Blockchain and IoT Combined: Understanding the BenefitsAugust 3, 2018
The Internet of Things (IoT) ecosystem works perfectly along with blockchain technology. IoT is based on a centralized model that is known as “client model” in business terms. It has opened up a gateway to communicating physical objects along with the world of internet. It’s done by being able to run them from any location. Such devices work on cloud servers that hold unlimited storage capacity. Internet of Things authenticates and identifies devices.
Blockchain together with IoT assists in reestablishing the whole digital infrastructure. It makes the internet a place where financial transactions can occur easily. Using blockchain with IoT assists to connect devices in a faster and better way with the best level of security. Further, blockchain technology is utilized in almost every organization to meet business requirements which help establish better infrastructure.
For example, Walmart utilizes blockchain technology to boost accuracy and efficiency in the workflow.
How Does IoT Works with the Blockchain Technology Model?
You’re already aware that blockchain has decentralized systems that can store unlimited records for any financial transactions. Being decentralized denotes there’s one who can access the whole financial information.
When it comes to blockchain technology, different computers hold the permitted network of information saved in blocks. Such blocks consist of nodes that keep the information saved in chronological order. Blockchain and IoT are considered a deadly combination where one can connect securely with physical devices without worrying about a breach.
No Alteration of Records
After the data has been entered in the blockchain, it can’t be deleted. Even changing the data is not possible because it’s connected to all pre-transactions made before them. Further, the database stays permanent as the algorithms are made such a way.
With the help of nodes, the communication takes place between peer-to-peer only. After the node has full of data storage, the information is stored in the following node automatically.
Utilizes all Logic
Blockchain has a digital nature that enters only logical algorithms. Computational logic assists in creating automatic rules to financial transactions between any nodes.
Each transaction has a transaction. It’s visible to anyone who’s allowed to know that transaction. Blockchain technology offers a private and public key that is in alphanumeric form, serving as a proof of individual identity. This transaction takes place between blockchain address to remain it as transparent as possible.
For instance, XDC (XinFin) hybrid blockchain is made upon the paradigm of consortium blockchains. Its architecture differs from traditional public and private blockchains. The XDC blockchain deals with the system state instead of blocks of transactions.
The XDC ecosystems will offer easily accessible light wallets which will connect safely to full nodes. Every light wallet will have unique keys which are utilized to sign transactions from their respective account. Since the light wallet is a standalone application, the possibility of losing the tokens or being hacked is unlikely.
Using blockchain technology with IoT can help in bringing enhanced security to online issues which we encounter during a transaction.