Blockchain Technology is a technology in which records, also known as the block, of the public in several databases, known as the “chain,” in a network are connected through peer to peer nodes. Typically, this storage is also referred to as a ‘digital ledger. Every transaction that happens in this ledger is authorized by the digital signature of the owner, which then authenticates transaction and helps to safeguard it from tampering.
Blockchain is an emerging future technology with many advantages in an increasingly digital world. While blockchain and the Internet of Things (IoT) are each powerful by themselves and are independent of each other, the combination of these technologies can be used by enterprises in an incredible way. This combination of IoT and blockchain is sometimes referred to as BIoT or Blockchain of Things.
Advantages of Blockchain of Things (BoT) :
Following are some advantages that blockchain provides to IoT systems as follows :
- Tamper-proof data –
This is because the blockchain technology eliminates the central server concept of IoT and allows the data to flow through the blockchain distributed ledger for each transaction with appropriate authentication.
- Robust and highly reliable –
This approach is highly reliable and robust because in this there is no single control authority.
- Cost reduction in developing huge internet infrastructure –
Blockchain in IoT reduces the cost by removing overhead associated with middlemen and intermediaries. It also lowers overhead expenditures by significantly reducing transaction costs.
- Ensuring security and privacy –
Blockchain ensures a high amount of security and privacy of data in IoT because here the data flow through the distributed ledger with proper authentication.
- Establishing trust –
Blockchain which is designed to remove trusted third party in a decentralized system is an ideal solution to resolve trust issues in an IoT ecosystem, with the help of blockchain, different parties can trust and verify the data.
Disadvantages Blockchain of Things (BoT) :
Some disadvantages of blockchain in IoT are as follows :
- Limitation with storage facility –
In IoT ecosystem, storage capacity required for sensors and actuators is actually very less when compared to the ledger-based blockchain technology. Also in IoT, we require a single server but in blockchain technology, multiple servers are required for ledger.
- Lack of skills in the field –
As this blockchain technology is new in the market there are many challenges to make it convenient.
- Legal issues –
This is one of the most important disadvantages of blockchain technology because there is no legal code to follow in blockchain technology.
- Scalability –
Scalability might lead to centralization but if it becomes centralized then the technique behind cryptocurrency would be revealed.
- Lack of workforce skilled –
A skilled workforce that knows about the concept of IOT integrated blockchain is very less in the market.