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How Blockchain is Making IoT Smarter

April 26, 2022

Blockchain technology is critical in revolutionizing IoT security and performance. It could pave the way to a better data encrypted system.

IoT applications have increased tremendously, and so have those for blockchain. The universal trust for blockchain is rising, and IoT is considering the option of adopting it to secure communication between devices.

Its ability to duplicate transactions and disperse them across networks of nodes does the trick.

A significant problem that could affect the relationship between IoT and blockchain is the different platforms that the two rely on. IoT uses centralized systems while blockchain embraces decentralized platforms.

This article explains the integration of blockchain technology into IoT. It will discuss how blockchain solves IoT shortcomings.

How blockchain solves IoT security and scalability challenges

IoT’s security

As more connected devices go online, fundamental security risks have risen exponentially. This is due to the lack of standards that regulate interactions. Blockchain seeks to solve these security challenges by implementing a tamper-proof framework. The kind of encryption it utilizes makes it hard for another user to modify or delete existing records.

The transactions conducted using blockchain are verifiable. Thus, only transactions coming from trusted parties are transmitted successfully. Blockchain improves data security by adding an encryption layer that blocks malicious cyber threats from accessing the IoT data.

Blockchain has other mechanisms that make its integration into the Internet of Things a major step towards enhanced data security. It embraces decentralized data control and the proof of work concept.

Decentralized management of IoT data means that no single entity or user can control the massive amount of data generated and transferred using IoT devices. This makes the data transmission process more transparent and also challenging for hackers to target an organization’s data.

The proof of work (PoW) concept means that an authentication process verifies data eligibility after every transaction in the network. This process aims to avoid counterfeits created through duplication. Once a transaction undergoes this process, it remains in the system undeletable and unmodifiable. Thus, eliminating the risk of losing records.

Scalability challenges

IoT experiences several scalability challenges owing to various reasons, such as:

  • Low processing power and storage: Several IoT devices, like smart sensors, have small processing and storage units that cannot support running security protocols such as Transport Layer Security (TLS) and Security Socket Layer (SSL).

  • Lengthy sessions: Many security solutions rely on having a shared encryption key that remains valid during the entire duration of that session. In this case, long-running sessions become problematic, as is the case for IoT devices. Hackers can wiretap the line and track the communication patterns to discern shared information.

Blockchain solves scalability issues by allowing for the fast processing of transactions between IoT devices. Even as more IoT devices join the network, the blockchain always finds ways of incorporating them without compromising the processing speed of the requested transactions.

Also, blockchain attends to the scalability issue using sharding. This solution achieves scalability by subdividing the network into smaller easy-to-manage parts called shards.

It then runs these parts parallel to each other. Each shard handles a specific portion of data. Thus, the processing output increases considerably in the network. Sharding is a form of horizontal scaling, and it gives blockchain the capability to have near-limitless scalability.

How blockchain complements IoT

Combining IoT with blockchain improves the performance and data security of devices connected to the internet. One goal of integrating these two technologies is to enhance the tracking and recording of all transactions in a network and any accompanying changes.

In particular, blockchain complements the Internet of Things by:

  • Enhancing security: Blockchain technology provides a data security solution by implementing data verification methods in a network. IoT devices receive data from billions of other nodes on the network. But because of blockchain, they are not impacted by malicious programs.

Blockchain can identify and remove data from questionable sources. It concomitantly encrypts information from verifiable and trusted devices.

Blockchain’s features allow it to maintain high transparency. A user can determine who has access to specific data in the network. Besides, blockchain adds a security layer that prevents any user from overwriting existing data in a network.

  • Reducing costs: Automating transaction validation and processing enables an entire IoT system to function cost-effectively without sacrificing efficiency.

  • Increasing the speed of transactions: Blockchain acts as a shared ledger for supply chain transactions involving multiple producers, suppliers, distributors, and consumers. Thus, parties can exchange data directly without manual procedures.

Use cases of blockchain and IoT

Blockchain and IoT have many real-life applications including the following:

Tracking vaccines

Blockchain’s ability to record transactions for all the involved parties in a supply chain network at each stage made it crucial for vaccine shipment. This solution prevents the distribution of counterfeit doses in the pharmaceutical supply chain. Pairing blockchain with IoT enhances the tracking of these vaccines during pandemics such as COVID-19.

For instance, if a driver transporting the vaccines stops on the way and exchanges them for something else, it could become challenging to track this if it weren’t for IoT.

IoT installed sensors in trucks detect when the vehicle stops and the stoppage point. Blockchain and IoT, therefore, ensure that the original vaccines reach the intended location. Successful applications of blockchain and IoT have occurred in British Hospitals. These technologies have helped track the transportation of the stored COVID-19 vaccines.

IoT-based self-driving cars

As blockchain matures and the demand for autonomous vehicles increases, the possibility of using this technology to control data movement is becoming a reality. Blockchain can secure shared information relating to vehicle identification, warranties, possession, wear, tear, etc.

Through blockchain implementation, communication between self-driving vehicles would become more effective. The technology can assess nearby drivers’ behavior using smart sensors fitted in the vehicles. The collected data enhance risk assessment and ensures vehicles calculate the right traffic decisions when self-driving to prevent accidents.

Besides, using blockchain’s decentralized system, autonomous cars can access traffic data more accurately, helping drivers make intelligent driving decisions.

More importantly, blockchain can solve the data security challenge that comes with autonomous cars that rely on online traffic data for navigation. There is always a risk of malicious attacks impairing driving functions, potentially causing road accidents. But since blockchain’s security is almost impenetrable, it could help revolutionize the safety of driverless cars for the better.

Challenges of integrating blockchain technology with IoT

Integrating blockchain with IoT has its challenges. The following are examples of such drawbacks:

Diminishing storage capacity and scalability

The blockchain is growing at a rate of one megabyte for every 10 minutes in Bitcoin. The rate keeps increasing, and there is concern that this will become unsustainable in the long run. Besides, an oversized chain could have negative implications on the blockchain performance, such as an increased synchronization time for users.

Loss of data privacy

While blockchain ensures data security, it does not entirely guarantee its privacy. One of blockchain’s key features is its decentralized system that embraces transparency at all its stages.

This means that users can see and track each transaction happening in the system. This builds trust between users but has a knock-on effect on privacy because an entity loses its anonymity.

Blockchain lacks a central authority because of its decentralized system. And this is one of the things that make it an attractive venture for its users.

However, many governments oppose its institution, fearing that an uncontrolled transaction system could create high volatility risks. So, some nations have set laws that regulate the use of blockchain technology, thus, creating uncertainty about its global implementation.


Electronic gadgets in every home and organization transmit massive amounts of data online. With increased IoT device connections also comes the threat of data security.

Blockchain implementation in tandem with IoT is now crucial in safeguarding data. Blockchain’s decentralized system verifies data transmitted throughout the chain to ensure no malicious attack can reach the IoT devices.

Blockchain’s capabilities made it crucial in monitoring the COVID-19 vaccine distribution. Autonomous car manufacturing companies are also considering using the technology to make their driverless cars threat-proof.

Nevertheless, blockchain faces fierce contention from several governments that feel the system could disorient the typical financial systems of their nations.

Further reading

Peer Review Contributions by: Onesmus Mbaabu