Blockchain and the Internet of Things are a perfect match

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The Internet of Things technology has led to new concepts like smart factories, cities, vehicles, and next-generation agricultural tech, among other uses. Nearly every industry wants to take advantage IoT, and the world is well prepared for that. Nearly everyone has a smartphone or tablet device these days. Many of these devices are equipped with WiFi-enabled sensors that can transmit data to a central server. IoT allows machines such as factories, traffic lights, and airplanes to communicate with each other. The rise of IoT could pose some problems. The proliferation of devices collecting, sending, receiving, and processing data will cause congestion in existing networks, which will lead to high storage and compute costs. This is why blockchain is often referred to as the ideal platform for IoT devices. Blockchain stores data on a distributed, decentralized ledger, which is hosted on multiple nodes. Because it is immutable, the data within it cannot be altered. Combining blockchain and IoT creates a reliable and secure way to store data generated and processed by intelligent devices. It’s also decentralized so there is no need for central control, management, or maintenance. There are no high costs associated with it. IoT and Blockchain: What are the Benefits? Given these advantages, it’s not surprising that blockchain has made significant progress. According to International Data Corp data, almost 20% of all IoT deployments in 2019 were powered by blockchain solutions. Statista estimates that the total IoT device installed base will reach 75 billion by 2025. This is a huge area of potential growth. If we continue to rely upon traditional cloud-based networks, it will be difficult to deal with the enormous amounts of data generated by IoT. There are many costs to consider. Cloud networks can be very expensive in terms of storage and processing speed. The problem is that IoT ecosystems have a highly centralized, broker-based communication model that is based on a client/server architecture. Each device is identified, connected, and authenticated by cloud servers. These servers use large amounts of storage and processing power at very high costs. Cloud networks can also be vulnerable to outages that can make data unavailable or even disappear forever. Blockchain for IoT advocates say decentralized networks will make it easier to track billions and enable distributed processing and coordination at lower costs. Companies will no longer have to rely on cloud servers by adopting a standard, peer-to-peer communication method to process large volumes transactions between connected devices. Blockchain will eliminate single points failures, which is a major problem in today’s centralized cloud networks. Because it uses cryptography to protect the data it collects, blockchain is extremely secure. It will not be easy to migrate IoT workloads onto a blockchain-based infrastructure. There are many key issues to overcome, but there are also some interesting solutions that are being developed. Blockchain is not a low latency protocol. This is one of its biggest challenges. Due to this, most blockchains can only process a small number of transactions per second. This presents problems for large-scale IoT device network because they require very rapid data transfer rates to keep up. Ethereum, the most popular smart contract platform, can only process seven transactions per second. The Ethereum network is congested, which can lead to high transaction costs. It is not a platform that can support large-scale IoT deployments in its natural state. This problem could be solved by scaling solutions such as Boba Network. It is a Layer-2 network that uses hybrid compute platforms and speeds up transactions at lightning speed. Its costs are lower than traditional Layer-1 networks. Boba Network uses a technology called optimistic rollsups that allows multiple transactions to be bundled together and processed simultaneously. This allows transactions to be processed faster and more economically, since the gas fees for each bundle is split between them. Boba Network’s hybrid computing technology makes it an ideal fit for IoT data. It allows Ethereum smart contracts to communicate with any external Web2 API or sensor, allowing them to collect and process real-world data. The compatibility issues with blockchain are another problem. Although SQL datasets are the standard for IoT networks and have been successful, blockchain is not well-suited to be used as a traditional database because it stores data in blocks rather than rows and columns. Its distributed nature makes it incompatible with SQL-type databases. There are still some promising projects that aim to address these compatibility issues. IOTA has created an IoT-compatible blockchain that uses a Directed Graph-based tangle structure instead of standard blocks. This makes it more suited for storing the kind of chronologically-ordered data created by IoT devices. IoT Blockchain Applications at WorkThe combination blockchain and IoT can be used in many different applications. Logistics is one of the most important applications. It is essential for many global industries. It ensures that raw materials and finished goods are always available and get to their destinations. Logistics and supply chain industries face many challenges. These include too much paperwork, lack control over shipping, traceability issues, transportation difficulties, and more. Many of these problems can be solved by combining IoT with blockchain. They can be combined to store and collect data such as the location, time of arrival and departure, temperature of goods in transit, status of containers being shipped, and so forth. Blockchain is immutable and decentralized so anyone can access it at any time. Ambrosus is one company that has done this. It created a blockchain-powered IoT network to support the pharmaceutical and food logistics sectors. It relies on a network blockchain-connected sensors to give full visibility into goods throughout their supply chain, allowing for faster and more efficient movement. Another example of how blockchain can be used together is the connected car. IoT-enabled sensors are being used by car manufacturers to create automated vehicles. Blockchain opens up many new opportunities for the industry in smart parking, automated traffic control, and other areas. NetObjex has created a smart parking system that is powered by IoT, blockchain and other technologies. It has created a platform that allows autonomous vehicles to find a parking spot quickly using integrated payments using cryptocurrency. This was possible through its collaboration with PNI which designs smart parking sensors. The energy sector is last but not least, as it has already benefited from IoT-enabled sensors that have led to the creation so-called smart meters. Smart meters can upload data in real time and allow for better distribution of energy throughout the grid when IoT is combined with blockchain. For example, a home with solar panels can generate surplus power that is returned to the grid. This reduces energy wastage. Brooklyn, New York is an example of this. These solar-powered homes are connected via so-called microgrids that allow smart meters to communicate with each other over a distributed network. These homes can now buy and sell electricity from each other through this network. The blockchain facilitates transactions and ensures everyone can save money on their energy bills. Disclaimer: This article is intended for informational purposes only. This article is not intended to be used for legal, tax, investment or financial advice.