Can the IoT Benefit from Blockchain Technology?

Can the IoT Benefit from Blockchain Technology?

By Marc Kavinsky, Editor at IoT Business News.

There are two technologies we’ve heard discussed a lot in recent years, blockchain technology and the Internet of Things. Both have been promising to revolutionise the way we live, making the world more convenient, safer and more decentralised.

The Internet of Things has been rolled out to both businesses and consumers. Smart home devices like internet-connected thermostats and lights are great examples of this. While businesses regularly use IoT devices to monitor the efficiency of processes in production and logistics.

The most prevalent example of blockchain technology is in cryptocurrencies. These digital alternatives to traditional currencies take some of the qualities of gold and combine it with a decentralised mechanism for governing and policing its operations.

With no central bank, cryptocurrencies like Bitcoin, Ethererum and Litecoin have a public ledger listed on the “blockchain”. Instead, computers, or ‘nodes’ operate around the world process and verify transactions.

These cryptocurrencies can be used in a small but growing number of places for day-to-day commerce. For example, it’s now possible to buy your morning caffeine fix from Starbucks or new stationery and furniture from Office Depot. Enthusiasm for crypto is beginning to gather pace, with many blogs and crypto news sites reporting on the latest developments.

But can these two revolutionary technologies be combined to extract the benefits from both at the same time? Market Research seems to think so. It has forecasted the two could be worth $254 billion by 2026.

Security Improvements

The Internet of Things has been held back by the inherent security issues that come with having many devices connected to a network. They’re attractive targets for computer criminals who want to launch Distributed Denial of Service (DDoS) attacks since they can launch many simultaneous attacks when infiltrating a single network. IoT devices have (traditionally at least) been harder to secure than computers and other devices.

Smart refrigerators, WiFi routers and connected thermostats are all common targets for this kind of attack, particularly when they are left with their default password.

Blockchain technology can be used to tackle this security challenge. Firstly, the distributed ledger is immutable, as in tamper-proof, meaning trust between each device doesn’t need to be established in the same way. Data leaks can also be more easily identified since they are recorded permanently in the ledger.

Additionally, blockchain provides better encryption and an additional layer of security, making it harder for hackers to infiltrate a network.


As networks of Internet of Things devices grow, it can be difficult to authenticate and authorise each device on a centralised network due to the high levels of resources required. Traditionally, this would mean you need huge numbers of powerful services to meet the demands.

With blockchain technology, these issues can be addressed by allowing all the devices on the network to undertake authentication. This means other IoT devices could perform some of this role, spreading the workload over the entire network and removing the need for huge gateway devices.


A decentralised network spread out across many Internet of Things devices would also allow blockchain systems to be sped up. Blockchain technology, particularly cryptocurrencies, are currently held back by the slow speed at which they process transactions.

By utilising the Internet of Things, this could be addressed by adding significantly more decentralised processing power to the network.


In tandem with improved speeds, decentralised blockchain processing on the Internet of Things could help to reduce costs. Large number-crunching computers can be prohibitively expensive but could be much cheaper when spread out over many smaller devices.


Current IoT networks often have a central gateway that all the devices communicate with. This creates a single point of failure vulnerability that could be attacked, resulting in the entire network being taken down. While you can use backup and redundancy limits to prevent or limit downtime, they can be expensive.

Using a blockchain would distribute both authorisation and authentication over an entire network, thus removing the single point of failure.

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