The Impact of Cryptocurrencies on the Internet of Things (IoT)
Innovative financing and business models for connected devices require a brand-new, Internet-scale value exchange infrastructure. That has also changed with a new kind of digital currency. Let’s talk about cryptocurrencies that are built on public peer-to-peer networks, cryptography, and mechanism design.
In just a few years, Bitcoin went from being a silly Internet currency to being a global currency. Can you believe it has a market capitalization of more than $10 billion? Bitcoin is constantly being improved by a worldwide community of developers, who are also developing new platforms based on blockchain technology. Machines are treated like first-class citizens on these platforms.
How the Internet of Things (IoT) Can Benefit from Blockchain Technology
Blockchain technology has already experienced a “trough of disillusionment” and a “peak of hype,” but it may be on the upswing once more. Blockchain is a digital ledger technology that makes it possible for businesses to conduct digital business in a secure way. These are a number of transactions across different computers that are connected in a peer-to-peer network.
How does Blockchain Technology Work With IoT?
Many experts have used surveillance cameras as IoT devices to show these properties and how they can help the Internet of Things (IoT) ecosystem.
Imagine that a hacker is ready to attack a prominent target. He stated that the hacker could first attack the server that runs the database that stores the videos in order to prevent the act from being recorded. As we know, blockchain is distributed, which is why data are replicated across multiple computers. Because of this, hacking becomes more difficult because there are now multiple target devices.
Let’s imagine this scenario: the hacker is known, and he or she claims in court that the video he or she took is fake evidence. Because blockchain technology is unchangeable that is why any modification to the stored data can be easily detected. As a result, the hacker’s claim can be confirmed by studying tries to alter the data.
When it comes to storing data from IoT devices, the decentralization aspect of blockchain technology can be a big problem. As decentralization means that the computers are storing data [in a distributed manner] that is not related to the actual owner and belong to different entities. There might be the slightest possibility that users’ sensitive data is now stored on devices that should not be stored. The second big problem would be that it can available to third parties by default if the system is not implemented appropriately.
Whereas blockchain in the IoT context is to store access logs and permissions. More specifically, big data storage is very expensive due to blockchain’s distributed and decentralization features. So, as an alternative blockchain technology could be used to store access logs and data in central storage.
The Advantages of Blockchain and IoT
Blockchain’s distributed ledger dismisses the need for trust between the parties involved. As a result, no single party can control the enormous amount of data generated by IoT devices. Blockchain encryption makes it unthinkable for anybody to overwrite existing information records for all intents and purposes. Additionally, by storing IoT data on the blockchain, hackers are prevented from gaining access to the network.
Protecting the information in the entire IoT ecosystem is a significant challenge for IoT players. IoT devices are easy targets for distributed denial-of-service attacks, data breaches, and hackers due to security flaws. Undoubtedly, IoT and blockchain are opening the door to new possibilities that include secured machine-to-machine transactions, inherently reducing inefficiencies, enhancing security, and improving transparency for all parties involved.
A physical asset can be tracked from the time raw materials are mined all the way through the supply chain to the final consumer thanks to the integration of these technologies. To become a part of the largest cryptosystems, sign up today at bitcoin pro.
