Blockchain and IoT – The Perfect TechnoRelationship

Let’s start someplace simple ~

What is blockchain?

Google approved definition is that Blockchain is a distributed ledger where a list of transactions is stored in multiple participating servers rather than on a central transaction server. Each participant in the blockchain network is granted access to an up-to-date copy of this encrypted ledger so they can read, write, and validate transactions.

Blockchain is extensively used in the financial domain but off late, they are also getting popular in the IoT domain. The possibility of decentralized IoT, facilitating transactions and coordination among interacting devices is too huge an opportunity to be passed over.

Now let’s talk about IoT.

IoT has introduced huge opportunities for businesses and consumers, especially in the areas of healthcare, warehousing, transportation, and logistics. IoT solutions involve a complex network of smart devices, and IoT provides the opportunity to develop new services based on cloud-enabled connected physical devices—from machines and cars to home appliances. And considering IBM has Watson IoT and IBM Blockchain, it’s but natural progression to working in sync.

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

Some of these challenges are:

Current centralized, cloud-based IoT platforms enforce message routing through these platforms. This enforcement creates a bottleneck to scaling the IoT solutions to large number of devices.


The huge volume of data that’s collected from millions of devices raises information security and privacy concerns for individuals, corporations, and governments. As proven by recent denial-of-service attacks on IoT devices, the large number of low-cost devices connected to the internet is proving to be a major challenge in ensuring IoT security.

Lack of data standards / uniformity:

The world is turning toward open-data initiatives, but there is no uniform approach. There are several protocols and no single platform for connecting devices from all manufacturers. The interoperability of devices and platforms is a key challenge to the growth of IoT solutions.


IoT solutions are associated with a huge number of devices and their network equipment. The costs associated with IoT solutions are proving to be very high as they need to cater to a very high volume of messages (communication costs), data generated by the devices (storage costs), and analytical processes (server costs). Subsequent growth will only add to these costs.


Centralized cloud platforms remain a bottleneck in end-to-end IoT solutions. Any disruption there can affect the entire network.

How do these technologies work together?

IoT allows devices to send data to private blockchain ledgers for inclusion in shared transactions with tamper-resistant records. IBM Blockchain enables business partners to access and supply IoT data without the need for central control and management. Each transaction can be verified to prevent disputes and ensure each partner is held accountable for their individual roles.

Current centralized, cloud-based IoT solutions may not scale and meet the security challenges faced by large-scale enterprises. The use of blockchain as a distributed ledger of transactions and peer-to-peer communication among participating nodes can solve such problems.

The combination of IoT and blockchain is creating a lot of new possibilities for using smart devices in the asset management cycle. As assets go through the various phases of their lifecycle, devices monitor different aspects and integrate the data from the assets into a blockchain of the business participants to provide real-time, trusted data. With blockchain’s smart contracts, rules can be created to monitor and control the temperature of a building based on the consumption of energy and price information of the energy from suppliers participating in the network. Similarly, the quality (and price) of the food items can be determined based on the real-time refrigeration data used in transportation. IBM (along with Samsung) demonstrated the use of blockchain in autonomous washing machines that can reorder detergent and replacement parts and arrange for after-sales service using smart contracts.