Is Blockchain a Key to IoT Transformations?

How blockchain is influencing the Internet of Things

Blockchain and IoT are two revolutionary technologies that have disrupted and transformed the modern business world. Having been originally a technology behind cryptocurrencies since 2008, blockchain is a distributed ledger of encrypted “blocks” that record transactions between two parties. IoT, or the Internet of Things, is a network of interconnected computers that are embedded in everyday devices, industrial equipment, vehicles, etc. This term was first coined in 1999 by Kevin Ashton, an assistant brand manager at Procter & Gamble. The IoT technologies can be used in a wide range of industries, such as:

  • household appliances (smart home),
  • healthcare,
  • retail,
  • transportation,
  • manufacturing,
  • urban infrastructure, etc.

In this article, we are going to discuss the trends and challenges of the IoT as well as see how the blockchain technology can help solve these challenges.

Source: VCCircle

The Internet of Things: Trends and Forecasts

Since 2015, the number of smart devices has grown from millions to billions. According to the IHS Technology whitepaper, there would be over 30 billion IoT devices by 2020. Other IoT trends and forecasts for today are as follows:

  • AI integration. Artificial intelligence and machine learning seem to be a natural part of the IoT world. Today people can control the IoT devices with voice commands. For example, it is possible to integrate Amazon Alexa in various smart home appliances such as coffee makers. Other examples are robotic vacuum cleaners, self-driving vehicles, smart thermostats, and more. Machine learning enables every smart device to learn its user’s habits and patterns and thus respond accordingly through learning. Besides, the use of AI in IoT devices generates a range of new opportunities and use cases for the future.
  • The growth of the Internet of Things in the healthcare industry. Today patients can wear health monitoring IoT devices that allow their doctors to remotely check such indicators as blood pressure, sugar levels, heart rate, etc. Besides, the IoT can reduce human errors and thus streamline the workflow at the clinics and hospitals. For example, “the Internet of Medical Things (IoMT) can help the healthcare personnel avoid crowded emergency departments and waiting rooms. i-Scoop predicts that 87% of healthcare organizations will have adopted the IoT technology by 2019.
  • Smart cities. The Sidewalk Toronto project currently aims at turning the entire city into a smart hub, starting with individual neighborhoods. The new smart city model is based on smart sensors that are likely to turn the neighborhood into a safe, clean, and comfortable place to live. If put into practice, this model can be used by other cities.
  • New employment opportunities. Now it is possible to get the Internet of Things degree in universities. It means that the role of the Chief Data Officer (CDO) will be more common on the future jobs market. According to the Visual Capitalist infographics, 90% of global corporations will have this role by 2019.

The Internet of Things: Challenges

The IoT powered industries can face the following challenges nowadays:

  • Connectivity problems. The rapidly growing number of smart devices will require more advanced infrastructure as they will heavily rely on Internet connectivity.
  • High costs. The IoT solutions can be expensive because of the high infrastructure and maintenance cost associated with centralized clouds, big server farms, and networking equipment.
  • IoT device security concerns. Lack of security is the major drawback of IoT devices. IBM reports that during 2017, the amount of IoT related cybercrime grew by 600%. That’s a shocking figure and if nothing is done to prevent the IoT attacks, a disaster will happen. For example, insecure IoT devices can threat the human health and even life, as happened in 2017, when a vulnerability was discovered in IoT powered implantable cardiac devices. To make matters worse, IoT devices can be attacked from several angles: software, hardware, and network.

Today the hardware manufacturers such as Cisco and Dell are working on infrastructure enhancements to fix these issues. And this is where the blockchain technology steps in, as its decentralized approach has a huge potential to solve the mentioned challenges.

Source: Entrepreneur

Blockchain and IoT

Currently, the Internet of Things devices rely on the traditional, centralized communication model, where all of the data from the devices is stored on a central server. On the contrary, blockchain offers a decentralized model that makes the IoT networks less infrastructure dependent and more secure. Blockchain will bring the IoT the following benefits:

  • Standardized P2P communication model to process the billions of transactions between devices will cut down the costs associated with installing and maintaining centralized data centers.
  • A failure in a single network node will not destroy the entire network.
  • Blockchain will significantly reduce the data center installation and maintenance costs thanks to the ability of the blockchain technology to process billions of transactions between the devices. Moreover, the use of blockchain will allow the enterprises to minimize the revenue loss that would occur due to possible security breaches.
  • All of the transactions will be securely recorded in blockchain’s distributed ledger while being checked and confirmed by other network nodes. Hackers cannot attack this ledger because it does not exist in a single location.
  • As blockchain is the technology behind cryptocurrencies, IoT device owners can use it to sell the data that they generate for the digital currency.

