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The Internet of Things (IoT) is a rapidly expanding industry that has the potential to transform almost every aspect of daily life as we know it, including homes, cities, farms, industries, and other establishments.

However, the IoT industry’s haphazard development will present several challenges, such as locating, connecting, protecting, and managing so many devices. It will be relatively difficult for today’s internet and online service design and infrastructure to support large-scale IoT ecosystems in the future.

Blockchain technology could aid in the resolution of this issue as it has the potential to liberate IoT ecosystems from the traditional broker-based networking paradigm, in which devices rely on a central cloud server for device identification and authentication.

This article explores how blockchain technology is contributing to the growth of the IoT industry.

What is IoT, and How Does it Work?

The Internet of Things (IoT) is a vast network of interconnected objects and people who share information about the things they use, how they use them, and the environment in which they use them.

People are predominantly familiar with the use of phones and automobiles in this field, but several other devices can be used in IoT. Microwaves, home thermostats, wearables such as heart rate monitors, and high-value commodities such as self-driving cars are all examples of IoT-compatible devices. City lights, freeways, and railroad tracks could all be linked to the Internet of Things.

The sensors and devices that comprise an IoT system interact with the cloud in a specific way to exchange data. After the data is transferred to the cloud, the software analyzes it and may decide to take action, such as changing sensors or devices automatically or issuing an alarm without the user’s input.

On the other hand, a user interface is available if user input is required or if the user simply wants to check on the system. Any user adjustments or actions are then transmitted back through the system in the opposite direction (i.e., from the user interface to the cloud and back to the sensors and devices) to effect the desired change.

People are often unaware that their data is being collected, which has resulted in crises such as the Facebook scandals and systemic privacy issues discovered in well-known IoT devices such as iHome in 2019.

These factors are contributing to the growth of the blockchain-IoT sector. People are becoming more concerned about security as IoT-connected devices become more popular, and businesses are paying more attention to operational efficiency and user privacy.

Why is Blockchain Technology Crucial to the Future of the Internet of Things?

The Internet of Things can connect multiple devices through a cloud-based ecosystem. It may one day support smart city infrastructure, making communications far more streamlined and effective than they are now. However, the IoT’s current reliance on centralized infrastructure poses a significant challenge. Private information could be exposed to hackers as a result of this.

Blockchain technology solves this problem through smart contracts, which give people control over their data via a network of interconnected devices.

Unfortunately, there are impediments to full blockchain integration with IoT. At the moment, every IoT device that communicates with another must be on the same blockchain.

Future IoT will need to rely on a blockchain network, similar to how the internet is powered by a massive web of servers. The lack of scalability is the reason why IoT and blockchain have yet to work well together.

Despite these challenges, the combination of blockchain and IoT has the potential to be transformative. A fully integrated blockchain and IoT will make it simple to connect businesses that rely on each other, such as insurance companies and supply chain logistics. Data would be far more secure because each IoT transaction would be permanently recorded.

Use Cases of Blockchain-IoT Integration

Here are a few examples of how the combination of IoT and Blockchain could have a significant impact on several industries:

Logistics and Supply Chain

A global supply chain network includes multiple parties, including brokers and raw materials, making end-to-end visibility more difficult. The supply chain may span several months and involve numerous payments and invoices. Delivery delays are a major issue due to the sheer number of stakeholders involved in the chain.

Businesses suffer significant losses owing to the complexity and lack of transparency in today’s supply chain and logistics industry. As a result, companies are now utilizing IoT to track movement throughout the shipping process. Implementing blockchain technology in the IoT can improve network reliability and transparency.

Automotive Industry

Today, digitalization in the automotive industry is a competitive requirement. The automotive industry is developing fully automated vehicles using IoT-enabled sensors.

The decentralized network can be used to connect industrial IoT solutions in the automotive industry, allowing different users to exchange vital information quickly and conveniently.

The integration of blockchain technology and IoT in the automotive industry may result in the following:

Electronic payments for gasoline
Self-driving automobiles
Automated traffic control
Smart packing

Smart Home

IoT-enabled smart devices may become indispensable in day-to-day living. Thanks to IoT-blockchain integration, home security systems can now be controlled remotely from a smartphone.

However, the traditional centralized data sharing method used by IoT devices raises concerns about data ownership and security.

The smart home concept could benefit from blockchain advancements by ensuring infrastructure decentralization and addressing security concerns.

Sharing Economy

The sharing economy concept is gaining significant traction all over the world. Blockchain technology can potentially enable the development of self-sustaining sharing economy applications that generate revenue by making it easy to send products to different people.

Pharmacy Industry

Every day, the problem of counterfeit medications in the pharmaceutical industry worsens. It is also difficult to trace the entire route of medications. Because blockchain technology is open and traceable, it could be used to track drug shipments from the beginning of the supply chain to the end.

Agriculture

Producing more food for an expanding population is critical to achieving the highest levels of customer satisfaction while minimizing environmental impact and maintaining supply chain transparency.

Blockchain and IoT have the potential to transform the food production industry.

Installing IoT sensors in farms and directing their data to the blockchain can help to improve the food supply chain.

Examples of Companies Combining IoT with Blockchain Technology

Golden State Foods (GSF)

GSF is a well-known manufacturer and distributor of food products. The goal of GSF, which supplies more than 125,000 restaurants, is to create and deliver high-quality products.

GSF is collaborating with IBM to improve business processes using blockchain and IoT. The data from the blockchain sensors ensures that problems are automatically detected and reported before they become serious.

NetObjex

NetObjex‘s smart parking system is powered by blockchain and IoT. The connection makes it easier to find a free parking spot in the lot and automates payments made with cryptocurrency wallets.

The company has partnered with the parking sensor company PNI to identify vehicles in real-time and determine whether a parking space is available. IoT sensors calculate how much it costs to park for a specific period, and payment is made immediately via a cryptocurrency wallet.

Telstra

Telstra offers smart home solutions. The organization implemented blockchain and biometric security to ensure that the data collected from smart devices remains tamper-proof.

Sensitive user data (such as biometrics, facial recognition, and speech recognition) is stored on the blockchain for added security.

Once the data is stored on the blockchain, it cannot be altered, and only authorized personnel can access it.

Mediledger

Mediledger tracks when the ownership of prescription drugs changes legally. Transparency and traceability are critical when tracking critical healthcare supplies.

Manufacturers, wholesalers, dispensers, and customers can access immutable, time-stamped data from the distributed ledger.

Midiledger employs blockchain technology to streamline payment processes, prevent counterfeit drugs from entering the supply chain, and maintain user access control.

Pavo

Pavo provides farmers with a new, intelligent approach to farming as well as unparalleled transparency. The data collected by Pavo’s IoT gear deployed on farms is stored on the blockchain.

Farmers can improve their farming practices by analyzing recorded data. It can assist distributors, retailers, and customers in deciding whether or not to purchase a specific crop or food item.

In Conclusion,

Businesses can use blockchain technology to manage data on edge devices in an IoT system, lowering the cost of data transit and device maintenance.
IoT-blockchain systems reduce the risks associated with data management because there is no centralized data repository, and the ledger is not vulnerable to cyberattacks.
IoT-blockchain systems also reduce the amount of time required to process data by eliminating the IoT gateway and any other intermediary devices.
The lack of widespread adoption of IoT-blockchain technology is due to technical and practical issues.
Maintaining the ledger on edge nodes is inefficient because smart devices cannot currently store large amounts of data.
Scalability and storage are critical issues in blockchain systems that maintain a large, centralized ledger.
Blockchain technology will make IoT adoption safer, more private, scalable, and environmentally friendly in our homes, cities, and around the world.

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