How Blockchain Can Revolutionize IoT?

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A Blockchain is a distributed, immutable, and cryptographically secured ledger owned by everyone in the network. Blockchain owes its name to the way it stores transaction data – in blocks, which are linked together through a chain. All these blocks in Blockchain have their unique hash for identification, are of limited size, and linked together by pointing to their previous block. In simple words, Blockchain, the technology behind Bitcoin, is an open database to create and store data in a secure way.

The major advantage that Blockchain bring is that it is public. Every participant in the network can see the data blocks and information stored in it. But this does not mean everyone can see the actual content, as each block is protected by a private key. Another big advantage is security. The database can only be expended and previous records cannot be altered. In addition, when someone wants to tamper the data, they cannot do it without the consensus of all the participants.

Blockchain technology is the missing link to secured communication in IoT. By adding Blockchain, we can have a secured mesh network that will allow IoT devices to interconnect reliably and avoid the threats that are prevalent in central server models. This decentralized approach would eliminate the single point of failure, creating a more resilient ecosystem for devices to run on. The cryptographic algorithm in Blockchain would make data more private.

Fremantle believes blockchain technology can be used to enhance security, privacy, and the manageability of IoT devices. “Blockchains create a shared governance,” he is quoted as saying in the press release. “They produce an environment for IoT networks where there can be trust, anonymity, and effective contracts between parties without any single vendor being in charge, and without requiring any party to be trusted above another.”

Blockchain, and the combination of cryptographic processes behind it, offers an intriguing alternative. Because blockchain is built for decentralized control, a security scheme based on it should be more scalable than a traditional one. And blockchain’s strong protections against data tampering would help prevent a rogue device from disrupting a home, factory or transportation system by relaying misleading information.

IoT is all about data collection and monitoring of devices. With a digital ecosystem consisting of billions of devices, which are connected with each other, they will tend to make smart decisions without any human involvement. On the other hand, blockchain provides a robust infrastructure to support machine-to-machine (M2M) communication. Now it would be interesting to note how both of these technologies come together and what is it that they’ve got to offer. So here’s an example – sensor hardware in an automobiles, when used in conjunction with blockchain mechanism, can deliver real time information regarding the automobile’s performance. This information could then be used by, say an insurer, to adjust premiums for this vehicle accordingly. The impact could be summarized within these three facets:


As more and more devices get connected with each other, the protection of privacy is becoming a major concern. Consumers demand privacy that shouldn’t leave them vulnerable to a data breach in any form and at any time.

What makes privacy for IoT an extremely sensitive issue is the fact that its consumers surrender their personal information to it, bit by bit, without even realizing. This mostly happens because they are unaware of what data is being collected and how it is being used.

Blockchain helps overcome issues around privacy with the use of cryptographic public and private key pairs  that are unreadable by humans. This ensures that an outsider cannot compromise the confidential information shared by a device holder, on a network of devices.


IoT networks are vulnerable to Denial of Service (DoS/DDoS) attacks where servers are targeted and are brought down with traffic inundation. This has a negative impact upon the IoT ecosystem, especially when sensitive issues are being handled. Moreover, in industrial settings, such as large farms, it’s difficult to establish centralized networks. This is because it is not easy to expand IoT nodes over such huge land masses with sparse connectivity gear.

Blockchain technology will help create safe mesh networks, allowing IoT networks to interconnect with each other in an authentic way; thus, circumventing threats such as device spoofing and impersonation.


Complex systems, like the ones made of IoT, may fail under a number of circumstances. For example, you and your spouse receive a message from a smart device in your kitchen that the eggs at home are over. So both of you end up buying eggs. This means spending twice the amount and having twice the amount required.

Blockchain will help IoT devices to communicate and authenticate with each other, without the need of any third-party verification, thereby reducing complexity involved in the network.

Blockchain, being an amalgamation of such wide-ranging possibilities, has the potential to enhance the quality of service-delivery. It does this by promising high security, integrity, and confidentiality of data. With its transparent and secure operations, blockchain appears poised to revolutionize IoT.

Their proposal uses an existing concept in blockchain technology called an oracle. “An oracle is a system that reports on the world to the blockchain in a reliable fashion,” explain Fremantle, Aziz, and Kirkham. “For example, a smart contract may require payment when a certain condition is met, and the oracle is used to report to the blockchain when that condition exists.”

The researchers want to change how an oracle works. “We propose that the IoT and blockchain industries require the exact opposite—a trusted intermediary that reports on the state of the blockchain on behalf of the IoT device,” the three state in their paper. “Such an entity, which we call a Pythia, could interact with the blockchain on behalf of IoT devices and do so in a trusted fashion. Therefore, it would act both as an oracle to the device, as well as an oracle to the blockchain.”

The problem of IoT security needs solving because data flowing from sensors and embedded processors can change the way urban planners lay out hospitals and bus stops.

But blockchain isn’t a slam dunk. Bitcoin presents a simpler problem to solve than IoT security. With bitcoin, blockchain simply moves wallets of currency from one anonymous owner to another. Full-fledged device authentication, security and control layers are more complex.

Our current blockchain model works by tracking all cryptocurrency transactions using a distributed ledger technology, or DLT. This is a common technology among commercial software, but its use in the blockchain revolves around verifying and confirming transactions for validity.

Although it’s currently used as a digital ledger of sorts, the blockchain can be programmed to utilize virtually any electronic document or data. The result is a concrete record that cannot be modified or altered.

However, the blockchain takes security one step further by eliminating the possibility of fraudulent transactions and verifications. Since the digital ledger is available for everyone to see, the data contained within is ultimately policed by the whole blockchain community. This has worked well on the relatively small scale of Bitcoin and digital currencies, and it should translate well to the larger and more dynamic scale of the IoT.

Blockchain is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. The ledger itself can also be programmed to trigger transactions automatically. With blockchain, data can be embedded in digital code and stored securely in transparent, shared databases, according to

Blockchain provides assurances that data is legitimate. Because blockchain is built for decentralized control, a security scheme based on it should be more scalable than a traditional one. And blockchain’s strong protections against data tampering would help prevent a rogue device from disrupting a home, factory or transportation system by relaying misleading information.

The proposed framework includes layers of access that can keep out unauthorized devices or cut bad actors (such as a hacked device) from the network.

MeenaG Staff

Internet of Things Enthusiast

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