4 min reading

16 November 2022

16 November 2022

Are Blockchain and IoT a Team or a Dream?

Are Blockchain and IoT a Team or a Dream?
Are Blockchain and IoT a Team or a Dream?

The Internet of Things (IoT) is a rapidly growing industry, and some people consider blockchain-based technology as one way to connect low-power machines to the Internet. Blockchain technologies, in general, are over-advertised on the market right now and people are separated in their opinions about the technology. Blockchain consists of distributed ledger technology that stores data in blocks, with each block connected to the previous one through a hash function. Because blockchain is decentralized, data is stored on each network node, so there is no centralized authority to control the data integrity or sort data records. At the same time, IoT networks work in centralized systems, and all the data collected is usually stored in one data storage space. In any way, both technologies are rapidly evolving and lead us to a logical question of whether they will work as a team or stay an unrealistic dream.

Blockchain and IoT: Overview

As we already noticed, in an incredibly rapid technological evolution, the blockchain concept and IoT architecture are becoming exponentially popular. These two technologies are changing how business processes operate. For many, the IoT system now is practically an integral part of everyday life as it supports smart home devices, existing security technologies, and smart devices for supply chain management.

At the same time, blockchain network is much less popular and understood by people. Most people associate the blockchain system with the Bitcoin network, the Bitcoin blockchain, and the ability to earn tens of millions of dollars in a matter of months. Blockchain technologies are becoming more popular among business owners as they can store company and consumer data in a private blockchain. However, in real life, it is not that easy and blockchain benefits are not that extensive.

How Do IoT Systems Work?

The Internet of Things (IoT) network is an innovative way of connecting different pieces of equipment and systems to make their interactions more efficient. These systems collect data from the devices they connect to, such as sensors or IoT applications. Massive data amounts undergo through the IoT systems daily, so IoT resources should be powerful enough for successful data processing. Regardless of whether you have small or huge IoT ecosystems, they need to be secure, reliable, and with advanced encryption methods.

IoT devices generate huge streams of data and require sophisticated data management systems and tools. This data needs to be organized, stored, and associated with other data sources for accurate analysis. Moreover, these systems must be secure and protected from hacks, so that data privacy regulations are not violated. So basically, data processing in IoT systems relies on the analysis of collected data in order to provide insights and determine actions to take. Incoming data from sensors is usually in the form of sequential or time-series data. These data are tagged with a time stamp from the originating entity or gateway. Afterward, they are funneled through different functional modules to process and store data, such as events and alerts.

The Way Private and Public Blockchain Operates

Let’s take a look at how blockchain operates. At its core, blockchain solutions have a completely different goal installed. An incentive system is an essential component of any blockchain platform. It is the mechanism that encourages the communities of participants to cooperate and create value. These incentives can be monetary or non-financial rewards but usually, they are still connected to a certain kind of financial benefit. The most effective incentive schemes usually provide both short-term and long-term rewards, which seem over-appealing for many people and serve as a driving force for choosing blockchain IoT devices. However, smart contracts and blockchain technology in general are not always consistent with the overall goal of the system.

Identifying participants for a blockchain operation is another crucial part of setting up a blockchain application. The key to ensuring that the network’s operations are secure and that transactions in cryptographic hardware are authenticated and verifiable is determining who is empowered to use the network. Moreover, permissions enable organizations to control network participation and comply with data protection regulations and avoid security flaws. Identifying participants for a blockchain operation requires defining the kinds of financial transactions that will be submitted to the network, as well as the criteria and validation rules for these transactions. At the same time, blockchain technology is sometimes a subject of malicious software invasion and that’s why tightly related to security risks.

How Does the Combination of IoT and Blockchain Work?

Blockchain and IoT are both emerging technologies that aim to revolutionize business, the process of data stored, and the immutable data chain. Both are able to improve business processes by removing intermediaries and increasing the speed of transactions. The elimination of intermediaries could lead to a significant reduction in costs, which is the decision-making point for most customers.

Total transactions on the blockchain and IoT are checked and entered into encrypted distributed ledgers, which can be shared across nodes. This prevents disputes and strengthens trust among authorized users of the network. IoT combined with blockchain technology allows intelligent devices to operate independently. The second feature of this tandem is tracking devices’ communication between themselves. Although blockchain is architecturally beneficial, it has a problem for IoT because its client servers are primarily used as hubs and proxies in the IoT, which can be a barrier to smooth blockchain-IoT operation. Going from this, for an effective blockchain-IoT framework, an IoT platform must have decentralization to allow for compatibility with blockchain networks. The creation of a such structure can pose a difficulty because IoT integration into a decentralized system may appear to be complicated and slow down computing power.

