blockchain iot

What is Blockchain IoT?

Estimated read time: 7 minutes

In this article, we will discuss what is blockchain IoT in detail. There are some challenges with the traditional IoT system and blockchain can help overcome them. How? Let’s see.

Blockchain IoT

The Internet of Things IoT networks allows for the creation of networks of sophisticated smart devices such as phones, smart cars, and smart home appliances.

The potential benefits of such networks with connected devices are too many to list here, but examples include everything from allowing homes to learn their occupant‘s behavior patterns so that they can increasingly automate chores such as reordering food, etc., to allowing smart cars to be ready and waiting outside your door to drive to you to work in the morning.

Read more about blockchain IoT usecases in our blog here.

Granted, these examples might be a little way off, but already a huge range of smart devices are available to consumers. There are roughly 46 billion smart devices of one type or another online in 2021. This figure is set to rise to around 125 billion by 2030, read this article for more statistics.

A key component of IoT is data. In order to operate, an IoT network must send and receive large amounts of sensitive data.

One such example is the security access data that is required for the August Smart Lock. This smart lock allows homeowners to unlock their homes just by using their phone, without the need for a key.

Naturally, homeowners need to be assured that no unauthorized person is going to be able to steal entry code data and gain access to their home. This means that the IoT network must be secure at all times.


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Not only that, data is often transferred between devices that have different administrators and data usage policies, thereby creating a challenging management environment that also requires close attention to data security.

According to an article published in eSecurity Planet, 48 Percent of U.S. Companies Using IoT Have Suffered Security Breaches.

This is a staggering figure, particularly when we consider that this includes some of the biggest and most secure company networks in the world. The figure emphasizes the need for a new approach to data security.

Blockchain has the potential to dramatically increase both the IoT security and level of automation of certain data transactions.

The technology allows for the creation of individual blocks of data in the form of a chain. As each new block is added to the last, it forms what is, in essence, a digital ledger containing all the information ever added to the blockchain.

Since the data on each new block is partly calculated from information held on the previous block in the blockchain, in order to alter a block, an unauthorized individual would have to change the information on all the blocks linked to it to prevent the change from being immediately noticed.

In the case of a cryptocurrency blockchain, for example, this may well mean having to change every single block on the chain.

The really exciting thing about blockchain technology is that it operates as a peer-to-peer decentralized network. As such a network, blockchains don’t require any controlling party to function. This has enormous implications for many of the business processes we all rely on today.

More than any other example, bitcoin has shown that it is possible to create blockchain-based solutions that allow us to circumnavigate powerful institutions, which until now have had a monopoly on these processes.

Another key factor in this decentralized approach is that all the peers or ’nodes‘ involved in the network must agree on whatever changes are to be made.

So, should a hacker or other unauthorized party attempt to make a change to the digital ledger without permission, the other nodes will resist this change and prevent the data from being altered.

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The only way it would be possible for someone to alter the blockchain would be to gain control over the majority of the nodes on the network at the same time in order to successfully complete the change.

When contemplating how difficult this would be just kept in mind that each node has its own unique access key code also.

Just to give you an idea of the enormity of the task, as of May 2016, Ethereum‘s network had 25,000 active nodes meaning that any attempt to alter data in this way would be next to impossible.

Key Characteristics of Blockchain:

  • Decentralized – No controlling power or point of failure.
  • Immutable – Ledgers can‘t be altered without the network agreeing to it.
  • Facilitates trustless transactions – Unalterable ledger can process data transactions to unknown parties with the minimum risk.
  • Distributed processing power – Decentralized nature means the network shares the load.

Advantages of Blockchain:

  • Increased trust
  • Removes the need for a controlling power
  • Better security
  • Complete records of all transactions

These key characteristics and advantages of blockchain technology help IoT companies efficiently manage the increasing IoT data from IoT sensors with reduced maintenance costs of IoT devices and also of data transfer.

Smart contracts on blcockhain networks can help automate transactions for IoT network. For example, a device will be able to make payments autonomously as soon as the conditions in the smart contracts are fulfilled.

Moreover, as it is not possible to overwrite existing data records with smart contracts, this ensures increased data integrity, security and transparency in blockchain IoT technologies.

The decentralized nature of blockchain technology protects IoT devices from security vulnerabilities as there is no centralized authority or single point of failure for interconnected IoT devices. The data exchange becomes efficient without the need for intermediate IoT gateway devices.

As blockchain maintains a distributed ledger, IoT data that is authenticated, authorized, and encrypted will be computed and stored on a number of devices that are part of the blockchain network.

Even if there is a network failure or cyber security risks, it will not affect the whole network. Blockchain IoT network will keep running even if some nodes are taken offline.

This is a huge advantage of blockchain IoT as in the traditional client/server model of IoT network, hackers would easily attack the central host devices through cyber attacks like distributed denial of service (DDoS attacks) and disrupt traffic through the whole IoT infrastructure.

The distributed security architecture of blockchain distributed ledger networks save IoT devices from such cyber attacks as in a peer-to-peer network, each node on a blockchain network is independently secured.

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Final Thoughts

Blockchain IoT is a new space and the technology is continuously evolving. Technology companies are looking for opportunities in blockchain IoT ecosystems. IBM blockchain platform now allows companies to use blockchain technology with cognitive IoT.

Scalability and storage are the main challenges in the widespread adoption of blockchain IoT. The distributed database nature of blockchain technology asks for a lot of data storage on each network node whereas IoT devices are often not capable of storing such huge data.

However, blockchain and IoT can have a huge impact by introducing regulations that ensure transparency and security on the internet infrastructure while meeting the security and scalability concerns.

If you, as a business CEO, are planning to invest in the emerging technologies of blockchain and IoT technology, you are likely to gain huge returns from this timely investment in blockchain IoT ecosystem.

cHowever, given that both are niche technologies, you will require a highly competent team of software developers who are skilled in IoT and blockchain infrastructure and technologies for implementing blockchain IoT.

If you do not find the required blockchain IoT skills in your development team, we would advise you to partner with a reputed software development company.

DevTeam.Space can help you here with its expert software developers community. You can partner with these software developers by filling out your initial blockchain IoT development requirements via this form. One of our technical managers will contact you to discuss further details.

Frequently Asked Questions on Blockchain IoT

1. Why is blockchain used in IoT?

Blockchain decentralized networks is used in internet of things networks to make them more secure, robust, and efficient. Blockchain technology also helps to reduce the overall costs of running IoT systems as compared to the centralized databases.

2. What is an example of a blockchain IoT solution?

Helium, a California-based startup is known as the first blockchain IoT solution that uses a blockchain network to connect routers and other low-power machines to the internet.

3. What is a blockchain?

Blockchain is a distributed ledger technology that stores data in blocks. Each data block on blockchain ledger is connected to the previous data block through hash functions and forms a chain. The blockchain database is decentralized meaning the data is stored on all the network nodes and there is no central authority.


Alexey Semeney

Founder of DevTeam.Space

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