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Blockchain and The Future of Internet of Things
Blockchain and The Future of Internet of Things

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The Internet of Things refers to a network of physical objects, connected using a combination of sensors, software, and other technologies, for the purpose of exchanging data with other devices and systems over a network. If you are new to this technology, have a look at the blog “IOT IS THE NEW IT” FOR ENTERPRISE LANDSCAPES IN INDUSTRY 4.0 ERA on our website that covers this area in depth.

The global Internet of Things landscape continues to witness a continuous flow of investments into it. While technology providers can be seen spending on R&D and increasing the reach of their IoT solutions into both existing and new markets, technology buyers are leveraging the advancements in technology and its declining cost to drive their business growth. According to Microsoft, the average price of an IoT sensor stood at $1.30 in 2004, and it reached $0.38 in 2020 – registering a decline of over 70%. The technology is not only penetrating deeper into existing use cases, but is also making its way into various new application areas across industries. However, persisting challenges pertaining to security have been limiting the uptake of IoT across some industries.

 



Source: McKinsey

Clearly, the total addressable market for cybersecurity in IoT/OT space is huge, but a large part of this TAM remains untapped. One of the biggest challenges for the companies is to develop and/or deploy a solution that can address issues arising from lack of encryption and transparency across the network.

 

Can Blockchain Address These Issues?

Blockchain is a distributed database that maintains a growing list of records, called blocks, and links them using cryptography. Since the distributed ledgers in a blockchain system are tamper-proof, the need for trust among the parties involved gets eliminated. No single entity can exercise control over the vast volume of data across IoT devices. Robust encryption in a blockchain system can make it extremely difficult for anyone to break into the network and overwrite existing records. Moreover, authorized users in a blockchain system can always access the network and check the past transactions for any data leakages and sources thereof. Hence, from a technical perspective, blockchain can be a solution to one of the pressing challenges in the IoT space – Security.

 

Following are some of the examples where blockchain technology is being leveraged to improve the security of IoT solutions:

  • Xage Security: Xage is a security platform for IoT running on blockchain. Currently being used for applications across industries like agriculture, energy, transportation and utilities, Xage makes IoT devices tamper-proof, and facilitates access to secure lines of communication between nodes.
  • Atonomi: Running on blockchain, Atonomi offers security to devices on an IoT network. The solution allows validation of device identity on an immutable ledger, detection of device anomalies through reputation tracking, and secure transactions between connected devices regardless of their manufacturer.
  • SmartAxiom: SmartAxiom secures IoT-connected devices using blockchain by facilitating keyless, peer-based authentication. The solution offers protection against various types of cyber-attacks including unauthorized access to IoT devices.

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Dhiraj Sharma
Principal Analyst

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