IoT and blockchain technology are just entering the world of digital transformation. Businesses across industries are only beginning to adapt to such emerging technology and are still in the early stages of the learning curve. Innovation is expected to be ‘groundbreaking’ given its ability to connect the world and smart devices are the next stage of connectivity.
It is estimated that there will be over 40 billion smart devices by 2025 and is projected to grow further with an additional 100 billion smart devices existing by 2050. Widespread blockchain technology can come from many places and if IoT is to fulfill its potential, businesses need to consider their level of data security.
Blockchain – What is it?
Blockchain technology refers to a system that records information in a way that makes it nearly impossible to change, hack or manipulate. The term ‘blockchain’ is referred to as a ‘digital ledger’ of transactions that is distributed across the entire network of computers on a blockchain.
Each block in the chain consists of a number of transactions. Each time a new transaction is made a record is added to every participant’s ledger. Blockchain technology can also be considered a type of Distributed Ledger Technology (DLT) where transactions are recorded with an immutable cryptographic signature called a hash.
Blockchain and IoT – How can it be applied?
IoT networks can process data across numerous devices administrated by a variety of organizations. This creates a challenge when working back to identify any sources of data leakages or breaches in case of any type of cyber-attack. Ideally, IoT generates large volumes of data with unclear ownership of data.
By applying blockchain technology, businesses can eliminate the security and scalability concerns associated with IoT by:
- Adding a layer of security by using a blockchain solution, adds a layer of security that hackers will need to bypass. By using blockchain, businesses can benefit from a robust level of encryption.
- With blockchain technology, enterprises are able to cut costs by removing processing overheads related to IoT gateways (hardware or communication overheads).
- Blockchain opens doors to fast processing of transactions and coordination between a million devices. With the growing number of interconnected devices expected to grow, a distributed ledger technology is the answer to support the processing of large number of transactions.
Blockchain and Telco’s
How can telco’s capitalize from such technology?
With blockchain technology, the benefits telecom’s and CSP’s will obtain include simplified processes, cost savings, new revenue streams improved collaboration, and real-time transparency. In addition, specific features of blockchain technology will allow the telco industry to resolve industry challenges such as delays in dispute resolutions, maintenance of complex agreements, data privacy, and much more.
Research conducted by Infosys highlights 5 existing use cases of blockchain technology in the telco industry:
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