Security has been the most critical issue when dealing with the development of the Internet of Things. The potential of IoT is huge and with ideas like smart cities, homes, devices etc gaining popularity, the need for a strong security system is vital.
With a huge number of devices being connected to the internet, the server gets overloaded and even a small failure might make the entire system vulnerable to cyber attack. Having huge benefits, as long as security is concerned, Blockchain stands out as the solution.
A blockchain, originally block chain, is a growing list of records, called blocks, that are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. By design, a blockchain is resistant to modification of the data.
In a nutshell, the top three benefits of using the Blockchain technology for IoT can be summed up as:
- It helps build trust among the two or more parties.
- It reduces the cost of infrastructure.
- It helps to accelerate transaction.
Other advantages include:
- Leveraging the Blockchain for IoT data helps to automate various business process without the need of setting up complex and expensive centralized IT infrastructure.
- The blockchain can act as the missing link that enables peer-to-peer contractual behavior without a third party to certify the transaction.
- The transaction between two IoT devices can be easy and secure with a reliable time-stamped contractual handshake between the two parties.
- IoT data and blockchain technology can help in initiating intelligent automated insurance policy applications.