By Knud Kegel, VP Product, EMnify.
Blockchain is nothing new. Originally proposed in 1982 and finally exploited as the technology behind Bitcoin in 2008, blockchain acts as an immutable, publicly distributed ledger. Each block cannot be edited and cannot be deleted. It is secure, decentralized and tamper-proof.
These attributes have immense value for IoT infrastructures and point the way to a more transparent future. Blockchain technologies can be used to support IoT deployments by improving decentralization, increasing security, and creating better visibility for connected devices.
In an accelerating digital world, here are five key ways IoT and blockchain can work together to improve business outcomes.
1. Data authenticity for quality assurance
Thanks to its immutability, the blockchain can add a robust framework to quality assurance processes. When a company combines IoT and blockchain technologies, it can quickly and accurately detect any instances of tampering with data or goods.
For example, a cold chain surveillance system could use blockchain to record, monitor, and distribute IoT data indicating where a temperature spike occurred and which party was responsible. Blockchain technology could even trigger alerts to notify both parties when a shipment’s temperature exceeds a certain threshold.
And if someone tries to dispute the credibility of the data collected by an IoT device, blockchain holds the evidence of changes or anomalies.
2. Device tracking for error detection
IoT networks can be huge. A deployment can easily consist of thousands or even hundreds of thousands of endpoints. It’s just the connected nature of modern business. But when you have such a mass of IoT devices, errors and inconsistencies can appear like random events. Error patterns can be difficult to spot, even when a single device encounters problems repeatedly.
However, blockchain technology makes it possible to assign a unique key to each IoT endpoint that sends encrypted challenge-and-response messages. Over time, these unique keys create device profiles. They help identify inconsistencies and confirm whether a bug is an isolated event or a recurring bug that requires attention.
3. Smart Contracts for faster automation
IoT technologies enable automation. This is one of its fundamental advantages. But when an endpoint sees something that requires manual intervention, everything stops. And that could be very damaging to an organization.
Perhaps a hydraulic hose fails, contaminating a production line and shutting down production. Or maybe IoT sensors will indicate that your perishable goods have spoiled or suffered frost damage in transit.
With smart contracts, blockchain can be used to authorize responses over the IoT network. For example, a factory could use predictive maintenance, monitor that hydraulic hose, and trigger a replacement part before it fails. Or if perishable goods are spoiled in transit, a smart contract can automate the exchange process to reduce delays and protect customer relationships.
4. Decentralization for more security
There is no getting around the fact that IoT devices can be hacked. Especially if you use Wi-Fi instead of the cellular connection methods provided by EMnify. With cellular connectivity, you are completely disconnected from any local network, meaning there is no interaction with nearby unsecured devices.
Still, aspects of the blockchain can add an extra layer of security, regardless of the connectivity methods you use. Because the blockchain is decentralized, malicious third parties cannot easily hack a single server and corrupt your data. Also, every attempt to access data and make changes is immutably documented. And with blockchain, just because someone has physical access to a device doesn’t mean they have access to its data or functionality.
5. Usage records for employee performance
Blockchain can also go beyond the technology of IoT sensors and track user actions as well. This can allow organizations to see the who, when, and how of device usage.
Just as a device’s history provides insight into its reliability, a user’s history can be used to assess its reliability and level of performance. This can help companies reward employees for good work, analyze patterns and decision-making processes, and improve the quality of results.
A shared future
These are just some of the ways that Internet of Things and Blockchain can be used in collaboration to solve trading challenges. As technology accelerates, Blockchain IoT is an exciting and emerging growth area that will impact the future of many industries for years to come.
About the author: Knud Kegel is VP Product at EMnify, the global provider of cellular IoT communication platforms. He leads EMnify’s product teams in transforming IoT connectivity into an easy-to-use cloud resource. Prior to EMnify, Knud was SVP Marketing and Business Development at CoreMedia, a provider of experience management software for global brands. Knud has over 10 years of leadership experience in the B2B SaaS industry.