Blockchain IOT for Less Vulnerability and More Efficiency
IOT Cryptocurrency

IOT Cryptocurrency | Blockchain IOT for Less Vulnerability and More Efficiency

Editorial Team Avatar
Nov 11, 2022
14 min reading time

The fear that our entire world is built upon faulty information is more accurate than ever. And to tackle this issue, scientists have started to look for a more efficient economic environment by combining blockchain, IoT, and cryptocurrency into trustless systems

Trust is an essential concept that stands at the base of all human interactions and transactions. However, it weakened to the point where a technology such as IoT needs help finding large-scale implementations on its own. 

The Identity of things and the cost of verification are some of the biggest concerns regarding this technology. But as we will see, blockchain is coming as an enabling platform. 

SIDENOTE. Trustless system – a system in which the participants do not need to know or trust each other or a third party for the system to function. 

SIDENOTE. Identity of things (IDoT) – an identity management model that involves assigning unique identifiers (UID) with associated metadata to devices and objects (things), enabling them to connect and communicate effectively with other entities over the Internet. 

What is IOT? 

IoT, short for the Internet of Things, is a network of connected devices that gather and share data about how they are used and the environment in which they are operated.  

Through the connection of devices, IoT enables communications and interactions such as: 

  • Human to device
  • Device to device
  • Device to service

With every physical device containing sensors, the data about their working states can travel to an IoT common platform. 

The IoT common platform also provides a common language for every device to communicate with each other. So once the data is on the platform, it is integrated and structured to be further requested as valuable information. 

In fact, today’s technology already offers carriers for IoT to be implemented all over the world. And Satellite, Wi-Fi, Radio Frequencies, Radio-Frequency Identification, Bluetooth, and Near Field Communication are just a few of them. 

IOT Use Cases 

More and more devices are connected through smart sensors generating massive data streams that enable new opportunities. Therefore, businesses from all sectors saw the potential of IoT and started finding applications for it. 

Smart Watches and Fitness Trackers 

Imagine that: It’s winter, and it’s freezing outside. You parked your car three streets away. Walking through there sounds insane, so you tell your watch to bring the vehicle in front of the office and warm up the house before you get home. 

That may sound like the sci-fi future wearable devices are heading toward. But actually, the technology is already here.  

Wearable devices such as smartwatches and fitness trackers are some of the most popular current applications of IoT. They are used chiefly for particular functions such as checking the time and tracking exercises. 

Usually, the wearable devices involved in IoT typically communicate with an app installed on a personal computer or a mobile device. And besides fitness tasks, they are virtually able to complete complex tasks such as making calls, operating the internet, managing finances and payments, or manipulating home appliances

However, wearables are often impractical for tasks compared to desktop or mobile devices. And that’s mainly due to the small screen size. Additionally, the more functionalities they have, the less their battery will last. 

Although the technology to command most of your possessions exists, it requires a network connection and compatible software. And that’s a big issue because different devices are built with incompatible technology by companies with no incentive to offer integrations with rival products. 

Smart homes 

The total number of connected devices on the planet is expected to rise into the tens of billion by 2025. This includes smart home safety, security systems, and smart home energy equipment like smart thermostats and smart lighting. The top benefit of smart homes is convenience, as more connected devices can handle more operations and perform tasks in your place. Furthermore, smart home IoT devices can help reduce costs and conserve energy.  

However, smart home devices are more expensive than their non-connected counterparts, and most of the time, they don’t mix well if they are not from the same producer.  

Autonomous and Connected Vehicles 

Another sci-fi scenario we’ve seen in movies is driverless cars. Having your car drive you to the airport and then going back home on its own is a dream that might soon come through thanks to 5G and IoT. 

Through real-time Internet connectivity in vehicles, automotive companies can release real-time software updates. Also, they can use data from the cars to analyze their performance, obtain valuable data on how drivers use their vehicles, and develop improvements. 

Sensors would allow vehicles to communicate between them and avoid bumping into each other. Also, the car provider could diagnose malfunctioning components or software bugs before the car breaks down or causes an unfortunate event. 

But before turning this scenario into a reality, some issues need to be solved. 

Some potential problems in today’s systems could be fatal for autonomous car users. In May 2016, Tesla’s car failed to distinguish a white tractor-trailer crossing the motorway against a bright sky. Before the technology is released, it needs to be fail-proof. 

