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Considering blockchain technology for IoT

As with any new technologies emerging today hogging the limelight, blockchain is having its own hype around it. Even though it is a revolutionary technology for finance, contracts, etc., many publications are proposing blockchain to be used for IoT. Blockchain technology is a secure distributed ledger to monitor and store transactions and nothing more. If the transactions have to be unique, as most transactions need to be, then blockchain is the answer. This is the reason why blockchain is uniquely suitable for the financial world, where all kinds of transactions occur. It is breakable, at least theoretically, but not possible practically based on present technology. If quantum computers are a reality, then all fingers will be crossed about not how the blockchain will be broken, but when. The whole edifice of blockchain is resting on the majority of the participating nodes in a blockchain network not getting compromised by a malicious attack. Transactions which are suspicious to the network will be rejected. But is this what we want in the IoT world? We need security against malicious attacks even on a single node; if a single node is compromised, the whole network is at risk. This is in direct contrast to what blockchain has to offer.

Here I will be discussing about why we need not force fit blockchain into IoT, which is already complex in a way.

What is blockchain?

When a physical money transaction happens, the physical bill is transferred from the payer to the payee. Hence there is no chance of duplicating the physical currency. But if a currency is in a digital format, then it is easy to copy the currency digitally and use the copied currency for another transaction. To prevent copying of digital currency, a central authority is needed to monitor the transactions and to keep track of who is the owner of which currency value. This central authority is the weakest link of the digital currency or any other contract-based transaction. If the central authority is compromised for some reason, the whole currency and its value will fall on its face. Hence, it is very important to protect the central certifying authority from malicious attacks.

If the central authority is not needed for some reason, then the digital currency becomes fail proof. Blockchain technology is the answer where there is no central authority involved in policing and certifying the transactions. Blockchain is a distributed ledger where all the participating nodes will have the history of all the transactions in place. If any copying occurs in one node, all the other nodes will come to know the duplicate transaction and will reject it. Blockchain is not breakable until the majority of the nodes in the network agrees that a transaction is valid. To break the network, one needs to possess computing power which is higher than all the participatory nodes combined and that is not practically feasible.

Where blockchain might be considered in IoT

Blockchain can track any transactions in an atomic manner and hence can be deployed where an asset is getting tracked. The asset might be transported from point A to point B and there might be infinitesimal intermediate points where the asset has to pass through. In such a scenario, the asset should not be tampered with or diverted or should not be renamed without prior permission. Blockchain, if implemented in this scenario, can keep track of the movement of the asset, considering each one of the atomic movements/registration as a transaction and preventing any duplicate entries.

In another use case, blockchain might be used to track the measurements of the sensors and prevent any kind of duplication with another malicious value in the same timestamp. But the same can be achieved in a variety of ways without involving blockchain. All we want is to secure sensor data from any malicious attacks.

If the data from sensors has any associated monetary value and can be sold, blockchain can be used to prevent duplicate selling. In other words, the owner of the data alone can sell the data and not the receiver the data. The receivers of the data can only use data but cannot sell. This scenario is remote in the IoT world at present, since the sensors are not autonomous and fixing the price for sensor data is tricky.

Where blockchain technology is a misfit in IoT

Going by the first use case above, it will look as though the blockchain acts as a keeper of unique datasets of a particular asset. In other words, blockchain acts as a glorified database, which it is, in this scenario. Blockchain in this scenario acts as a kind of primary key in a database, if we can talk in a most simplistic manner about blockchain.

Blockchain’s main strength is the number of nodes participating in the network so that majority of the nodes are not compromised. In an IoT scenario, unless a sufficient number of nodes participate, the blockchain itself will fail due to any malicious attacks. Hence, blockchain in a wider network does not make sense unless that many nodes are interested in a single asset which is getting transferred from point A to point B.

Can blockchain be used in a private blockchain network?

A private blockchain is a blockchain implementation in a private network. The private network will obviously have a lesser chance of getting attacked and will have a lesser number of nodes as well. However, a private blockchain is not a blockchain in the proper sense of the term since a proper blockchain will have many blockchain networks or nodes operating to monitor and use transactions. A single blockchain network in a private network is a glorified primary key keeper and not of much use to prevent malicious attacks, but only slower due to expensive computational requirements of blockchain.


Blockchain technology should not be considered as a panacea for IoT world and should be used judiciously. Blockchain technology, useful in its own way, has to be weighed with other technologies to secure the IoT network instead of blindly following the cloud. What we need is security against attacks in the IoT world and not against duplicate entries most of the times.

All IoT Agenda network contributors are responsible for the content and accuracy of their posts. Opinions are of the writers and do not necessarily convey the thoughts of IoT Agenda.

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