For organizations interested and investing in IoT, connecting devices are just the beginning. It’s not just reliable connectivity and storage they need. It’s not just a standardized communication model to process billions (perhaps trillions of) microtransactions between devices.
It’s not just efficiencies and cost reductions to support sustained service business models (over product business models). One of the single most important enablers of IoT adoption is trust: the ability for all stakeholders to trust that objects, infrastructure, people and data are as secure as possible.
Although blockchain is but one of many tools in the broader landscape of digital transformation, its potential to enhance security is notable. Below are four ways blockchain technologies or applications could help augment IoT security.
The most immediate potential security-related benefit blockchain offers IoT is its inherent decentralized architecture. A blockchain is a peer-to-peer communication model where transaction information is distributed and immutably recorded across all nodes on the network.
Whether private or public blockchain architectures, there is no single centralized hub. What this means is that the penetration or failure of any single node will not cause the broader network to collapse. If a malicious actor wishes to take down a network that runs on such a consensus model, they must penetrate at least 51% of the nodes on the network -- often a far costlier and logistically unfeasible option than any potential reward would justify.
Authentication and access
Another security enhancement made possible by blockchain’s very architecture is the difficulty and transparency that renders tampering with data riskier to exposure. In traditional IT architectures, once a hacker penetrates a firewall, account, system, or other defense, "they’re in". That is, once they’ve broken in, what tampering takes place often goes unnoticed and is rarely recorded. In a blockchain architecture, any transaction involving the data is recorded on the ledger across all nodes, for all to see.
Transactions aren’t just financial; any action created by the participant in the system is a transaction event. This means that any and all malicious activities, especially those with real impact, would be visible and potentially attributable.
While not new or unique to blockchain, cryptography and digital signatures -- which are an inherent part of blockchain architecture -- offer an embedded layer of security compared to traditional database architectures. All transaction data must be cryptographically secured using encryption and digital signatures.
Furthermore, research and development supporting cryptographic standards, smart contracts and related technologies underlie the development of the entire blockchain market given their relevance to identity authentication and privacy protection.
Supply chain transparency
Blockchain impacts a number of use cases across the supply chain, some of which could potentially enhance security of IoT devices. Given the technology’s distributed, immutable and transactional nature, many organizations are looking at blockchain for tracking provenance, as a product travels through each phase of its lifecycle.
From registering parts, sourcing, pricing, location, environmental data, interactions with each party, ownership, compliance, counterfeit, etc., what is opaque and fragmented today would effectively have visibility and accountability "baked in" with every interaction. From a security standpoint, this could be relevant in times of product recall, fraud or dangerous counterfeit, assessment of security patches or updates, even outreach to end users in the event something has been compromised.
While no single technology, blockchain or otherwise, will ever be the "silver bullet" for securing our physical and digital worlds, a distributed, immutable ledger technology may help address or enhance various vulnerable spots in the network.
Our analysis finds it reasonable to assert that if blockchain is implemented at scale, it could be a true breakthrough in security technology because the architecture allows users to trust the result that the network provides, even if some of the participants in the network are malicious actors.
The notion that in a world of constant and increasingly sophisticated cybercrime, we can have a reliable and resilient network infrastructure (even if some of the players are corrupt) is a revolution in trust enabled by technology.