IoT, the Internet of Things, creates data automatically. Webcams on the street. The sleep cycle data from your wearable. All this info is sent to centralized servers in the cloud. But how safe is that data? It’s a valid concern.
This was easily avoidable.
The answer to this issue: blockchain. The introduction of blockchain into the IoT realm ensures that a user's data will be safely protected from hacking.
What is Blockchain?
At its core, blockchain is a digital ledger that stores information on blocks (a set of transactions over a given time period) that are encrypted and then chained together. When a user wants to put data on a blockchain they send that information to the blockchain where it is written and encrypted onto a block. When that block is verified to be an accurate record of transactions it is then connected to a chain of prior blocks. You cannot change the information once it is on a block. To change or update information, additional blocks are added onto the chain.
Blockchain technology has many applications, including automated ‘smart contracts,’ secure sharing of data, and protecting the data generated by IoT, that is, devices in the real world. Because of blockchain’s unique ability to secure data without the need of a trusted central authority, it has attracted some of the biggest companies in the world, such as IBM, Amazon, and Mastercard.
Blockchain technology has the potential to boost global gross domestic product (GDP) by US$1.76 trillion over the next decade.”
- PwC Time For Trust report (October 2020)
Why Blockchain Matters
Blockchain is the perfect solution to make IoT a more secure space. Why? The structure of the system makes it extremely difficult and unprofitable for hackers to gain access to data stored on blocks. Blockchain does not allow a user to change the data held within blocks, making it substantially more difficult for hackers to steal or alter the information on these encrypted blocks. In order to alter a chain, a hacker would need full control of at least 51% of all the computers in the same distributed ledger.
Another benefit of blockchain tech is that many of the largest and most well-known blockchain networks are public. While you might think that this is a disadvantage, it is actually quite the opposite. Because there are so many people looking at the data on blocks, it is easier to spot potential hacks because users are constantly viewing each other's work. Attempts to put false data on a blockchain are rejected and not added to the current block of transactions. Ironically, this means that private blockchain networks may be more vulnerable to hacks because there are far fewer people reviewing them. And if the private blockchain uses proprietary technology, it hasn’t had the same scrutiny that open source software enjoys.
Cryptography is at the heart of the security of the blockchain. This protection from hackers comes in the form of hash functions. Hash functions are mathematical functions that take an input of any length and convert it into a random encrypted output of a fixed length. For example, a person could input their bank information and the hash function would make it appear as a random series of letters and numbers.
Since the blockchain uses a hash to fully encrypt every block of data, it becomes progressively harder for a hacker to crack this code. Imagine trying to crack the passwords for hundreds of Russian dolls, nested one inside the other.
Finally, the crown jewels of blockchain security are private keys. Private keys are assigned to a user when they create a wallet account, and these keys are so secure that it would literally take a computer billions of years to steal one. Private keys act as a unique signature that verifies every transaction a user makes. If an account does not have a valid private key, the transaction will be rejected by the system.
“The future of IoT is dependent on security. The IoTeX blockchain bridges the current gap between blockchain and IoT, adding a layer of security that is scalable and affordable. For example, for a price of 1 stamp, you can make over 2500 transactions. This is no longer about what is possible, the future is here.”
- Raullen Chai, Co-founder of IoTeX
What do IoTeX’s partners say about IoT?
Watch these remarks by Anoop Nannra, Global Blockchain Segment Leader, Amazon (AWS); Chad Liang, VP of Listings, Bitmart Crypto Exchange; Nathan Miller, CEO, Consensus Networks.
Blockchain can greatly benefit IoT by protecting the data gathered by devices. Blockchain’s structure, decentralized nature, hash functions, and keys allow for strong security that ensures that a user’s data will be protected from hacks. It is estimated that there will be 463 exabytes (a number followed by eighteen zeros) of data being produced per day in 2025 (200x more than today), and we can rest assured knowing that blockchain will be able to prevent this data from getting into the wrong hands.
If you want to learn more about the possibilities of blockchain IoT technology, check out IoteX! Their deep technical skills and experience combining blockchain and IoT has allowed them to make innovative projects like the Pebble tracking device, the award-winning UCam security camera, and a platform for developing DApps and integrating with other blockchain platforms. Click here to learn about this groundbreaking company.