The reason is simple, it is data integrity.
Blockchain is a distributed series of data records, or blocks, linked together as a permanent digital ledger that incorporates transaction information and a timestamp. Once that data is recorded, it can’t be changed or compromised in any way.
Gartner predicts that 14.2 billion connected devices will be in use this year, a number that will reach 25 billion by 2021. These devices will produce inconceivable amounts of data — data which needs to be managed and secured. The immutability of its digital record can open the door to a host of new opportunities in IoT— from supply chain management to cybersecurity.
Blockchains future needs to look far beyond cryptocurrency and embrace IoT as well, this can bring stability and more importantly integrity to the world of IoT which at the moment is badly needed.
Behind the Security of the Industrial Supply Chain
Blockchain has huge potential in environments that track and monitor goods via sensor data. Think RFID tags on goods, but instead scanned and written to a blockchain as they go from manufacturer to distributor to retailer. For manufacturers, that means exponentially more visibility, with access to a clear audit trail of who possessed an asset at a distinct point in time.
Car manufacturers, for example, can potentially use blockchain technology to locate and track shipments of car parts, including their factory of origin and who’s handled the merchandise along the way. In the telecommunications world, blockchain can help operators identify individual connected IoT devices, which include any sort of sensor using mobile networks to communicate such as GPS on lorries, and provide a secure record of each one.
Strengthening IoT Cyber Attack Defences
Beyond addressing supply chain security issues, blockchain can also protect systems and devices from cyber attacks while supporting IoT devices that little in the way of security defences. Without a centralised authority controlling the network and verifying data going through it, hackers now have multiple points of entry. And should they get into the network, they can move laterally until they find their target, like credentials.
Blockchain’s ability to register and verify the identity of IoT devices means that it can open up visibility into the factories from which assets like microcontrollers originate, ensuring that they don’t come to the floor already hacked or compromised. And because blockchain can process millions of transactions accurately and in the right order, it can protect the data exchanges happening between IoT devices. This could prevent a compromised device from shutting down factory operations, or the relaying of false information in hospital medical devices that could potentially harm patients.
Barriers to Entry for Blockchain in IoT
Despite a host of potential benefits, a blockchain in industrial IoT environments won’t for some time. Blockchain’s ability to scale to accommodate the sheer volume of data produced by IoT devices in the next 5 to 10 years will be a major obstacle that must be overcome. Also, processing billions of data exchanges between devices on a daily basis will likely be a resource-intensive and a costly affair.
But as organisations continue to rely on data to make critical decisions, blockchain has tremendous potential to build a foundation of trust, create new services and disrupt outdated business models, making it a vital component of a rapidly changing IoT ecosystem.
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