Smart contracts use blockchain to automate contract execution in IoT ecosystems when certain requirements are met. This is what enables a smart system to operate independently of a centralized authority.
Fremont, CA : With the use of sensors and other edge devices and networks, the Internet of Things (IoT) is transforming the way businesses work. This poses a significant challenge for businesses, which must safeguard data at all levels of the IoT ecosystem. Data protection has become increasingly difficult as the number of connected devices grows year after year. In an IoT system, blockchain is assisting in the fight against security breaches.
The decentralized nature of blockchain is a structural benefit, but it can be a challenge for IoT. IoT systems use client-server or hub-and-spoke architecture, which is a centralized authority. Building a decentralized IoT platform will aid in blockchain network stability, but because IoT sensors rely on central computing and storage resources, deploying them to handle their own compute and data storage may be complex.
Blockchain has been used in conjunction with IoT in a variety of industries. Smart houses, supply chains, distribution, and a recent mechanism known as smart contracts have all used it in conjunction with IoT. Smart contracts use blockchain to automate contract execution in IoT ecosystems when certain requirements are met. This is what enables a smart system to operate independently of a centralized authority.
This use of blockchain technology helps businesses handle data on edge devices in an IoT environment, lowering computer maintenance and data transfer costs. Since there is no centralized database and the ledger is not exposed to cyberattacks, it eliminates data management risks. It does away with the IoT gateway or some other intermediary system for data sharing, minimizing the time it takes to process data.
With the support of shared, distributed ledgers, blockchain introduces high-level protection by authenticating and approving encrypted device-generated data. Data computation and storage are spread through millions of computers in a distributed ledger. Unlike in the conventional model, the failure of a client's server or a network would not impact the entire IoT ecosystem. A blockchain network's resiliency will exceed fault tolerance in certain situations, meaning the network will continue to function even if nodes are taken offline.
The distributed security architecture of a blockchain can protect IoT devices and networks from botnet-driven DDoS attacks. Every node in a network is protected independently using a blockchain peer-to-peer network in this architecture.
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