KEY POINTS

  • Blockchain is emerging as a key tool with numerous applications throughout the IoT. Companies are developing innovative solutions that use blockchain to cut costs and improve services.
  • The unique properties of blockchain allow data from IoT devices to be collected, stored, and shared in new, simpler ways.
  • Blockchain is poised to transform practices in a number of IoT sectors, including:
    • The supply chain: Tracking the location of goods as they are shipped, and ensuring that they stay within specified conditions.
    • Asset tracking: Monitoring assets and machinery to record activity and output as an alternative to cloud solutions.
    • Health care: Enabling logging and sharing of medical data between numerous stakeholders with versatile permissioning, directly holding some data while offering encrypted links to other information.
  • While solutions address a number of potential pain points in the IoT, several challenges exist that could hold back widespread adoption. These issues include blockchain’s complexity, companies’ loss of control, regulation, and hardware requirements.
  • Blockchain is poised to provide a new, powerful tool for companies developing and implementing IoT solutions, offering increased versatility, security, and efficiency.

Introduction

Blockchain isn't just for bankers anymore. Most of the buzz around the distributed ledger has focused on its uses in finance, where it originated (see BI Intelligence's recent Blockchain In Banking Report). But one of the most promising blockchain trends is its growing relevance to the IoT. Firms developing blockchain technologies have raised more than $1.55 billion since 2012 in venture funding, according to CB Insights.

Blockchain is a shared, distributed database that acts as an immutable ledger, recording events or transactions and verifying them across a number of independent participants. That makes it well suited to tasks like tracking goods as they move and change hands in the supply chain, monitoring the location and condition of assets like industrial machinery at remote work sites, or storing medical data. In some cases, devices use blockchain to become economic actors, making entries in a distributed database that trigger transfers based upon conditions. In others, blockchain allows portions of operational data to be shared with stakeholders in settings ranging from manufacturing plants to doctors' offices. 

In this report, BI Intelligence looks at the developing role of blockchain in the Internet of Things ecosystem. First, we look at how blockchain works, both generally and as part of [...]