IoT Enterprises are Prioritizing Blockchain Technology
While blockchain is most commonly associated with cryptocurrencies and nonfungible tokens (NFTs), the promise of the technology in IoT has not been lost by many service providers and enterprises, according to Omdia. In fact, 40% of enterprises surveyed say that blockchain is a “priority for the future” for their IoT deployments. Enterprises point to key uses cases that include supply chain logistics and monitoring, tamper proof-records of transactions, smart contracts, and to a less degree, payment processing, and money transfers.
“With increased focus on Sustainable Development Goals, enterprises are looking for tools to help them better audit and interrogate their supply chains. The connectivity of IoT solutions coupled with the security, immutability, and transparency that blockchain can provide is very appealing,” said John Canali, IoT Principal Analyst at Omdia.
However, despite the clear enterprise interest in blockchain, Omdia believes the technology must further evolve before it is ready for rapid adoption in IoT. “Probably the limiting factor is simply the complexity of blockchain technology. Not only is blockchain conceptually complex, but it is also technically complex and there are different varieties of blockchain solutions with different attributes. As such, enterprises will need to establish internal expertise before adopting it widely in their organization,” added Canali.
This added complexity is especially noteworthy because it runs contrary to the simplicity that many IoT enterprises require. In fact, when Omdia surveyed enterprises on their key challenges around IoT adoption complexity was noted as one of the top 3 pain points. Nonetheless, Canali is optimistic about the future convergence of these two transformative technologies. “Blockchain is evolving very quickly and addressing inefficiencies in the technology. For instance, in a short amount of time, stakeholders have addressed issues around the massive amounts of energy used to mine blockchains. Omdia believes this progress will continue and allow the technology to see wider implementation in IoT.”