By Knud Kegel, VP Product, EMnify.
Blockchain is nothing new. Originally proposed in 1982, and finally harnessed in 2008 as the technology behind Bitcoin, blockchain acts as an immutable public distributed ledger. Each block cannot be edited and cannot be deleted. It is secure, decentralized and tamper-proof.
These capabilities have enormous value for IoT infrastructures, and point the way to a more transparent future. Blockchain technologies can be used to support IoT deployments by improving decentralization, increasing security and providing better visibility to connected devices.
In an accelerating digital world, here are five key ways IoT and blockchain can work together to improve business outcomes.
1. Data authenticity for quality assurance
Thanks to its immutability, blockchain can add a robust framework to quality assurance processes. When an organization combines IoT and blockchain technologies, it can quickly and accurately detect any instances of tampering with data or goods.
For example, a cold chain monitoring system could use blockchain to record, monitor and distribute IoT data, indicating where a temperature rise occurred and which party was responsible. Blockchain technology can even trigger alerts to notify both parties when a shipment’s temperature exceeds a specified threshold.
And if someone tries to dispute the credibility of the data collected by an IoT device, blockchain has proof of any changes or irregularities.
2. Device tracking for error detection
IoT networks can be huge. A deployment can easily consist of thousands, or even hundreds of thousands of endpoints. That’s just the interconnected nature of modern businesses. But when you have such a mass of IoT devices, errors and inconsistencies can seem like random events. Failure patterns can be difficult to detect, even if a single device repeatedly experiences problems.
But blockchain technology allows a unique key to be allocated to each IoT endpoint, sending encrypted challenge-and-response messages. Over time, these unique keys build device profiles. They help identify inconsistencies, confirm whether an error is an isolated incident or a regularly occurring error that needs attention.
3. Smart contracts for faster automation
IoT technologies enable automation. That is one of their fundamental advantages. But when an endpoint detects something that needs manual intervention, everything stops. And that can be very damaging to an organization.
Perhaps a hydraulic hose fails, contaminating a production line and shutting down production. Or perhaps IoT sensors indicate that your perishables have been spoiled or freeze-damaged in transit.
With smart contracts, blockchain can be used to authorize responses through the IoT network. For example, a factory can use predictive maintenance, monitoring the hydraulic hose and triggering a spare part before it fails. Or if perishable goods have been damaged in transit, a smart contract can automate the replacement process to reduce delays and safeguard customer relationships.
4. Decentralization for increased security
There is no getting around the fact that IoT devices can be hacked. Especially if you use Wi-Fi instead of the cellular connection methods provided by EMnify. With cellular connectivity, you are completely disconnected from any local network, meaning there is no interaction with unsecured devices nearby.
Still, aspects of blockchain can add an extra layer of security, regardless of the connection methods you use. Because blockchain is decentralized, malicious third parties cannot simply hack a single server and destroy your data. In addition, any attempt to access data and make changes is documented immutably. And just because someone has physical access to a device, with blockchain it doesn’t mean they have access to any of its data or functionality.
5. Usage register for employee performance
Blockchain can also go beyond the technology of IoT sensors, tracking users’ actions as well. This can allow companies to see who, when and how the device is being used.
Just as the history of a device provides insight into its reliability, a user’s history can be used to evaluate its reliability and performance levels. This can help businesses reward employees for good work, analyze patterns and decision-making processes and improve the quality of production.
A collaborative future
These are just some of the ways in which IoT and blockchain can be used in cooperation to solve the trade challenges. As technology accelerates, blockchain IoT is an exciting and nascent growth area, which will affect the future of many industries in the coming years.
About the author: Knud Kegel is VP Product at EMnify, the global mobile provider of IoT communication platforms. He leads EMnify’s product team in transforming IoT connectivity into an easy-to-consume cloud resource. Prior to EMnify, Knud was SVP Marketing and Business Development at CoreMedia, an experience management software provider for global brands. Knud has over 10 years of management experience within the B2B SaaS industry.