The Internet of Things (IoT) has become a revolutionary technology in its own right. But expanding your thinking to what happens when you combine IoT with other world-changing technologies can open up even more possibilities.
For example, the partnership between blockchain and IoT could change the way nearly every company in every industry operates on a daily basis. By allowing blockchain to handle the storage of data and the approval of transactions that are currently limited by third parties and troublesome security problems, companies could soon have a new way of interacting with one another.
Here’s how IoT smart contracts using blockchain technology improve on existing processes and why smart contract development should be a priority for companies.
Secure and tamper-proof data records
IoT systems present numerous security risks because of their very nature. When multiple devices are connected on a network, a vulnerability in any one of those devices, or the network itself, could spell trouble for the whole company.
This is the first application where blockchain could make a huge difference. Blockchain is so hack-resistant and tamper-proof that it provides the perfect way to store sensitive data such as proprietary business processes or employee information.
Not only that, but the relatively immutable nature of blockchain helps resolve “chain of custody” issues or similar disputes. Recording and storing IoT data on blockchain using smart contracts gives operators a way to record proof of transactions, monitor changes, and track important information like ownership rights or licensing details.
Fast and efficient transactions
Because blockchain can be trusted as secure, transactions don’t need to pass through a third-party approval process before they can be completed. Eliminating the middleman with smart contracts gets rid of costly and time-consuming steps that frequently disrupt and delay important processes. Take, for example, major business purchases and sales. Could these be streamlined?
Imagine not having to wait for approval on a major bank transaction—a process that can take days, while the account provides no information besides a vague “pending” notification—and instead have a blockchain transaction go through in just seconds? It’s an improvement in security, convenience, and efficiency that requires no compromise of one in favor of the others.
Better still, this is just one of the many types of smart contracts that could eventually be in widespread use. Even more exciting opportunities will be revealed over time as smart contracts are deployed and perfected.