Companies have found that IoT partners well with a host of other popular enterprise computing technologies of late, and blockchain – the innovative system of distributed trust most famous for underpinning cryptocurrencies – is no exception. Yet while the two phenomena can be complementary in certain circumstances, those expecting an explosion of blockchain-enabled IoT technologies probably shouldn’t hold their breath.
Blockchain technology can be counter-intuitive to understand at a basic level, but it’s probably best thought of as a sort of distributed ledger keeping track of various transactions. Every “block” on the chain contains transactional records or other data to be secured against tampering, and is linked to the previous one by a cryptographic hash, which means that any tampering with the block will invalidate that connection. The nodes – which can be largely anything with a CPU in it – communicate via a decentralized, peer-to-peer network to share data and ensure the validity of the data in the chain.