Applications of Blockchain in The Internet of Things

Published : Nov 16, 2019

blockchain applications in the internet of things

  • The Internet of things (IoT) based solutions are gaining significant traction in many different industries like home automation, healthcare, warehousing, transportation, and logistics. Traditional centralized IoT solutions often fail to meet scalability and security challenges occurring in large-scale enterprise operations. The use of blockchain can solve such problems with a distributed ledger providing secure transaction storage and peer-to-peer communication among participating nodes. This article gives a high-level overview of blockchain-enabled IoT (internet-of-things) solutions and applications.

    Blockchain Technology 

    Blockchain is a type of distributed ledger technology that records transactions across multiple nodes, instead of a central transaction system. Each participant or node in the blockchain network gets access to an up-to-date copy of the encrypted ledger. It enables them to read, write, and validate transactions.

    Although blockchain generally finds key applications in the financial domain, it is also providing opportunities for building secure IoT solutions. Blockchain as an underlying technology can provide fast, secure efficient transactions and coordination among internet-connected IoT devices.

    Also ReadExploring Blockchain and IoT Use Cases in Different Industries

    IoT (Internet of Things)

    IoT is introducing opportunities for diverse businesses, especially in industries like home automation, healthcare, warehousing, transportation, and logistics. IoT solutions involve a complex network of smart devices that provide the opportunity to develop new services based on internet-connected physical devices—from machines and cars to home appliances. 

    IoT Challenges

    While IoT adoption is growing significantly, some key challenges need to be addressed to make the IoT solutions scale and support the increasing demand for connected devices. IoT solutions must address the security and privacy concerns around these devices and the data they collect. Some of these challenges are:

    • Scalability
    • Security
    • Lack of data standards/uniformity
    • Interoperability of devices and platforms 
    • Costly IoT solutions
    • A high volume of messages (communication costs)
    • A high volume of data generated by the devices (storage costs)
    •  Complex analytical processes (server costs)
    • Centralized cloud platforms

    Applications of Blockchain in the Internet of Things 

    Blockchain technology-based IoT solutions promise to address the problems described above. Blockchain based distributed IoT networks can solve many problems related to traditional centralized IoT solutions, such as security, scalability, and cost. For instance, it can enable connected devices to communicate directly with distributed ledgers. Then, it can enable smart contracts to update, validate, and subsequently share data to respective participants in the business network, including users. It will reduce the need for human monitoring and actions, and thus, establishing trust in the data generated by the devices. The decentralized nature of blockchain networks can also enhance the security of IoT solutions. By executing predefined smart contract solutions and implementing specific consensus mechanisms, it can eliminate actions and events occurring from compromised devices.


    Explore how the combination of blockchain technology and IoT can enable your business to innovate. Oodles provides custom blockchain development servicesOur blockchain and IoT experts can assist you through a range of blockchain IoT use cases.

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