Embracing IoT: Blockchain’s Role in Promoting Development
There seems to be no stopping to blockchain’s popularity, especially with the recent success of Non-Fungible Tokens (NFTs) and the longstanding appeal of cryptocurrency. However, many investors wonder whether it can have other functions besides creating a digital economy on its own.
The Internet of Things (IoT) is a network of sophisticated chips linked to sensors and actuators to transmit various types of data. This leads to a thorough analysis of different processes, allowing business owners to project sales figures and even preempt marketing trends. In an odd way, IoT and blockchain technology may have the potential to work together and form a more robust platform for business owners.
Understanding IoT’s Security Issues
Part of the reason’s unpopularity with newcomers in their first years of business is the lack of security. IoT devices are notoriously susceptible to security vulnerabilities, most commonly with Distributed Denial of Services (DDOs) attacks. These attacks can compromise computer systems through simultaneous unauthorized data requests, forcing the server to shut down out of exhaustion. It’s dangerously common for cyber-criminals to exploit these weak protection systems.
Limiting Your Business’s Scalability
Business owners must consider the right timing to scale up their operations. It’s a response to cater to a higher volume of clients or more comprehensive on-site functions. Unfortunately, IoT has a complex issue with increasing layers of authentication. The more devices are connected to an IoT network, authorization and authentication of different nodes will cram into a bottleneck. This means a business needs to supplement it with larger servers for the greater amount of information exchange.
IoT is extremely vulnerable to overloading without the proper reinforcement, whether through natural data transfer or infiltration from cyber-criminals. Thankfully, another breakthrough technology may be the solution necessary to make up for IoT’s scalability and security concerns.
Reinforcing IoT with Blockchain Technology
Blockchain is a form of a digital ledger shared between participants in the system. It’s most commonly used for the validation of transactions in buying and trading cryptocurrency. However, a business owner could also use it as an efficient tracking system. This is because the records of movement in the ledger cannot be amended or removed.
This level of transparency and security is one of the most appealing features of blockchain technology. Since IoT networks process data across different devices, blockchain technology can easily pinpoint which sources conducted which transaction. Additionally, blockchain can help with security concerns by making it tamper-proof for all parties involved.
Through blockchain, businesses can increase trust among stakeholders since it allows better coordination among multiple connected devices. It also offers a higher level of protection to gain access to the network. While it may be more transparent, its level of encryption is more highly sophisticated to prevent hackers from overwriting existing data records.
An effective application of blockchain technology for businesses is using smart contracts. This agreement between parties is stored in the blockchain, used for various purposes, like authorizing automatic payments. Once payment conditions are met, there’s no more human input needed after the right terms have been filled.
Technological advancements will always be aligned with a business’s success. Unless you’re willing to adapt, you’ll most likely fall behind the industry’s shift toward digital transformation. For this reason, you should invest in reinforcing your IT department.
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