Will Blockchain Revolutionize the Internet of Things?

2018 is poised to be a year of scaling and specialization for the Internet of Things (IoT). Not only will we start seeing this technology being utilized more frequently, we’ll also witness its evolution from general-use applications towards tailored, specific functions.

Of course, this all depends on if 2018 is a successful year for IoT development; many obstacles lie in the way, many of which don’t have apparent solutions yet. But now, many experts are starting to think that blockchain technology may be able to take care some of the problems currently plaguing IoT.

Tackling the Biggest Flaw of IoT

Without a doubt, cybersecurity (or lack thereof) is the biggest hurdle that IoT must overcome to achieve mainstream use. Blockchain could be the solution that IoT so desperately needs by acting as the backbone of a secured mesh network that allows IoT devices to interconnect while dodging the threats that plague central server models.

This approach to security would bring many of blockchain’s best qualities to IoT — decentralization, resiliency, and privacy. By being decentralized, the mesh network would be unsusceptible to single-point failures as well as the man-in-the-middle attacks commonly used on IoT devices. Even if a hacker managed to manipulate one blockchain copy, they’d just create more work for themselves in the end.

Ahmed Banafa explains blockchain’s benefits for data: “Blockchain is promising for IoT security for the same reasons it works for cryptocurrency: It provides assurances that data is legitimate, and the process that introduces new data is well-defined.” Banafa is an IoT expert as well as a lecturer at San Jose State University. His overview of blockchain’s potential as an IoT solution helped bring the idea of combining the two into the spotlight.

The Need for Infrastructure

Indeed, protecting the integrity of the data is an absolute necessity. The future is going to be filled with embedded processors and sensors everywhere, and it’s of the utmost importance that this data collection is put to good use, not nefarious schemes. But protecting Bitcoin is arguably easier than something much more diverse and physical like IoT.

As Thomas Hardjono puts it, “Just using blockchain to register a device doesn’t get you much. We need infrastructure to manage devices and control who has access to data.” The Boston-based CTO of MIT Connection Science, an organization focused on improving human networks, recently described his vision for ChainAnchor, a blockchain IoT infrastructure framework.

ChainAnchor would rely on extra security layers maintained by IoT device makers and independent third parties. Their incentive for doing so would be similar to how many companies make money today — the companies involved would be able to sell anonymized data from the supported IoT devices on the network.

Filtering Through the Noise

Besides protecting the data, another blockchain could also act as a storage solution for the massive amounts of data that IoT gathers and uses. But not in the way you think. The main problem isn’t “How will we store this data?” It is “How do we make sense of this mountain of data?” Filtering out all the noise and making the data meaningful has proven to be difficult. And this amount of data will only grow.

Hyundai Digital Asset Company, or Hdac, is on a mission to streamline making use of the data with blockchain. Owned by the nephew of Hyundai Motor Company’s owners, the company wants to use blockchain to optimize data authentication, storage, and communication.

To do this, Hdac is utilizing a double chain system. By having a public and private blockchain, Hdac is able to increase transaction volume and rate. Besides speed, it allows the company to provide a high level of confidentiality and immutability while processing IoT data.

Turning Strengths Into Weaknesses

Unfortunately, some unique limitations come up when combining blockchain and IoT. One of blockchain’s greatest strengths is its reliance on a consensus to confirm transactions. This need for the majority of a network to verify a transaction is one of the reasons why blockchain’s security is so solid.

But when it comes to IoT networks, especially private ones like those you’d find in homes or offices, reaching a 51 percent consensus is not nearly as difficult as it is in a cryptocurrency network. Crypto networks have a diverse set of nodes (members) distributed all throughout the world. But with small IoT networks, not only are there way fewer nodes to corrupt, but they’re all in one localized area.

Similarly, the amount of computing power required to validate a transaction and record it to the blockchain is vastly different between a cryptocurrency network and IoT network. This transaction validation, known as the proof-of-work step, usually requires specialized equipment to complete for cryptocurrencies these days due to the immense amount of computational power it demands. IoT drastically reduces the barrier to accomplish this due to the fact that everything in this situation, from the network, devices, and power demands are less complex than those required for cryptocurrency proof-of-work.

Seeing the Big Picture

Blockchain brings some big benefits to IoT. But the combination also results in some new conundrums that replace the former flaws. Regardless, the whole situation stems from a bigger problem facing the modern technological world — are our current methodologies for handling data outdated? Are we in need of a digital infrastructure reform?

The amount of data that the average human produces is about to exponentially increase as these new technologies are integrated into our everyday lives. And while it will bring many improvements to our lives, the amount of damage that can be done could increase too. These thoughts are important to consider. After all, blockchain may be the answer to IoT’s problems for now, but thinking ahead will always be the solution to challenges further in the future.