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IOT and Applications for Blockchain

More and more things can be connected to the internet these days.

The screeching electronic noises of dial-up connections are long a thing of the past. The share of high-speed fibre remains on the rise; in OECD countries, this market share is at 25%, from 12% just eight years ago. This is not even across individual countries – countries have individual fibre penetration rates from anywhere above 70% fibre to under 10%. The older DSL connection is currently still prevalent but is quickly being replaced by faster fibre connections.

Appliances such as lights, refrigerators and air-conditioning units are all getting internet connectivity, allowing you to toggle them with your smartphone. Or even your voice, if you have something like Google Assistant or Amazon’s Alexa. It is expected that more than 4 billion IoT devices will exist worldwide by 2025; about 63% of these devices will be consumer electronics.

Indeed, the fantasies that society had at the beginning of the Internet are slowly becoming reality. IOT has also seen increasing use in industrial settings, chiefly for automation. In a survey by Tech Pro Research, more than half of respondents (59%) use data gathered from IoT devices for maintenance. Other uses included shop floor/warehouse management, sales, marketing, accounting, and C-Suite. Only 18% expressed that they had no interest in IOT at that time.

IOT’s current reliance on trust

 IoT has long had a troubled relationship with security. Many of these devices are shipping with a default password and no way to change them. We suspect that the typical end user doesn’t think of changing it as well, compounding the problem. Software flaws are another problem, which are less easily patched on many devices – and every flaw is a potential security hole.

The Mirai Botnet in 2016 exploited the very weaknesses of IoT devices to amass an enormous army of routers, cameras, thermostats, and more. Combined, these compromised devices flooded services and sites like Spotify and BBC with a deluge of traffic, causing them to slow down or even go offline. One DNS provider was hit with 1.1 terabytes of traffic volume.

Industrial settings are where things can get dangerous. One particularly nasty malware known as Stuxnet managed to infiltrate an Iranian nuclear facility by entering through infected components from the vendors that that Iran’s nuclear program used. Once it was inside, it sought out computers that controlled machines used to enrich uranium, known as centrifuges. Stuxnet would instruct the centrifuges to spin in erratic patterns until they failed. Over a few years the virus broke 20% of the centrifuges before Iran’s scientists caught on.

In light of greater adoption of IoT, it is not surprising then that increasing focus has been shed on improving the security of IOT devices. A single compromised device is able to take to compromise an entire network. In industrial settings like the one described above, we are looking at the potential of property damage and even physical harm. This problem is set to increase as our “dumb” devices become increasingly smarter.

Blockchain’s role in IOT Security

Blockchain appears to be a potential solution for the security woes of IOT today. Traditional systems operate centrally, which poses security and scalability concerns as more devices join the “cloud”. Adding third-party verification as a solution to security additionally slows data flow down and drives costs up.

On a blockchain, information is shared across a decentralized, cryptographically secured network. The verification process can be automated with smart contracts executed upon meeting specific requirements. Owning to the nature of blockchain itself, compromising the network becomes absurdly difficult. It also removes the potential of a single point of failure – such as of the “cloud” – from turning all connected devices into expensive paperweights.

The proverbial chain however, is only as strong as its weakest link. IOT devices themselves have been notorious for their security weaknesses. These flaws need to be patched – both as a cybersecurity best practice, and potentially for the integrity of the blockchain itself.


Numerous potential uses can come from integrating IoT with the blockchain, beyond just incremental security features. One potential use case is in supply chain management. We previously described how a blockchain layer could allow anyone to trace the source of their food with a high degree of confidence. IoT can supplement this supply chain, guiding it towards further automation and accountability. Through the use of data from sensors that record its growing environment and other details, consumers and regulators alike are able to navigate convoluted supply chains much better.

The paper Internet of Things, Blockchain and Shared Economy Applications by Steve Huckle and others outlines more potential ways the everyday user can benefit, in areas like travel, payments, and even the ownership of intellectual property.

Indeed, it appears that the gears have fallen into place. What we need now are ways to turn them in the way we desire, one that can change the world. One that goes beyond using IoT and blockchain for the sake of it; one that changes the world we live in.

What’s your idea for the future?