|Tech analytics firm Gartner has wonderful news for companies who plan to integrate Internet of Things systems with blockchain as 75% of organizations have merged the two technologies together or plan to do so within the following year / Photo by: Casimiro PT via Shutterstock|
Tech analytics firm Gartner has wonderful news for companies who plan to integrate Internet of Things systems with blockchain as 75% of organizations have merged the two technologies together or plan to do so within the following year, according to Brandon Vigliarolo of TechRepublic, an online trade platform. The said figure will jump to 89% within two years, showing that companies with heavy investments in IoT technology nearly see the value of using blockchain to improve IoT reliability and security.
Furthermore, 94% of firms with mature IoT implementations intend to connect their system with blockchain. Avivah Litan, distinguished vice president at Gartner, said that the integration of IoT and blockchain networks symbolize digital transformation and innovation. Litan added, “It is actually moving ahead at a much faster pace than expected, according to the survey.”
Why Firms Are Integrating IoT and Blockchain
The union between these two technologies has been featured on the news for some time, with analysts and large corporations like Samsung saying the integration of IoT and blockchain “is the way forward.” Gartner’s findings showed that it is happening quickly, and the report also answered the question of why IoT and blockchain are being unified. The reasons are not surprising.
C-Suite executives, directors, and senior level managers were surveyed by Gartner, as stated by Lucas Mearian of Computer World, a news website dedicated to publishing content on technology, 92% of the participants worked in an IT organization and 62% were CIOs and CTOs. According to the respondents, integrating IoT and blockchain will help foster an "increased security and trust in shared multiparty transactions and data." When IoT sensors and devices are connected to a blockchain, they enable “an immutable audit trail of key IoT data and related business events that is shared across multiple participants,” which can be verified by each party. The second reason is the ability of blockchain-connected IoT devices to help companies save money.
Blockchains leverage the use of decentralized applications that support smart contracts, work across business platforms, and enable automation. The latter minimizes labor needs and makes processes from factory and retails faster. Others cited the increased revenue and new business opportunities, as well as improved participant experience.
Blockchain serves as an automated layer between IoT sensors and as a repository for the data they generate and upload. For instance, IoT devices in shipping containers can track location and monitor temperature and vibration. The devices can also determine whether a shipment has been tampered. A real-world application is when FedEx touted a proof of concept that utilizes “sensor-based logistics.” The multinational courier delivery services company used two types of IoT sensors—one to act as a geo-sensor and the other to transmit data to a blockchain ledger.
|The union between these two technologies has been featured on the news for some time, with analysts and large corporations like Samsung saying the integration of IoT and blockchain “is the way forward” / Photo by: everything possible via Shutterstock|
The Potential of IoT and Blockchain
Gartner is not the only one who has seen the potential of an IoT and blockchain integration. UK-based Juniper Research said in November that leveraging blockchain and IoT tracking technology will “revolutionize” the food industry, slashing food fraud by $131 billion in five years. Ironically, the union between sensors and blockchain is happening just as the distributed ledger technology (DLT) has made it into the “Trough of Disillusionment” in the Gartner Hype Cycle. This is when interest in technology fades as pilots fail to “deliver anticipated results.”
Tech providers can improve the tech or see it fall out. However, promising projects with IoT will push up blockchain to the “Slope of Enlightenment,” Litan stated. She added that blockchain networks have become a promising innovation due to their ability to “affirm the integrity of data shared among constituents in multiparty process collaboration.” Moreover, IoT networks have emerged as a method for closing the gap between resources and their associated business processes.
IoT and Blockchain Integration Is an Emerging Technology
The integration of IoT and enterprise blockchain technologies is still new and barraged by a variety of technical and business challenges, Litan noted. In the long run, she expects IoT and blockchain to “enable innovative devices and business models.” However, the evolution of IoT and blockchain will take five years to a decade to achieve maturity, Litan explained. By 2024, more than 80% of implementers will need to upgrade their combined IoT and blockchain solutions at least once or twice to address technical issues such as scalability, security, reliability, and throughput, Gartner reported.
One promising area is standardization to facilitate the exchange of data between ledgers regardless of their iteration. For instance, FedEx collaborated with competitors DHL Express and UPS to develop blockchain standards that could be deployed in the whole industry. All of them are part of Blockchain in Transport Alliance (BTA), an industry organization.
FedEx CIO Rob Carter said that the same thing should happen for blockchain in order for it to be adopted across enterprises. When that happens, it will become a foundational technology across industries, creating new business models. Also, the government should promote a blockchain-based platform based on open-source software and industry standards. This ensures process transparency and guarantees that no entity profits from the technology over others, Carter argued.
Many companies have implemented IoT and blockchain solutions while others are planning of doing so next year. There will be security risks and other issues when that happens. However, it will all be worth it as blockchain and IoT will enable innovation and new business models.
|Many companies have implemented IoT and blockchain solutions while others are planning of doing so next year. There will be security risks and other issues when that happens / Photo by: NicoElNino via Shutterstock|