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digital daily: Blockchain and IoT

In the 1980s, a group of Carnegie Mellon students tinkered with their vending machine to be notified of when they were out of Coca-Cola. It saved them trekking time to the vending machines. And time is a precious commodity. Today's world embodies numerous complex systems with manual tasks that create lags and slow value creation. The "Internet of Things (IoT)" connects physical objects to the internet to send and receive data with limited human intervention. The result is greater value creation, efficiency, and automation. From wearables and smart home devices to applications in the supply chain industry, IoT amassed over $384 billion in market cap at the end of 2021. However, security remains a lingering issue in stepping toward large-scale deployment. The most prevalent are DDoS attacks due to the centralized architecture of traditional IoT. The low processing power and storage of device sensors also limit the technology’s scalability. Opportunities for blockchain technology to complement IoT are compelling. First, the immutable qualities of the blockchain ledger add transparency and reliability to data. In enhancing security, blockchain’s decentralized and cryptographic quality reduces vulnerability to single-point-of-failure issues and improves data verification methods, respectively. The cherry on top, however, is the transaction layer of blockchains. Through cryptocurrencies, value can be transferred in a seamless and cost-effective fashion between devices and systems. It also introduces token incentive mechanisms to encourage decentralized participation in validating transactions on the network. For both technologies, it is early, with challenges to be met to reach escape velocity. However, the interaction between Blockchain and Internet of Things is inevitable as every component in our world becomes more connected.

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