The blockchain technology is now being applied across various industries, such as fintech, real estate, stock trading, healthcare, retail, government, and many others. It seems like the IoT is the next industry that is going to be disrupted by blockchain. So are blockchain and the Internet of Things made for each other? As per IDC, 20% of all IoT deployments will enable the basic levels of blockchain solutions by 2019. Here are the most common use cases of blockchain and IoT:

  • Supply chain and logistics. This industry involves lots of movements that must be tracked, thus companies are enabling the IoT functionality in their vehicles to track the shipments. The combination of IoT and blockchain can improve the traceability of the goods within the supply chain, thus reducing the issues such as delivery delays. The IoT sensors, e.g. RFID tags, GPS, temperature sensors, etc. give information about the shipment status, and this information is then stored in the blockchain and can be accessed via the smart contracts.
  • Protection of smart home devices. to prevent hacker attacks on smart home appliances, companies can use blockchain based biometrics to record the facial recognition, voice, fingerprints, etc. As a result, no one else except the owner can access the IoT smart home devices.
  • Shared economy. Initiatives such as home sharing and car sharing can also benefit from blockchain. For example, smart contracts can help the tenants to securely unlock the doors of leased cars or apartments without any third parties involved.

Now let’s see how companies across the world use blockchain and IoT in their projects.

Blockchain IoT Projects

Here is a list of companies, projects, and startups that successfully combine the IoT and blockchain technology.

1. Hdac Technology

Location: Switzerland
Founded in: 2017

Hdac is a blockchain based IoT contract platform that not only exchanges but also restricts the use of connected devices. The company provides solutions for the system integration/platform, portal service & consulting, blockchain based hardware, and industrial IoT solution business.

2. DiscoveryIoT

Location: Malta
Founded in: 2016

Discovery is a crowd-sourced network powered through mobile phones that form the nodes of the blockchain network. The network can handle over million transactions per second. Since it is built on a minerless infrastructure, it has near zero transaction costs. Currently, the network operates in the supply chain industry. The company also produces the “cliots” – IoT tags that are compatible with smart sensors and require no hardware. The cliots also feature an energy harvesting mechanism that removes the need for batteries or any other power sources and thus enables the powerless transmission of data.

3. Filament

Location: USA
Founded in: 2012

Filament builds comprehensive blockchain solutions for the enterprise and the Industrial Internet of Things. The company provides the hardware, software, and service solutions that allow the connected devices and machines to securely connect, interact with and transact value against the blockchain technology. The company uses blockchain to identify and authenticate devices as well as charge fees for the network and data services by using bitcoin. Filament’s technology can be applied across a wide range of cases, such as device-to-blockchain transactions, data sharing, gated access control, and monetization.

4. Xage Security

Location: USA
Founded in: 2016

Xage is the world’s first blockchain security platform for Industrial IoT (transportation, utilities, manufacturing, energy, construction, and mining). The combination of blockchain with encryption provides security, redundancy, self-healing during an attack, and real-time autonomous operations. The platform offers the following features:

  • Identity & authentication
  • User-/role-based access
  • Credential management
  • Industrial protocols
  • Zero-touch deployment
  • Audit & compliance
  • Secure data exchange
  • Intermittent connectivity


Location: Germany

IOTA provides its own distributed ledger called “the Tangle”. Unlike other distributed ledgers, it does not consist of transactions grouped into blocks and stored in sequential chains, being a stream of individual transactions entangled together instead. IOTA promises to cover the following use cases in the industrial IoT domain:

  • Smart supply chains
  • Time and costs saved on auditing data
  • Machine-to-machine (M2M) micropayments
  • Reduced costs through predictive maintenance
  • Increased efficiency and business opportunities
  • Inventory reduction through BI analysis of data stored in the Tangle
  • Improved B2B trust through immutable and transparent record keeping

6. Vechain Tech

Location: China
Website: >
Founded in: 2015

Vechain uses the blockchain technology to solve the problem of counterfeits and product traceability across supply chains and logistics with the help of smart RFID tags. The company offers the “Blockchain as a Service” solutions by installing smart trackers and microchips into a wide range of products, from alcohol to designer handbags and jewelry.

7. Ambrosus 

Location: Estonia
Founded in: 2017

Ambrosus is a blockchain powered IoT network for food and pharmaceutical enterprises that enables seamless and secure data exchange between sensors, distributed ledgers, and databases to optimize the supply chain visibility and quality assurance. The company also has its own digital token – Amber.

