How blockchain can help IoT deliver ROI
From wearables to wind turbines, the application of sensors on the things around us has become ubiquitous. But even with a projected 10 billion more devices connecting to the Internet in the next four years, the IoT still suffers from a lack of shared architecture to interconnect, nevermind authenticate or monetize distributed machines. This doesn’t just limit business model success and ROI, but customer value, product utility, security, compliance, and innovation made possible through data.
And analysts are pointing to blockchain for IoT as the future. Blockchain is a peer-to-peer distributed ledger technology designed for transactional applications. With a list of cryptographically secured data records, each hardened against both tampering and revision, blockchain can help reduce costs, accelerate transactions, and build trust between people and parties who transact together.
What does that mean for IoT?
Efficiency + cost savings
Because it’s decentralized, blockchain has the power to massively reduce the cost and complexity of operating businesses. You’re gaining the ability to track and trade any data point across the world efficiently and securely, without added infrastructure, since data is traded on a peer-to-peer basis and the cost — in both money and time — of the middle man has been eliminated.
With devices able to communicate with secure blockchain-based ledgers, IoT devices become secure ways to conduct transactions. Customer information can be tracked and traded across a variety of connected devices, ensuring that the customer experience is seamless, and that information still remains private and inviolable. Secondly, the use of encryption and distributed storage means that data can be trusted by all parties involved in the supply chain.
The technology is doing the heavy lifting here, with machines recording the details of every transaction that passes through, with no human oversight. And since the private keys that enable write-access to the blockchain remain in the possession of the machines, no human can get their sticky hands on any record and overwrite it.
It’s a way to give customers a sense of security when transacting with your company, whether it’s a purchase or their personal data. The customer might not be familiar with the device they’re interacting with, but with blockchain backing that transaction, they know it’s secure.
Blockchain’s transparency also means that oversight is amped up considerably — which is essential in an ecosystem that is, by definition, crying out for it. The Internet of Things is a complex web of networks and companies, and therefore a ripe target for fraud. But since blockchain records are built to be transparent, all activity can be monitored for suspicious trends by anyone who can connect. The blockchain record makes it simple to identify and act on that information right away.
With a projected 10 billion more devices connecting to the Internet in the next four years, the business potential is huge. Join the latest VB Live event to learn more about intersections between IoT and distributed ledger technologies and explore how they can unlock the security required to realize a profitable Future of Things.