IEEE Network: When Internet of Things Meets Blockchain: Challenges in Distributed Consensus

Article Synopsis :

The internet of things (IoT) is here and is disrupting now. It is seen as one of the most disruptive technologies of the century, offering individuals functionality long dreamt of, or viewed as simply science fiction.

Blockchain may be the answer to expanding IoT networks

Some stumbling blocks remain

The possibilities have thrown up new business models, products and services, and as a source of ideas – not all of them positive, including:

Trust: IoT cloud servers are closed systems and service providers could illegally control IoT devices. Being closed systems, it is hard to build trust between different IoT business agencies.

Security: the centralised environment of IoT data centres makes them vulnerable to hackers.

Overheads: this centralised model comes with high maintenance costs and updating millions of IoT devices takes time.

Scalability: centralised models are not easily scalable. It will, therefore, fail to connect IoTs on a mass scale, leading to delays and defeating the object of having IoT devices in the first place.

And the answer is…

Many proofs of concept have hailed blockchain as the key to unlock the nightmare data scenario of huge centralised data processes, such as in the medical arena.

This paper looks at how blockchain could be used to alleviate some of these limitations. After all, Bitcoin managed to operate a decentralised network for almost a decade without any serious security incidents.

The consensus mechanism offers an advantage as the whole network ensures the data is not compromised.

The use of blockchain could make IoT ecosystems smarter and more efficient and a report from International Data Corporation says that a fifth of all IoT deployments will have basic levels of blockchain-enabled services by the end of this year.

Advantages of Blockchain for IoT

Decentralising the systems with blockchain will greatly reduce the probability of a single point of failure.

IoT security will be strengthened through the use of the consensus mechanism and encryption algorithm contained within blockchain.

Smart contact would allow IoT devices to trade and execute actions autonomously.

And a public distributed ledger where all users can audit the stored data will create a platform that will allow collaboration and cooperation based upon trust.

The paper goes into some depth about the various benefits and drawbacks that may present themselves. However, there is clearly an opportunity for blockchain to prove its worth in another section of the insurtech value chain.

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