For the future of the Internet of Things, will blockchain be the future frontier of network security?

Why do experts think the Internet of Things needs blockchain?

A blockchain is essentially a continuously growing, shared record or digital ledger of events between many different parties. It can only be updated through consensus among the participants in the system, and once entered, it cannot be changed or deleted. In essence, a blockchain is a permanent record that cannot be destroyed. Blockchain eliminates the need for any third party trust, as each device participating in the public ledger must work to reach a consensus.

How does blockchain impact cybersecurity?

Without blockchain, storing, sharing and transferring data and information is always a risk. People interacting with each other online rely on some trusted central authority, and no matter what action you are completing online, you place your trust in someone else or some other reliable and trustworthy source of trust. Until the advent of blockchain, society relied on the "trust center" process to prevent hacking, tampering and sabotage.

An example of this is how banks collect, store and transmit data to individual customers. You receive your account statement online or are able to do things like transfer money, check balances, etc. But what stops banking institutions from making mistakes, providing false information, or simply not providing the level of security to prevent personal data from being compromised?

Unlike other currencies and payment networks, blockchain is not controlled by banks or governments. Instead, thousands of computers around the world independently verify encrypted transactions and manage the distributed ledger of network transfers. The ledger can be accessed by anyone online. But the key factor of blockchain is that while records can be added to the ledger, no transaction data can be changed or deleted.

How will blockchain impact the Internet of Things (IoT)?

According to an article published on ZDNet, both IBM and Samsung are hoping that blockchain will revolutionize the Internet of Things in the near future. The goal is to use blockchain as a record-keeper for the billions of transactions that will continue to be generated by the Internet of Things. With this in mind, blockchain seems to offer a solution to many of the problems we will face in the near future involving the Internet of Things, including the need to successfully scale to billions to tens of billions of devices.

Let's take an example of network traffic. Right now, every transaction and update that happens in the company is recorded in the cloud. It doesn't matter how trivial or small the transaction is; they are all recorded in a centralized cloud-based data center.

Imagine what happens when you have a scale of 50 billion devices, daily transactions every day - generating so many things that cannot be manipulated and the network cannot handle. With blockchain decentralized data, less network chatter and the Internet of Things can optimize its full functionality to fully realize its capabilities.

According to a recent report, IoT will create new trading markets by creating and matching supply and demand of physical assets in real time. The benefits that blockchain brings to IoT don’t stop there. Here are some other reasons why experts believe that IoT needs blockchain.

Today’s IoT is no longer:

1. Cost-effectiveness: Today we use expensive centralized cloud computing and server farms

2. Built for future upgrades: As technology continues to become obsolete, this creates a need for continuous creation of software and updates to hardware

3. Functional value: Internet connectivity does not automatically imply more functional value (ie: an Internet-enabled car does not “drive better”)

Blockchain presents numerous possibilities regarding cybersecurity and the Internet of Things. As devices become cheaper, computing power is becoming more powerful. Blockchain provides the ability to build a trustless system that enables peer-to-peer messaging protocols (highly encrypted) to ensure distributed data sharing and coordinate all devices allowing them to verify transactions. All signs indicate that in the future, blockchain will play an important role in the Internet of Things.