Building more robust security for the growing Internet of Things (IoT) has been a focal point for many over the past few years. Might blockchain, the distributed ledger technology for overseeing transactions across a network over time, be an ideal solution?
Recent research indicates that a lot of organizations are indeed relying on blockchain to help secure their IoT environments.
A late 2019 report from research firm Gartner noted that blockchain adoption combined with IoT adoption is “booming” in the U.S. The firm’s IoT implementation trends study is based on an online survey of more than 500 U.S. based IoT decision makers conducted in May and June 2019. It showed that three quarters of organizations that have adopted IoT technology have already adopted blockchain and are combining it with their IoT networks or are planning to by the end of 2020.
“The integration of IoT and blockchain networks is a sweet spot for digital transformation and innovation,” said Avivah Litan, distinguished vice president at Gartner. “It is actually moving ahead at a much faster pace than expected, according to the survey.”
Among the blockchain adopters in the survey, 86% are implementing the two technologies together in various projects. These results are significant, Litan noted. And they emphasize that although both blockchain and IoT technologies are still in the early stages of adoption—coupled with the fact that blockchain technology is still immature itself—enterprises have started combining them to drive favorable business outcomes.
Of the survey respondents who are implementing blockchain technology in conjunction with IoT, nearly two thirds said increased security and trust is either the primary or secondary driver for implementation. More than half of the respondents said the top benefit is an increase in business efficiency and a decreased costs.
As enterprises implement IoT projects, many of them focus their efforts on creating more security, trust, and transparency around the management or movement of physical things, so that they can improve situational awareness and enhance efficiencies, Litan said.
The report said through 2024 more than 80% of implementers will have to upgrade their combined IoT and blockchain technologies at least once or twice to address technical challenges such as scalability, security, and reliability.
Blockchain adoption is significantly impacting every industry that manages connected IoT components, the report said. Organizations that are relatively more mature in adopting IoT are seen to be way ahead in their implementation of blockchain technology.
The highest rate of blockchain adoption among IoT implementers includes companies in pharmaceuticals, energy, natural resources, utilities, and transportation. These industries all have business models that include the movement of physical goods, so they benefit from links that bridge the physical to the digital world, especially those enabled by a combination of blockchain and IoT technologies, Litan noted.
The lowest rate of adoption of blockchain and IoT is in the financial services sector. The report attributed this to the fact that financial services firms deal primarily with virtual goods and services rather than physical things that are tracked by IoT networks.
In the long term, Gartner expects the combination of IoT and blockchain to enable innovative devices and business models. But the necessary evolution in both blockchain and IoT will take five to 10 years to achieve maturity.
The program operated by the Institute of Electrical and Electronics Engineers (IEEE), a professional association for electronic engineering and electrical engineering, has noted that blockchain offers an intriguing solution for IoT security.
“Blockchain contains strong protections against data tampering, locking access to Internet of Things devices, and allowing compromised devices in an IoT network to be shut down,” the group said.
If there is to be effective blockchain IoT security, however, certain issues need to be overcome, the program said. For one thing, blockchain mining—the process of adding transaction records to a bitcoin blockchain—requires a large amount of processing power, and many IoT devices lack the power needed.
“Current blockchains are vulnerable if a group of miners [people who perform the process of blockchain mining] controls more than 50% of the network’s mining hashrate,” the program said. Hashrate is the speed at which a computer completes an operation in the Bitcoin code.
The global distribution of nodes in a typical blockchain makes this highly difficult, IEEE Continuing and Professional Education said. But a home IoT blockchain’s processing power might be more easily hacked. IoT security will continue to evolve as regulations related to their development and use continue moving forward, it said, and the possibility of a blockchain IoT security system is something that may hold great potential.