The benefits and challenges of using blockchain in IoT development

Credit: Shutterstock

Credit: Shutterstock

The huge benefit that the Internet of Things (IoT) brings to different industries and domains is driving its growth and adoption at an unrelenting pace. Soon billions of connected devices will be spread across smart homes and cities, harvesting data, sending it to huge repositories for analysis and processing, and carrying out commands sent from smart apps and machine-learning-based systems.

While larger numbers of smart devices will unlock bigger opportunities for efficiency, energy and cost saving and revenue increase, they’ll also trail along some serious challenges and difficulties, some which are notably not addressable with current technological and communication infrastructure.

What’s wrong with centralized communications?

As is, all IoT ecosystems depend on client/server communications, centralized trust brokers and protocols such as SSL/TLS or mechanisms such as the Public Key Infrastructure (PKI) to identify network nodes and control communications.

These technologies have proven their worth for communications between generic computing devices for years, and will continue to respond to the needs of small, closed IoT ecosystems, like smart homes. But with the growth of IoT, centralized networks will soon become the bottleneck and cause lags and failures in critical exchanges because of too much network traffic, to say nothing of the extra investment they’ll require in terms of hubs and communications hardware. Imagine what would happen if your smart defibrillator failed to receive a command because your dishwasher, toaster, fridge, kettle and lights are having a nice M2M chat and have clogged up the network.

Decentralizing IoT networks

A solution would be to decentralize IoT networks in order to improve speed and connectivity. In many cases, substituting over-the-internet connectivity for local communication between devices will help increase speed and efficiency. After all why should a command exchange between a smartphone and light-switch have to go through the internet?

However achieving decentralization will present its own set of challenges, namely in the realm of security. And we know that IoT security is much more than just about protecting sensitive data. How do you make ensure security in communications between devices?

Devices would have to be able to communicate in a peer-to-peer manner and ensure security and integrity without the intervention of or dependence on a centralized trust center. The proposed system would have to protect the network and ecosystem against device spoofing and man-in-the-middle (MittM) attacks and make sure each command and message that is exchanged between nodes in a network are coming from a trusted and authenticated source and received by the right recipient.

How blockchain addresses the problem

Fortunately, the decentralization problem has already been solved in another popular technology: Bitcoin. The famous cryptocurrency is powered by a less-known (but no less exciting) technology named blockchain. The blockchain is a data structure that allows the creation and maintenance of a transaction ledger which is shared among the nodes of a distributed network. Blockchain uses cryptography to allow participants to manipulate the ledger without going through a central authority.

The decentralized, secure and trustless nature of the blockchain make it an ideal technology to power communication among nodes in IoT networks. And it is already being embraced by some of the leading brands in enterprise IoT technologies. Samsung and IBM announced their blockchain-based IoT platform called ADEPT at the Consumer Electronics Show (CES) last year.

When adapted to IoT, the blockchain will use the same mechanism used in financial Bitcoin transactions to establish an immutable record of smart devices and exchanges between them. This will enable autonomous smart devices to directly communicate and verify the validity of transactions without the need for a centralized authority. Devices become registered in blockchains once they enter IoT networks, after which they can process transactions.

There are many use cases for blockchain-based communications. A paper published by IBM and Samsung describes how blockchain can enable a washing machine to become a “semi-autonomous device capable of managing its own consumables supply, performing self-service and maintenance, and even negotiating with other peer devices both in the home and outside to optimize its environment.”

Other IoT domains can benefit from blockchain technology. For instance, an irrigation system can leverage the blockchain to control the flow of water based on direct input it receives from sensors reporting the conditions of the crops. Oil platforms can similarly use the technology to enable communications between smart devices and adjust functionality based on weather conditions.

What are the challenges?

In spite of all its benefits, the blockchain model is not without its flaws and shortcomings. The Bitcoin crew itself is suffering from inner feuds over how to deal with scalability issues pertaining to the Blockchain, which are casting a shadow over the future of the cryptocurrency.

There are also concerns about the processing power required to perform encryption for all the objects involved in a blockchain-based ecosystem. IoT ecosystems are very diverse. In contrast to generic computing networks, IoT networks are comprised of devices that have very different computing capabilities, and not all of them will be capable to run the same encryption algorithms at the desired speed.

Storage too will be a hurdle. Blockchain eliminates the need for a central server to store transactions and device IDs, but the ledger has to be stored on the nodes themselves. And the ledger will increase in size as time passes. That is beyond the capabilities of a wide range of smart devices such as sensors, which have very low storage capacity.

Other challenges are involved, including how the combination of IoT and blockchain technology will affect the marketing and sales efforts of manufacturers.

It’s still too early to say that blockchain will revolutionize and conquer the IoT industry. But it sure looks like a promising offer especially if its challenges can be met. We’ll see more of this in the coming months and years, as IoT continues to grow and become more and more ingrained in our lives.

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2 comments on “The benefits and challenges of using blockchain in IoT development

  1. […] cannot be met with the current models that are supporting IoT communications, tech firms and researchers are hoping to deal with them through blockchain, the technology that constitutes the backbone of the famous […]

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  2. […] there is now a general inclination to use blockchain in other fields, including IoT, the supply chain, stock exchange, gaming and other domains where secure data transactions are […]

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