IoT represents the next major business opportunity across a wide range of industries, from car manufacturing to home construction to shipping. At its core, IoT allows sensors on any object to communicate with another object wirelessly to share data which can be aggregated, analysed, and responded to. For instance, a device may report energy usage in a home which is then immediately charged to the customer, or a shipping container may report its internal temperature so the recipient knows its products are kept in the right conditions during transit.
While the features of IoT offer end users new conveniences, it is paramount that the data generated by IoT is secure, reliable, and cost effective in order for users to be willing to pay for these IoT services. This is essential if the data is used to monitor contractually agreed terms between multiple parties. For instance, if the temperature in a shipping container goes beyond the contractually stipulated boundaries, then the sender needs to know where this happened and in whose custody the container was at the time the contract was breached so that they can assign responsibility. All parties need to be confident that the data is reliable and is not tampered with in order to settle the breach of contract.
How can IoT transactions be made reliable, secure, and cost effective to promote adoption by enterprises?
With the ability to provide a reliable and secure ledger of record, reduce costs and speed up settlement times, Blockchain technology is a well-suited solution to support the adoption of IoT by enterprises.
Blockchain is a distributed digital platform that records the sequence and details of events as they happen. As blockchain technology requires multi-party validation before data is placed in the blockchain, it creates a reliable ledger that all parties can trust is accurate.Therefore, deploying it for IoT transaction monitoring will save companies cost and time compared to large scale IT implementations and remove the need for third parties to monitor transactions. Taking the example above, once the temperature in a container breaches the contractually agreed specifications, the details are validated by the blockchain’s multi-party validation process and then stored on the blockchain as a non-disputable record with all the details of the breach.
To date, blockchain technology has proven unhackable. This is largely due to the multi-party validation functionality, which relies on a highly secure cypher system that requires multiple parties to validate a new data record before it is added to the ledger. This security layer means all parties can trust that the records provided by the IoT monitoring system are tamper-proof.
Blockchain allows for a “smart contract” ability which automatically recognizes when a contract has been fulfilled or breached and can then initiate the corresponding action. Continuing on the shipping example, this smart contract could immediately initiate the payment to compensate the client from the logistic company’s accounts.
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