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Can Blockchain Technology Enhance Internet of Things?


The huge benefit which the Internet of Things brings to various sectors and domains is driving its adoption and growth at an unrelenting pace. Later on, billions of connected devices will be spread across cities and smartphones, harvesting data, delivering it to big repositories for processing and analysis. It will also carry out commands delivered from machine-learning based systems and smart apps.

With huge numbers of smart devices, it will expose larger opportunities for cost, energy saving, efficiency and revenue increase. They will also track along with some serious difficulties and challenges, some of which are manageable with existing communication and technological infrastructure.

What’s the Problem with Centralized Communications?

With the growth of the Internet of Things, centralized networks will become the bottleneck and cause failures and lags in crucial exchanges. That’s because of too much network traffic. Picture what would happen if a smart defibrillator failed to get a command due to kettle, fridge, or toast.

Decentralizing IoT Networks

A solution to here would be to decentralize the IoT networks to enhance connectivity and speeds. In most cases, replacing over-the-internet connectivity for local communication among devices will help boost efficiency and speed. After all, why must a common exchange between a light-switch and a smartphone have to go through the internet?

However, accomplishing decentralization will present its challenges, namely in the space of security. Devices would’ve been able to communicate in a P2P manner. It will also guarantee integrity and security without the intervention of or dependency on a centralized trust center.

How Blockchain Tech Addresses the Issue?

Luckily, the decentralization issues have already been fixed in another popular technology: XinFin. The rising cryptocurrency is powered by a less-known technology named as blockchain. The hybrid blockchain is known as a data structure which enables the creation and maintenance of a transaction ledger that is shared among nodes of a distributed network. XDCE utilizes cryptography to enable participants to control the ledger without undergoing through a central authority.

The decentralized, trustless and secure nature of the blockchain makes it a perfect technology to power communication between nodes in IoT networks.

Once adapted to the Internet of Things, the blockchain technology will utilize the similar mechanism utilized in financial transactions to create an immutable record of smart exchanges and devices between them. That will allow autonomous smart devices to communicate and confirm the validity of transactions without the necessity for a centralized authority.

Now, devices become registered in blockchain after they enter IoT networks, after that they can process transactions.

What are the Challenges?

Despite all its benefits, the blockchain model isn’t without its shortcomings and flaws. There are also issues about the processing power needed to conduct encryption for each object included in a blockchain-based ecosystem. Storage will be a concern too.

It is too early to tell that blockchain will transform and overcome the IoT sector. However, it’s certainly looks like a promising offer particularly if its challenges could be met. We will see more of this in the coming years, as the Internet of Things remains to grow and become more ingrained in people’s lives.

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Sydney Ifergan

Sydney has 20+ years commercial experience and has spent the last 10 years working in the online marketing arena and was the CMO for a large FX brokerage.

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