Another problem is the mapping. A driverless car would need completely enhanced maps to navigate the streets as a human driver could. And even with completely enhanced maps, a driverless car would still need to be able to deal with dynamic obstacles, such as cars and pedestrians. 

Supply Chains of the Future 

Regarding the Supply Chain, IoT allows warehouses and fleet managers to keep track of their cargo and inventory more efficiently. 

It offers real-time location tracking so real-time data regarding the product’s location and the transportation environment can be tracked coherently and prevent shipping errors. Also, supply chain managers can track the shipment process through environmental sensors. The temperature inside the vehicle, pressure, humidity, and other factors that could compromise the product’s integrity can all be checked in real-time.  

In supply chains that involve the same company, IoT solutions do magic. But when multiple international companies have different financial capabilities, the complexity factor breaks the spell.  

Let’s take this situation where a meat producer uses advanced IoT solutions that communicate with the supermarket it delivers to. Still, the transportation company does not invest in such fancy stuff. The truck’s refrigerator heats up on the road because of some error, and the meat rots inside the container. The driver notices the cooler is off and refrigerates everything before the destination. At the destination, the supermarket takes the container without noticing anything.  

According to the IoT solution, the meat left the producer frozen and arrived at the supermarket frozen, but the food remains spoiled. In the best-case scenario, one of the supermarket’s employees notices the problem and alerts the management before the packages reach the shelves. In the worst-case scenario, some consumers will get sick, and the supermarket, and most likely the meat producer, will go through a crisis that will seriously affect their sales. 

IOT Vulnerabilities 

“We’re sweeping every wirelessly accessible camera on the planet. Cell phones, laptops. If it’s connected to a satellite, it’s eyes and ears for us,” says agent Phil Coulson in Avengers. 

Although it’s a quote from a movie, the fact remains that your IoT devices can be hacked, and the most common backdoor is your internet router. 

One of the best resources to understand serious IoT security threats is OWASP’s Top 10 IoT Vulnerabilities list:  

  1. Weak, Guessable, or Hardcoded Passwords – Using easily brute-forced, publicly available, or unchangeable credentials, including backdoors in firmware or client software that grants unauthorized access to deployed systems.  
  2. Insecure Network Services – Unneeded or insecure network services running on the device itself, especially those exposed to the internet, that compromise the confidentiality, integrity/authenticity, or availability of information or allow unauthorized remote control.  
  3. Insecure Ecosystem Interfaces – Insecure web, backend API, cloud, or mobile interfaces in the ecosystem outside the device that allows compromise of the device or its related components. Common issues include a lack of authentication/authorization, lacking or weak encryption, and a lack of input and output filtering.  
  4. Lack of Secure Update Mechanism – Lack of ability to securely update the device. This includes a lack of firmware validation on devices, a lack of secure delivery (un-encrypted in transit), anti-rollback mechanisms, and notifications of security changes due to updates.  
  5. Use of Insecure or Outdated Components – Use deprecated or insecure software components/libraries that could allow the device to be compromised. This includes insecure customization of operating system platforms and the use of third-party software or hardware components from a compromised supply chain.  
  6. Insufficient Privacy Protection – User’s personal information stored on the device or in the ecosystem that is used insecurely, improperly, or without permission.  
  7. Insecure Data Transfer and Storage – Lack of encryption or access control of sensitive data anywhere within the ecosystem, including at rest, in transit, or during processing. 
  8. Lack of Device Management – Lack of security support on devices deployed in production, including asset management, update management, secure decommissioning, systems monitoring, and response capabilities.  
  9. Insecure Default Settings – Devices or systems shipped with insecure default settings or that lack the ability to make the system more secure by restricting operators from modifying configurations.  
  10. Lack of Physical Hardening – Lack of physical hardening measures, allowing potential attackers to gain sensitive information that can help in a future remote attack or take local control of the device.” 

Combining Blockchain and IOT 

IoT systems are dependent on centralized architectures where the data is sent from devices to the cloud. But as a centralized system can only scale so far, in a world of complex networks, it would require much more processing and coordination happening in the network.  

With peer-to-peer coordination, it would reduce bottlenecks and centralized security vulnerabilities.  

The more efficient way for IoT environments would be to have decisions, processing of data, and resource sharing happen locally between devices on demand. 

The blockchain is promising for IoT by providing assurance the data is legitimate and that the process through which the data is put into the database is well-defined. 

Blockchains can identify devices as unique entities in a precise and immutable way. By hashing or using non-fungible smart contracts, the data stays resistant to any alterations. Also, through distributed ledger technologies, the hacking or altering of any records would be significantly more challenging than with a centralized system. 

