A typical example is Nano. Nano is a fast and free cryptocurrency.
Companies are always looking for innovative supply management platforms to ensure that the processes that lead from the creation of their product to the delivery at their client’s doorstep are efficient.
Since the supply chain involves multiple people, there are issues of fraud, inefficiency, conflict, high cost, and much more. Blockchain technology is altering this process by adding transparency, and interoperability into it.
It is easy for everyone in the supply chain to have access to reliable data to ensure that the products are tracked in real-time. Vechain is currently revolutionizing this space.
- Agreements
Trust is a big issue in the traditional world, and that is why contracts are signed. Time, money, and effort are consumed by trying to sign an agreement and enforce it. People and brands are cravings more efficient ways of reaching and enforcing agreements.
Blockchain makes this possible, without the need for middlemen, thereby cutting out inefficiency, high costs, and the possibility of human error. With smart contracts technology in a blockchain, it is easy for different parties to reach an agreement without having to pay for a lawyer. Since smart contracts are lines of code that can’t be altered, the tenets that are embedded into them will be executed. Ethereum blockchain offers smart contracts.
Piracy is a big issue in the digital world, movies, games, books, songs, and other digital products are copied illegally and uploaded on an illicit website. Rather than purchasing the digital product from a legitimate platform, some download it illegally, thereby reducing the chances of the owners to earn from it.
Blockchain, through NFTs, seems to be altering this trend. More creators are tokenizing their digital products and selling them as NFTs, thereby reducing the possibility of forgery. With the technology, creators can enjoy the perks that come with using an immutable ledger. An example of a platform that makes this possible is Mozik.
Limitations of Blockchain
Though blockchain technology is revolutionizing different industries, it still has some issues that keep restricting its application and massive adoption.
It doesn’t matter how innovative a platform is, if it is not fast, this could discourage some people from using it. This is one of the issues noticed in blockchain, especially the first and second generations of the technology- Bitcoin and Ethereum respectively.
One reason some chains are having scalability issues is that the number of users on their platforms is massive. As more people start to use the chain, it becomes slower. The scalability issue on Ethereum has been linked to its high transaction cost. To solve this issue, more innovative platforms like Polygon, Cardano and Solana are coming onto the scene. Ethereum is currently working on releasing a better version of itself in ETH 2.0, which has not been launched at the time of writing this.
- Energy Consumption
Calls have increased daily for PoW chains to migrate to more eco-friendly blockchains like PoS. Proof of Work chains needs massive computing energy to validate transactions and build blocks. Miners use top-notch mining farms that consume high levels of electricity to solve complex mathematical puzzles. Bitcoin and Ethereum, at the moment, use the Proof of Work consensus mechanism.
Proof of Stake chains, on the other hand, do not need a high level of energy. When ETH2.0 is released, Ethereum will move from PoW to PoS.
- Security Issue
Though blockchain technology is secure, there are risks of security breaches. For instance, platforms on the blockchain, especially some Decentralized Finance platforms have been hacked. A common type of this hack is the smart contract hack.
In March 2021, an innovative blockchain, Nano, was faced with spamming issues, which threatened its operations. The attack could be likened to a DDoS attack, where the nodes were bombarded with a spam attack. An attacker sent near-zero value transactions to clog the system to disrupt the operation. Developers were able to resolve the issue after weeks.
- Needed Expertise and Cost
Before a blockchain can be created or managed, experts need to be hired. Experts are needed through every step of the process. Finding a blockchain expert is not an easy task because the demand outweighs the supply. If a business decides to incorporate this technology into its system, it has to retrain its existing staff, which may not be an easy feat. The cost of setting up and implementing a blockchain is expensive and could leave one groaning in debts.
How Can One Implement IoT With Blockchain?
Both blockchain and IoT can complement each other because of their intricate functionalities. In an IoT network, it is difficult to find out where a leak occurred, making it easy for intruders to make away with unauthorized data. Blockchain technology has a history of transactions and the on-chain identities of users. When a leak occurs in an IoT network that works with blockchain technology, it is easy to pinpoint the source of the leak.
In the aspect of security, blockchain can offer IoT an extra security layer that has to be breached before a hacker can access the data stored. Breaching a PoW blockchain, for instance, the intruder has to burn a massive amount of energy and gain control of 51% of computational resources, which is almost impossible.
Apart from that, it is not easy to pinpoint the original owner of a dataset because numerous devices are connected to it. By incorporating blockchain technology into the IoT network, transparency is achieved. Stakeholders can easily access the record to see the history of transactions, making it easy to pinpoint leaks.
Blockchain can offer the trust element to IoT, thereby clamping down on the amount of money spent on improving trust in a typical IoT network.
A typical example is a smart home:
Smart homes depend on IoT to function, and adding blockchain into the mix will improve its functionalities. When only IoT manages smart homes, there is the possibility of security issues because of centralization. If an intruder accesses centralized data, they can control the home. In the US, a smart home was hacked for twenty-four hours, and it left the homeowners distraught.
Issues like this can be nipped in the bud if an extra layer of security offered by blockchain is incorporated into smart homes.
Relationship Between Blockchain and AI
Blockchain and AI have effects on data, meaning that incorporating both technologies into a platform could solve incredible issues. They can strengthen the strengths and weaknesses of each other.
Artificial intelligence computers are faster than a typical human being, meaning that if it is incorporated into a blockchain, it could improve the operations of the chain.
How AI and Blockchain Can Work To Disrupt Change
AI and blockchain may have their differences, but when they are combined in architecture, they can add some incredible features:
- Improve the sharing process.
Before an AI system can work effectively, it needs access to data. Getting access to data is not an easy task because of bottlenecks like trust and sharing hiccups. Blockchain incorporates trust and transparency, thereby encouraging more people to share their data because they know that they can control the way their data is used, and benefit from sharing it.
- Data Privacy
Blockchain offers an extra layer of security that makes it difficult for data stored to be accessed by intruders. AI needs data to survive like earlier mentioned. The data that is fed to an AI system tends to be sensitive and needs to be secure at all times. This is another way blockchain can be used.
- Improve the security of dApps
Though blockchains are highly secure, the platforms built on these chains are not as secure. There have been cases of hacks affecting decentralized applications. If a well-programmed AI is incorporated into a chain, it can spot an incoming hack, and stop it.
In Conclusion…
- Blockchain, IoT, and AI have intriguing benefits, but they have some issues that could affect their operations. This is why they need to interact with one another to plug their problems.
- Blockchain can incorporate transparency into AI and IoT, thereby improving the trust element in both technologies. Defi platforms built on blockchain have been plagued with hacks, which is something that AI could alleviate if it were added to the underlying technology. As time goes on, the lines between the application of these technologies will blur.
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