Blockchain technology has found a sweet spot in the Internet of Things (IoT), a recent study has found. The study revealed that 75% of leading companies now rely on blockchain technology and IoT, with enhanced security and trust being the key reasons for the integration.
The study by global research firm Gartner stated that blockchain integration with IoT is moving at a faster rate than expected. The study, which involved 500 top U.S. companies found that three-quarters were already applying blockchain and IoT into their operations or plan to do so by the end of 2020. Among these adopters, 86% are combining the two technologies on multiple projects.
The study revealed that the pharmaceutical, energy, healthcare and transportation industries lead in blockchain adoption.
Gartner pointed out that the adoption is significant, especially given that blockchain technology is at the trough of disillusionment in the hype cycle. This is the stage that comes immediately after the peak of inflated expectations, which in blockchain’s case, was in late 2017 and early 2018. The trough of disillusionment is usually the lowest point for any technology and is marked by actual expectations and not mere speculation.
The study by the Connecticut-based firm further states:
“Blockchain networks have emerged as a promising innovation because of their ability to affirm the integrity of data shared among constituents in multiparty process collaboration. IoT has emerged as a method for bridging the gap between resources (or “things”) and their associated business processes. Integrating IoT and blockchain supports trusted multiparty processes that bridge physical world things to business process computing environments.”
Improved security and trust are the key reasons many of the companies are integrating blockchain with IoT, accounting for 63% of the adopters. 56% of the surveyed companies cited lower costs and increased business efficiency as the reasons for adoption. For 43% of the surveyed companies, the pivot to blockchain and IoT is to increase their revenue and business opportunities. Only 37% chose improved participant experience.
Gartner cautioned that while the integration of blockchain with IoT is on a rapid rise, it’s still immature and will likely take at least a decade to mature. The volatility that comes with blockchain implementation, such as protocol changes, is one of the major challenges facing this industry. Some blockchain implementations also struggle to scale and meet the transaction rates, especially given the vast number of transactions that IoT devices generate.
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