IoT And Blockchain: The Benefits And Challenges

IoT devices have already started to change our lives significantly. Tremendous amounts of information are travelling through the airwaves as different devices communicate with each other every day. However, one of the major challenges that an IoT active environment presents is a secure ecosystem. With so much information going back and forth, security becomes a major issue. So how can we ensure security in devices which relies so heavily on quick and open communication?

The answer may lie in Blockchain.  In this article, we will talk about these two technologies and how they can be used together to make communications secure in the future.

First, let me briefly explain these two terms.

What is IoT?

IoT stands for the “Internet of Things.” It is a concept of connecting any electronic device to the internet and to each other, including mobile phones, washing machines, coffee makers, laptops, desktops, lamps, watches, headphones, and more. You can think of it as a giant network of things and people that are connected to each other.

What is Blockchain?

Blockchain is a ledger or a list of records that is continuously growing. You can think of them as ledgers (like Excel spreadsheets) which keep records of various transactions between parties and accepts inputs from different parties. They are designed to be resistant to modification of data and can only be changed when there is a consensus among the groups responsible for that particular blockchain.

Challenges to Securing IoT

TechnologyMost IoT systems use different protocols and technologies, which create complex and sometimes conflicting configurations.

Logistics Issues: In such a broad ecosystem, the business model and practical aspects of IoT need many agreements.  Currently, these devices have limited maintenance and management and as more and more people are making use of these technologies, these issues need to be addressed now.

Legal and compliance issues: IoT devices lack any standards for authentication and authorization; not to mention, the privacy concerns are complex and not inherently evident. At the moment, the security standards for IoT platforms are still immature.

A Centralized Model: Current IoT systems use a centralized, brokered communication model, also called a server/client paradigm. While this model has connected generic computing devices for decades, it cannot respond to the growing needs of the huge IoT ecosystems of the future. The sheer volume of communication that will need to be handled amongst the potential tens of billions of IoT devices presents many economic and engineering challenges.

The Blockchain Approach

The “distributed ledger” technology that blockchain provides is a practical solution for the above-mentioned problems. It provides a decentralized platform with a peer-to-peer communication model that can process the hundreds of billions of bytes of data communications between devices. It also helps prevent the entire network failing should one node fail.

Blockchain is designed to be secure, transparent, highly resistant to outages, auditable, and efficient. It is the best way to settle the privacy and reliability concerns in IoT.

The cryptographic algorithms used by blockchains would secure communications between IoT devices, keeping data private. Since the information is not in any single location, the information is tamper-proof and cannot be manipulated by malicious persons such as hackers. It makes trustless, peer-to-peer messaging possible, a fact that has already been proven in the financial sector, through cryptocurrencies like bitcoin.

The Challenges of integrating Blockchain with IoT

Sadly, despite the benefits that blockchain may provide, there are certain flaws and shortcomings present.

Processing Power And Time: The amount of processing power and time needed to encrypt all the data in a blockchain-based system is immense. IoT systems are diverse and consist of a number of devices with different computing capabilities. Many of these devices may not be able to run the encryption algorithms at the desired speed.

Storage: While blockchain eliminates the need for a central server to store transactions and device IDs, that data must still be stored in the nodes themselves. As time passes this data will grow in size as more transactions and device IDs are added. This is beyond the capabilities of many smart devices, such as sensors and cameras.

Lack of Skills: As of now, few people understand blockchain technology, and when we add IoT devices, the numbers shrink even further.

More Legal Issues:  This is a new territory with no legal or compliance code to follow, which is a serious problem for manufacturers and service providers. New legal codes have to be made before the technology can be implemented.

The optimum platform

While there may be some flaws and setbacks that prevent the use of blockchain integration with IoT, that does not change the fact that blockchain is still the optimum platform for IoT devices. This technology is still growing and in time we can overcome these drawbacks and make IoT reach its full potential.