Blockchain Offers Internet of Things Data Quality and Data Security

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Blockchain and IoT

The rapid advances of blockchain technology and the Internet of Things are changing how business on the internet gets done. Blockchain provides superior data security and Data Quality and, as a consequence, is changing the way people approach big data. This can be quite useful, as security remains a primary concern for Internet of Things (IoT) ecosystems. IoT systems expose a variety of devices and huge amounts of data to security breaches. Blockchain has great potential for blocking hackers and providing security in a number of fields, ranging from banking to healthcare to smart cities.

In Japan, nearly 50 banks have partnered with Ripple, which is an open source blockchain organization, valued as Terra’s third largest market capitalization. This alliance enables the use of blockchain technology to provide instant, risk-free transactions at minimal costs. Traditional financial transactions can be quite expensive due to the large number of hacking risks involved. Partnering with Ripple allowed the banks to decrease the processing time of a transaction significantly and reduced associated security costs to nearly zero.


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In healthcare, the privacy, integrity, and control over a patient’s data is very important. As the number of various IoT devices monitoring a patient’s medical data increases, the number of entry points for hackers also increases. Unfortunately, using blockchain as a solution will be difficult for older, larger healthcare institutions. It will require rebuilding database infrastructures, training and hiring new staff, and persuading directors that blockchain is worth the financial costs. Newer health-based start-ups are much more likely to initiate the use of blockchain, while older organizations will hesitate to invest in the transition.

The primary advantage of blockchain, in terms of security, is its decentralization. No single individual or company has control of the data entry or its integrity. The accuracy of the blockchain is continuously verified by each computer in the network. With all points holding the same information, corrupted data at point A is blocked from becoming part of the chain because it doesn’t match with the data at points B and C.

Combining Blockchain with the IoT

The Internet of Things continues to expand. However, these devices are often lacking the security needed to keep the data safe. Critical infrastructures can be damaged by hackers as they “break in,” penetrating an organization’s computer network. The use of blockchain across all aspects of the IoT ensures authentication, standardization, and trust.

The combination of encryption and distributed storage means data can be trusted as accurate by all involved in the chain of communication. The private keys providing write-access to the blockchain system are held by machines. A human cannot rewrite the record to present inaccurate information. Instead, machines securely record details of the transactions.

Blockchain also has the potential for protecting highly personal data, such as in smart home devices that offer hackers access to the intimate details of a person’s life and daily routines. While this data must be shared with other devices and services to be useful, it also allows openings for hackers to break in. Allowing data coming from the IoT to be managed by blockchains would provide an additional tier of encrypted security.

Additionally, smart contracts can be created by organizations working with certain blockchain networks (Ethereum being one example). These contracts allow for agreements to be executed as conditions are met. This is extremely useful when authorizing a system to make a payment, after certain tasks have been accomplished.

Bottlenecked Data

Currently, IoT techs and sensor installers connect the IoT to a centralized processing system, which in turn promotes data bottlenecks. (At present, this happens only occasionally.) An in-house computer or a centralized cloud with storage and processing services may be the source of a data bottleneck. With more and more devices connected to a centralized system, and IoT data streams continuing to steadily grow, there is the strong potential for bottlenecking, and its symptoms (slowness, timeouts, and CPU spikes). Blockchain, as a decentralized system, avoids this problem.

A blockchain storage network duplicates data across several hundred (possibly thousands) of devices and computers. This provides significant redundancy and means the data will always be available when needed. It cuts down transfer time and eliminates the concern a single server will fail, making stored data unavailable.

Combining Blockchain and Big Data Analytics

The use of blockchain adds another layer to the process of big data analytics. This additional data layer resolves two issues for big data analytics:

  • Blockchain-generated big data is secure and it cannot be forged or altered.
  • Blockchain-based big data is easy to use and it is complete, structured, and abundant.

The data in the blockchain ledger can be used for the trading of energy and real estate and can be used in a variety of other industries. It can also be used for fraud prevention, as the technology permits financial institutions to check every transaction in real-time. Blockchain allows banks to identify fraudulent or risky transactions, preventing fraud before it happens.

Smart Grids and Blockchain

There are two basic concerns regarding the security of smart grids. The use of smart grids is based on “remote access” and “automation.” The potential for an individual or an enemy government to hack into smart grids is quite real. Hackers have already accessed traditional electrical grids. Blockchain can be used with smart grid electrical management systems, and two of its security measures used to thwart hackers:

  • Authentication: Verification someone accessing the grid has been identified.
  • Authorization: Verification the person with access has the authority to make changes.

According to Benjamin Gu, the chairman and founder of Daex (a cryptocurrency), Blockchain’s technology may provide improved security for data exchanges, interconnectivity, and permission control. Gu explained:

“The underlying technology has identification security through public-private encryption with key access. Those who attempt to ‘get in’ must verify their identity, and their authorization, to do so. If key access codes are kept safe and secure, Blockchain will do the rest.”

Blockchain can also empower cities to be innovative in using big data as they deal with local businesses. The combination promotes the efficient use of things such as transportation, energy, and even voting. Cities can benefit from the increased efficiency (and lower costs). Blockchain has the potential to change how we structure investments and start businesses.

Smart Cities and Blockchain

Blockchain provides the security needed to keep a smart city from being hacked. It promotes the secure and efficient use of a city’s infrastructure. The Internet of Things is like a city’s nervous system, with each device interconnected with the others, so they can communicate with each other and make decisions that manage the resources of a city’s population. The IoT provides a system of communicating devices, in turn supporting smart solutions for daily problems. All smart city solutions require the Internet of Things to make decisions.

The use of blockchain is a new concept to smart cities. Blockchain technology, when integrated into smart cities, can connect all of a city’s services, while simultaneously increasing security and transparency. It is anticipated blockchain will allow cities to use smart contracts, with the terms of the agreement written directly into lines of code.

Benjamin Gu has also suggested governments can use blockchain to develop smart cities as a way of dealing with increasing populations and dwindling resources. This includes handling waste management and traffic controls more efficiently. The technology is available, and many cities have begun experimenting, offering:

  • Smart buildings that can be programmed with heating, cooling, and lighting systems, based on real-time needs, as well as established patterns.
  • Street lights designed to be turned on as a person or vehicle approaches, and off as they pass and move away, per smart grids.
  • Water supplies controlled to respond to usage and breakdowns.
  • Waste that is tracked and recorded, allowing for more efficient recycling.
  • Traffic monitoring that informs commuters of the best routes in real-time.
  • Smart srids that warm sidewalks and roads when icy conditions take place.

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