Decrypting the system by getting a single member’s authentication is impossible. The system remains intact even when one party is compromised and usually continues working. 

The Blockchain IoT combination reduces the cost of identification significantly. A decentralized approach to IoT networks could solve many current issues. By adopting a standard peer-to-peer communication model to process numerous transactions, the cost of installing and maintaining large, centralized data centers will be reduced significantly. 

The computational power needed across devices would also be drastically reduced by handling decisions, data processing, and sharing locally.  

The high level of decentralization would also prevent the failure of every node in the network from shutting down the whole system. 

IOT Cryptocurrency for efficient environments 

Blockchain IoT solutions would enable trustless secure messaging between devices. In an IoT blockchain, the messages would be treated the same as financial transactions in the Bitcoin network.  

To further improve the system, devices could automatically demand resources from one another in a micropayment system. But for it to work, it needs meager fees and very high transaction speed. Therefore, having a third party approve every request is out of the question. 

A device with excess resources, such as an excess in storage capacity or electricity, could sell it to another device that needs it, creating a balancing system based on an IoT cryptocurrency.  

Overall, a device functioning on the network will automatically plug in the network offering its capacities and receiving tokens in exchange.  

However, this kind of network needs a permissionless innovation layer where anyone can start participating and contributing. But this will create security, privacy, and financial issues that only blockchain is well suited to face. 

One of the most notable projects within the blockchain IoT mix is Iota.  

What is Iota 

Distributed technologies like the blockchain are the missing link to settle the IoT’s scalability, privacy, and reliability concerns. However, the blockchain, in its current state, still must evolve to meet expectations. 

Yet, projects like Iota come with new propositions for distributed ledger technologies. 

Iota aims to be the distributed network protocol that enables a machine economy in which every device can be leased when idle.  

The main innovation behind Iota is the “Tangle “- a new distributed design that is scalable, agile, and makes it possible to transfer value without fees. Iota takes advantage of a network of users and nodes that are asked to perform small proof of work operations to validate the previous two transactions.  

Iota enables a whole new realm where anything with a chip in it could be leased in real-time. 

In addition, Iota started collaborating with Bosch to develop the XDK Cross Domain Development, as well as with Jaguar Land Rover

Other Projects 

Iota is not the only IoT cryptocurrency project out there. Some other prominent projects are MXC, and IOTEX. 


MXC, short for the Machine Learning Exchange Coin, aims to combine the potential of blockchain IoT with the capabilities of LPWAN. MXC’s goal is to minimize data collisions between devices that mostly operate on the same frequencies by using the MX Protocol. The MX Protocol enables a network of LPWAN gateways to prioritize communication between participants and incentivize the secure collection and distribution of data gathered from IoT sensors. 

SIDENOTE. LPWAN – The Low Power Wide Area Network is a class of wireless technologies that enables low power consumption and long-range wireless connectivity ideal for low bandwidth and low latency IoT applications 


IoTex is a privacy-IoT blockchain that aims to power the Internet of trusted things. It is a decentralized network where all physical and virtual things can freely exchange information and value on a global scale.  

IoTex has identified several challenges that prevent the mass adoption of IoT. Scalability, lack of privacy, high operating costs, and lack of functional value are just a few.  

The company wants to solve these issues by providing a unique randomized delegated proof of stake consensus mechanism and a side-chain architecture. The core idea is the separation of duties. It means that different side chains will be created for each separate function which would still be able to interact with each other. 

Key Takeaways 

  • The Internet of Things represents a network of connected devices that gather and share data about how they are used and the environment in which they are operated. 
  • IoT finds futuristic applications in many industries but still needs improvements. Some of its capabilities materialize in wearables, smart homes, automotive, and supply chains. 
  • Although promising, IoT faces mass adoption resistance because of privacy and security concerns. 
  • Blockchain IoT comes with better Identification and security assurance capabilities and reduces the risk of an IoT environment failure caused by centralization. 
  • IoT cryptocurrencies enable a system of micropayment in which connected devices can exchange excess resources on demand. 
  • Besides Iota, some other prominent Blockchain IoT projects are MXC, and IOTEX. 
* The information in this article and the links provided are for general information purposes only and should not constitute any financial or investment advice. We advise you to do your own research or consult a professional before making financial decisions. Please acknowledge that we are not responsible for any loss caused by any information present on this website.
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