KEY POINTS

  • Internet of Things (IoT) security concerns have been one of the highest barriers preventing widespread IoT adoption. The two major IoT security threats are that hackers could gain control over an IoT device to use it in a malicious way, or that hackers could steal data that will be used to conduct fraudulent activities.
  • According to security experts with whom we have spoken, homes are fraught with the most security flaws, but businesses are the most targeted. IoT startups that produce devices for the home are often focused on getting their product to market quickly, and security isn't a top priority. Businesses are most at risk of attacks by hackers seeking to access consumer data.
  • The FTC has numerous key recommendations for ensuring the security of consumer-facing IoT device makers. These include minimizing the amount of data collected and encrypting the data that is collected. With less collected data, hackers have less of an incentive to attack a system in the first place. 
  • It is inevitable that companies will collect data on IoT usage. Nearly half of IoT companies say they store IoT data for more than a year. But what data is collected and how it is used should be shared with consumers.

Current state of IoT security

Internet of Things (IoT) security concerns have been one of the highest barriers preventing widespread IoT adoption. Business executives, government officials, and consumers are rightly worried that by installing IoT devices within their business, city, or home they are further exposing themselves to a hacker who could:

  1. Gain control over their IoT device to use it in a malicious way
  2. Steal data to conduct fraudulent activities

One of the biggest misconceptions about IoT security is that a hacker's typical goal when hacking an IoT device is to cause harm to the device's user by using the device in a malicious way. Consumers worry, for example, that a hacker could hack a connected oven or a connected forklift in a factory, turning the oven on to try to start a fire or taking control of the forklift to crash it. While there is a real possibility of this occurring — and precedent in the case of a German factory we'll discuss later on — many IoT security experts with whom we have spoken say this [...]