Here is a little fun to ponder: Is it acceptable for companies to monitor us all the time and share our personal data with third parties in the name of the Internet of Things? Are our own creations going to make us more vulnerable to data breaches and security risks?

A lot of security experts and news resources have raised concerns about the security threats posed by the Internet of Things (IoT) devices—that is, unless we figure out how to protect IoT data.

Luckily, for people feeling uncomfortable with sharing personal data through IoT devices, driven institutions and organizations are coming together to make sure that Internet of Things is appropriated in a meaningful way using blockchain technology.

Blockchain—the distributed ledger technology that was originally devised for Bitcoin, is now being adopted for use in internet-connected devices—from data management to security and device authentication.

What is blockchain technology?

A blockchain is a secure decentralized digital ledger of transactions devised to record financial transactions and any other thing of value. Transactions carried out on the blockchain are secure and generally, incorruptible once confirmed.

With blockchain, there’s no need for a third party like data vendors, or interference by a central authority. Thus, it establishes trust, accountability, and transparency while streamlining business operations.

How blockchain works

The blockchain is a public electronic ledger that has two main features; it can be shared openly among members of the network; and it creates incorruptible records of these members’ transactions, continually reconciled and linked to the previous ones.

When members exchange items of value via the blockchain, data about each transaction is recorded in a thread called block (hence the name), and the records are truly public and easily verifiable. Each block is linked to a specific member and hosted by millions of computers simultaneously, which each member possesses.

Because no centralized version of these records exists, it is virtually impossible to corrupt or hack the information in the blockchain database. Only by consensus among the network members can information in blockchain system be updated.

So how does blockchain make a difference in the world of IoT?

It’s simple: IoT is expensive due to complex and centralized IT infrastructure. Furthermore, people are more concerned about their privacy and how much data internet-connected devices collect about them. But with blockchain, it is possible to streamline and secure the value chain of IoT, so that different technologies worldwide, throughout all industries, can communicate together.

This is made possible using permissioned blockchain. Through blockchain-based smart contracts, companies can capture customer’s data and use code to embed logic into the smart contracts for automatic management of transactions between its customers.

A permissioned blockchain is one that makes it possible to specify who can join your network. It also allows participants on the blockchain to see only what they’ve been given rights to access.

If you imagine what it would take to have people accept to share their personal data with IoT devices—you would imagine a pretty monstrous industry that offers incentives in return for data, right?

That’s why blockchain technology is poised to streamline the way businesses capture and consume data collected by IoT devices.

Build trust

Using blockchain for your IoT data offers stronger data protection, helping to foster trusting working relationships with your customers or partners. Blockchain solves the problem of data manipulation and holds everyone to the highest degree of accountability. Customers using IoT devices no longer have to feel that companies that collect their data might have ulterior motives behind it.

Securing data

Leveraging blockchain for IoT devices makes it possible to use cryptographically generated digital signatures to authenticate the software on the device when it is first powered up. In addition, an IoT device will be required to authenticate itself on the network it is connected to before transmitting or receiving data.

Access control

Through permissioned blockchain, device access and resource controls can be devised to limit what can be accessed on the device by controls and applications. This will ensure that if the component of the device is compromised, the intruder will have limited access to other parts of the system.

Reduce costs

By bringing your IoT devices to the blockchain, you’ll cut down the overhead costs associated with middlemen and intermediaries. Blockchain distributed ledger system allows your customers or partners to access and share IoT data without the necessity of third parties or control by a central entity.

Faster transactions

Leveraging smart contracts for your IoT transactions offers a great opportunity to make cross-border payments faster and more securely. Not only can blockchain technology speed up transactions by reducing settlement times from days to seconds, it is capable of tracking and trading digital assets seamlessly.

The Result:

Blockchain holds a great promise for IoT businesses; creating opportunities to reduce costs of operating business and foster trusting relationships with customers.

If being a part of how the world of Internet of Things will coexist with blockchain technology in the future is important to you, get involved with us today! www.spinfluence.co