Blockchain is a huge database that maintains a continuously growing set of data records. Some characteristics are:
Distributed system: There is no central computer holding the entire chain. Rather, the participating nodes have a copy of the chain. If someone wants to add a transaction to the chain, all the participants in the network will validate it.
Public:Blockchain is public means everyone participating can see the blocks and the transactions stored in them. But can’t see the actual content of your transactions it is protected by your private key.
Decentralized: No single authority who can approve the transactions or set specific rules to have transactions accepted. That means there’s a huge amount of trust involved since all the participants in the network have to reach a consensus to accept transactions.
Secure: The database can only be extended, and previous records cannot be changed (at least, there’s a very high cost if someone wants to alter previous records).
One of the major challenges which IoT is facing today is its security model. IoT architecture is based on client/server model. All devices are identified, authenticated and connected through cloud servers that support huge processing and storage capacities. This centralized architecture is making the IoT ecosystem vulnerable if security is not thought of by design.
The decentralized, autonomous capabilities of the Blockchain make it an ideal component to become a foundational element of IoT solutions. It is not a surprise that enterprise IoT technologies have quickly become one of the early adopters of Blockchain technology. We at Mobiloitte is welcoming this trend by working on these types of projects.