Combining Blockchain with the Internet of Things
The Internet of things (IoT) is transforming the way enterprises operate through the use of sensors and other edge devices and infrastructure. With the multifold number of connected devices growing every year, the amount of data processed by IoT devices is enormous. These data are supplied in a chain and exposed to attacks by cybercriminals.
Blockchain is a distributed ledger technology that combines with IoT to make machine-to-machine transactions possible. It uses a set of transactions that are recorded in a database, verified by multiple sources and entered in a common ledger distributed across every node. The combination of IoT and blockchain offers various potential benefits and allows a smart device to function autonomously without the need for a centralized authority. It can also track how devices communicate with each other.
While blockchain and the IoT are each powerful, the combination of these two technologies can be incredibly leveraged by enterprises. A study released by Aftrex Market Research in 2018 found that the combined blockchain and IoT market is estimated to reach $254.31 billion by 2026.
Benefits of blockchain and IoT that will propel the market growth in years to come:
Lower Costs
One of the most praised benefits for enterprises is the ability to reduce operational costs. Blockchain allows data to be submitted on a peer-to-peer basis without centralizing control, which lowers business expenses. Scaling a highly reliable centralized infrastructure is bound to be expensive. Decentralization enables a more cost-effective way to eliminate single points of failure while addressing the scale of IoT.
Accelerated Data Change
According to Aftrex Market Research, one of the leading benefits of the combination of IoT and blockchain is accelerated data change. Reportedly, the current implementation of blockchain has its limitations with this facet because it caps the number of transactions per second. A more enterprise-grade approach, like a permission-based blockchain, is required to handle the amount of data, the number of devices of IoT, and the speed at which two parties transact. A blockchain that can minimize the time to validate transactions by leveraging trusted nodes is essential to handle the performance requirements of IoT, and it is one that can handle the speed of IoT data exchange.
Treamlines Accounting
Accounting is one of the first departments within an enterprise that could benefit immediately from the added transparency provided by blockchain and IoT. It is crucially important for entities to know what organizations are sharing/sending money/data across a linear, time-stamped chain. It’s a hardened and reliable chain of transactions that can’t be changed.