8. SmartMesh

Location: Singapore
Founded in: 2017

SmartMesh is an IoT protocol that allows the smart iOS and Android devices to connect to each other without the Internet by using P2P connections. The SmartMesh technology makes it possible to form the agile, decentralized Mesh Networks that can repair themselves and have higher speeds and bandwidth than standard Internet connections.

9. Brooklyn Microgrid

Location: USA

Brooklyn Microgrid (BMG) is a project aimed at the development of a community-powered microgrid in Brooklyn. The participants can engage in a sustainable energy network and choose their preferred energy sources. The BMG is powered by EXERGY, a blockchain based platform that enables local energy transactions via an online marketplace. The network pursues the following key goals:

  • Optimize energy distribution and infrastructure upgrades
  • Protect local communities and economies during emergencies
  • Provide infrastructure to support community involvement


Location: Germany
Founded in: 2015 uses the IoT Layer technology that connects devices to the blockchain in order to control the access. The IoT layer acts as a firewall and controls all incoming and outgoing messages, each of which needs to be signed with a private key. It is possible to use the technology with any devices.

The technology can be applied in the property sharing industry. For example, the startup partners with Airbnb to completely automate the rented apartments. When used in smart locks, the smart contracts open the apartment door in case the agreements were satisfied.

The company is planning to develop a Universal Sharing Network (USN) to create a secure online market of connected things. USN makes it possible to securely rent, sell, or share any object without intermediaries.

11. Golden State Foods + IBM

Location: USA
Founded in: 2017

Golden State Foods, a food service company that has existed on the US market since 1947, has partnered with IBM to optimize the business processes by using blockchain and IoT. Golden State Foods are using IBM’s Watson IoT platform to manage their 2,000+ trucks and connect the restaurants in more than 125,000 locations. The collected sensor data ensures automatic reporting and resolving of any possible issues are automatically reported and addressed before they can cause bigger problems. As a result, Golden State Foods can benefit from improved food safety, fresher ingredients, and fewer operational costs.

12. NetObjex

Location: USA
Founded in: 2013

NetObjex provides a combination of a device platform, mobile platform, and IoT cloud platform. The IoT Blockchain enablement platform helps enterprises to get the most out of blockchain by implementing pre and post processors. One of the company’s projects is a smart parking solution that uses blockchain and IoT. The solution makes it easier to find an available place at the parking and automates the payments by using cryptocurrencies. IoT sensors calculate the fee, and the customer is billed directly through the crypto wallet.

13. MediLegder

Location: USA

Mediledger is the IoT blockchain platform that allows tracking the legal ownership change for the prescription medicines, thus preventing the counterfeit drugs and recipes. The medicine related data is timestamped and recorded in the distributed ledger. As a result, the end customers manufacturers, wholesalers, and other supply chain participants can securely access it.

14. Atonomi

Location: USA

Atonomi is an embedded solution for IoT developers and manufacturers that enables secure transactions between the IoT devices by using the blockchain based immutable identity and reputation tracking. The Atonomi Security Protocol verifies the device identity, tracks the device reputation, and stores all of the transactions in the blockchain ledger.

The Bottom Line

Blockchain and the Internet of Things are disruptive technologies that are rapidly changing the world of technology. If used together, these two can cause a technological revolution.

Today’s IoT trends are as follows:

  • AI integration, such as voice-activated household appliances.
  • More IoT in the healthcare industry, such as health monitoring wearables and smart trackers in hospitals.
  • Smart cities.
  • New employment opportunities – the IoT degree in universities and the new role of the Chief Data Officer (CDO).

The IoT is now facing the following challenges:

  • connectivity problems,
  • high costs,
  • lack of security

Blockchain can help the IoT developers resolve these challenges by providing a decentralized network of IoT devices. As a result, all of the transactions will be securely recorded in blockchain’s distributed ledger, and the absence of a centralized location will prevent the hacker attacks. Moreover, the network nodes will not depend on each other: if one node is out of order, it does not affect the performance of other nodes.

Currently, blockchain is used in a wide range of IoT projects across the world in the supply chain, logistics, energy, property sharing, food delivery, telecom, and many other industries. Hopefully, these two technologies will benefit from each other and create a transparent, trustworthy, and protected environment.

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Anastasiia Myronets
Written by
Anastasiia Myronets

Technical writer, IT copywriter, content manager, translator with 12 years of experience.

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