A Blockchain is a decentralized, distributed and public digital ledger that is used to record transaction across many computers so that any involved record cannot be altered retroactively, without the alteration of all subsequent blocks. This allows the participants to verify and audit transactions independently and relatively inexpensively.

 

Major Portions of the financial industry are implementing distributed ledgers for use in banking. Banks are interested in this technology because it has potential to speed up back office settlement system. The sharing economy and IoT are also set to benefit from blockchains because they involve many collaborating peers and with more automated resource optimization and innate security by providing:

 

• A distributed system of record for sharing data across a network     of key stakeholders.

• Embedded business terms for automating interactions between       nodes in the system.

• Hash-based security, verification of identity and provenance               authentication.

• Consensus and agreement models for detecting bad actors and       mitigating threats.

 

With such features, a blockchain-enabled IoT deployment could improve overall system health and integrity by allowing devices to register and validate themselves against the network. Business logic could execute automatically via smart contracts. And with no central system to attack, threats like denial of service attacks could be inherently deterred at different layers in the architecture.

 

But as businesses continue to grapple with core IoT complexity and security problems, it is becoming obvious that blockchain-based solutions have merit and bring real value to the table. Blockchain is not the answer to everything that ails IoT, but it can play a powerful role in solving some serious issues. It won’t save IoT, but it might just improve it.