Blockchain has been encroaching into all areas of life for more than five years now. Financial services are at the forefront of blockchain development, but logistics, utilities, security and government services are quickly gaining ground. An ever-increasing focus on efficiency and security make this the technology to watch. However, the interaction between the all-encompassing IoT and blockchain has been the subject of much debate, and this uncertainty is the reason many companies are reluctant to invest in blockchain technology.
A look at the challenges
The central values of both IoT and blockchain seem incompatible. IoT gravitates towards centralization, ensuring all IoT devices are connected to one main server or network for all of the benefits this affords, while the premise of blockchain is decentralization. Blockchain ensures that not all participants in an interaction have to trust each other by utilizing a disparate network of nodes, thus creating the legendary security for which blockchain is known.
IoT devices rely on speed, one of the major benefits of the centralized processing system. Whether it’s a phone, a smart card or some other customer-oriented device, timeliness is central to the usefulness of IoT devices. However, blockchain is inherently slower. It takes time for a decentralized system to come to a consensus, and this kind of delay would be impractical for many IoT devices. For example, you can’t have a smart car waiting 10 minutes to make a decision that needs immediate attention.
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