The Intersection of Blockchain and IoT
The future anticipation of IoT where all devices are connected and are smart enough to automate everything while keeping the data private is still far-fetched. Unfortunately, IoT industry is at a standstill. A traditional cloud-based approach has provided complete connectivity to the internet, but it has pitfalls in interoperability, automation, and data privacy. Blockchain technology can provide a decentralized approach to these pitfalls.
The convergence of blockchain and IoT has transformed into a vibrant ecosystem of companies. The intersection of these two industries has enabled companies to develop blockchain components and solutions for smart cities, renewable energy, supply chain, transportation, and other IoT-enabled sectors. It is simple to categorize all of these companies together as ‘blockchain and IoT,’ but they differ in scope, approach and focus on different layers of the blockchain and IoT tech stack.
IoT devices are interconnected, and they capture and transmit data to the blockchain. IoT devices support one or more types of connectivity networks. A blockchain platform enables the building and running of Decentralized Applications (DApps) which is user-facing software built on blockchain infra that uses data, user inputs and smart contracts to perform specific tasks. DApps consists of infrastructural components like compute, storage, network resources. It includes protocols like consensus, permissions, other network rules and it also includes services, tools, and modules to facilitate DApps.
IoT devices bind the physical and the digital world. It can increase the reach and impact of many applications. IoT enabled applications can send and receive data from IoT devices which operate as nodes in the network, unlike non-IoT applications that only process data from user-generated actions. Experts estimate 100 billion IoT devices in the market by 2023 that will digitally record the physical history of the world. Connectivity is information passing down between devices, gateways, and servers. To optimize performance and minimize costs, it is critical to understand the characteristics and compatibility of various connectivity types because every IoT use case is unique.
Significant innovation in blockchain is done in the base platform layer to support future heavy duty applications. All blockchain platforms are unique but share the same vision of attracting developers to their platform by providing superior technology, governance, and user experience. These platforms enable developers to build, deploy, and maintain software applications within the same technical environment. DApps powered by blockchain run on decentralized peer-to-peer (P2P) networks.
The intersection of the blockchain, IoT, and connectivity technologies are giving birth to new possibilities. Blockchain and IoT provide data privacy solutions and drive data ownership to consumers. On the other hand, they provide trust amongst otherwise untrusted parties, new business opportunities, and brand new engagement models to enterprises. Blockchain industry is at the threshold of a technological breakthrough in scalability, interoperability, and privacy.