By the year 2020, there will be as many as 30 billion new IoT devices online. This dramatic increase in the number of internet-connected devices will allow consumers and businesses alike to link together like never before. But with this new era of connectivity also comes some very real risks. Everything from patient monitoring devices and home security systems will become vulnerable to hacking and data breaches thanks to the backdoor security vulnerabilities that currently exist in nearly every IoT device. Likewise, the privacy and validity of any transactions that occur over IoT devices pose an additional area of concern for those interested in adopting this nascent technology.
However, a solution may already exist in the form of blockchain – the backbone of the popular cryptocurrency Bitcoin. According to Itransition company experts, applying blockchain to IoT could provide the affirmation of safety that consumers and businesses need.
Blockchain By Any Other Name
Once synonymous with cryptocurrency, blockchain is now increasingly recognized as a technology worthy of recognition in its own right. It is based on a distributed ledger or decentralized system, and security is one of this record keeping system’s greatest strengths. Consisting of identifiable member participants, each of whom is part of the blockchain network, this ledger-based ecosystem requires a majority consensus for each transaction in the blockchain. The verification process of each transaction is completed via intensive mining that utilizes complex algorithms, the end result of which is a proof of work. Due to the high computational cost of completing this work, regular computer systems are incapable of duplicating the process, reducing the odds of hacking. Once the authentication of a transaction is complete, it is added to the blockchain, where it remains immutable.
The Current State of IoT
Both consumers and businesses are keen to invest in blockchain and IoT. A study by Gartner found that blockchain is estimated to add $3.1 trillion in value to the business sector. Likewise, Forbes predicts that IoT will be similarly influential with the total amount of market value topping $450 billion by 2020. However, for widespread implementation of IoT devices to occur, the security issues surrounding the billions of soon-to-be connected devices must be addressed.
IoT devices are designed to be unobtrusive, which often means small and lightweight. As a result, they are not typically designed with the type of malware, firewall, or authentication protocols that a laptop or even a smartphone has when it leaves the manufacturer. This makes them uniquely, if not inherently, vulnerable to a host of security breaches. Ironically, this hasn’t prevented consumers or businesses from investing in convenient apparatus like smart cars, fitness trackers, home security cameras, and remote thermostats. In addition, many healthcare providers have also started to invest in IoT solutions like wearable sensors, medical asset monitoring, and equipment usage tracking. The latter point raises additionally valid concerns about the security of sensitive health-related data.
Blockchain and IoT Together
Deploying IoT devices involves a lot of moving parts and having to recall them if they go rogue (due to a breach) is likely to be even more challenging. Adding blockchain to this process can eliminate the possibility of widespread failure due to a single weak security link and help protect all devices from unauthorized access. Blockchain’s distributed ledger is also ideally suited to simplify the deployment of IoT devices, as there is no intermediary to go through. Improving the resolution process for any maintenance or troubleshooting related to such systems is also possible with blockchain, thanks to its detailed historical record keeping and device connectivity tracking capabilities.
With unparalleled amounts of data passing to and from IoT devices, some of the most sensitive data, including enterprise logistics, transportation system logs, and patient health information, is susceptible to hacking. A security breach can wreak havoc on business processes, make consumer vulnerable to identity theft or even cost lives if IoT vehicles are hacked. But the anti-data tampering protection built into blockchain architecture can significantly reduce or even eliminate these threats, allowing for a seamless and highly secure data exchange between devices.
The internet was originally designed to facilitate communication, not transactions. Today, trillions of transactions from all around the globe occur over the internet. IoT devices are similarly ill-designed to handle financial transactions. But the inevitable influx of devices that will soon be online requires them to be held to a new standard. Consumers and businesses alike need to know that their financial information is secure when they use these devices. Smart contracts can help make this happen.
Activated once a specific action or condition is met, smart contracts can be added to any blockchain transaction, creating a level of transactional sophistication powerful enough to support legal contracts and project-based invoicing, as well as anything in between. Smart contracts are also customizable, ranging from single to multi-layer, allowing their authors to add buyer/sell details, transactional value information and even restrictions on the timing of the contract. Of course, authentication is also assured as each IoT device can be registered directly to the blockchain via a public key, visible to all members.
Healthcare providers using sensors to monitor patients or track asset-related data can also reap the benefits of a blockchain-enabled smart contract. Known as microtransactions, anything from patient medication adherence to machine utilization can be recorded and tracked via a smart contract and an autonomous IoT device. In fact, this process actually represents an entirely new business category that is sure to become more popular as more healthcare-based IoTs go live.
When it comes to blockchain, IoT, and authentication, the possibilities are wide open. As i-Scoop put it, “Blockchain technology could provide a simple infrastructure for two devices to directly transfer a piece of property such as money or data between one another with a secured and reliable time-stamped contractual handshake.”
The Future is Now
Independent of one another, blockchain and IoT are each changing the way that consumers and companies interact with both one another, as well as, the overall digital landscape. When combined, these two technologies offer powerful solutions to some of the day’s most pressing issues surrounding security and authentication. In a matter of years, industries like e-commerce, logistics, and even healthcare may be thoroughly changed – and more secure than ever before – thanks to the marriage of blockchain and IoT.