Challenges Encountered while Implementing Blockchain in IoT

There are several challenges associated with the implementation of blockchain technology in the IoT. These include Immutability, Scalability, and Data Security.


The immutability of blockchain protocol has raised concerns in recent years due to General Data Protection Regulation (GDPR). This regulation requires companies to track the assets they store in order to protect their customers. Large companies may have thousands of manufacturing suppliers and millions of clients and need to digitalize and automate their processes in order to be compliant. The implementation of IoT blockchain technology in the grand business sector can create unnecessary IoT security issues and security challenges, which are likely to result in increased costs.


Scalability is another issue that can arise with blockchain. Because the technology requires a large amount of computation power, blockchain has a high potential to slow down the network. This can cause some issues for IoT implementation, particularly if it is done with a large number of devices. Many IoT applications require immediate data transfers, and blockchain implementations may take too long to complete these transactions.

The storage and scalability of blockchain applications are still debatable. The scalability of blockchain is a major concern for IoT apps, as IoT devices are capable of producing GBs of IoT data in real time. Furthermore, some blockchain implementations can only process a few transactions per second.

Security Issues

One of the major non-technical challenges in creating blockchain-IoT tandem is the need to ensure that sensitive data remains private and people who access control are authorized. In order to secure data, it needs to be shared between parties in an effective manner. This requires a high level of trust to be established between all stakeholders. However, when we are talking about tech giants, it can be a real challenge because their IoT data is usually connected to financial institutions, transaction history, and other highly sensitive areas of operation.

So, a critical piece of this puzzle is the availability of secure network connectivity while sending data on device identification, smart contracts, and other highly important information. Whether you use a local area network or a global Internet connection, you’ll need a reliable link to connect all the devices in the IoT-blockchain ecosystem. Since this network connection must be dependable and fast, poor or slow connections can pose a serious challenge.

Another data security challenge is the lack of universal security standards. Many connected devices are not secured and encrypted enough by themselves and when integrated into the Internet of Things and blockchain at once can be even more easily compromised. This lack of security makes IoT devices vulnerable to brute-force attacks. This is dangerous since successful breaches can let hackers access control of all devices in the network.


Blockchain is an emerging disruptive technology, but one of its biggest drawbacks of it is the lack of privacy. Despite its transparency and permanence promoted, the privacy of blockchain transactions remains a significant obstacle to its widespread use. Blockchain transactions are stored in a publicly distributed ledger and are linked to an account address. While this is useful for security purposes, it does not provide enough assurance for users because they don’t know who is on the other end of the line.

Lack of Interoperability

Interoperability between blockchains is a key feature for organizations because this will make it easy to share and exchange information across different platforms. Creating standards and specifications that will allow these blockchains to communicate with each other is an important first step and technology is only on its way to it. But it is important to note that blockchain interoperability will require many years of hard work. It is imperative to make sure that networks are connected as much as possible in order to be effective. This can be done by implementing protocols that provide a common language and infrastructure across various blockchains. Interoperability will be a significant issue in the coming years and so it can be called one more barrier to integrating blockchain into the Internet of Things.

Ways to Mitigating IoT Risks in Blockchain Technology

For IoT ecosystems to be smoothly operated the abovementioned risks are needed to be handled. No doubt that it is important to ensure that IoT devices are properly tested before integrating with the blockchain and are not a subject of physical tampering. At the same time, it is equally important to ensure that data verification and encryption are secure from the blockchain end as well.

Another approach to overcoming the limitations of the IoT-blockchain framework is to integrate it with cloud computing giving access by verifying digital signatures. Cloud computing generally uses a centralized architecture, which ensures reliable sharing when multiple participants use the service and is perfectly compatible with the Internet of Things. One more approach involves fog computing, which seeks to bring the control hub closer to the end devices. In addition to using the blockchain as the platform, fog computing uses more powerful devices, such as gateways, edge nodes, and cloud infrastructure. However, the process of “smoothing” the integration of the whole IoT industry into a blockchain can become so complex that will not justify either costs or efforts.

Does the Blockchain have any Future with the Internet of Things?

Blockchain can seem an appealing technology to try for many people, especially, with all the benefits promised. However, when we are looking at the options for integration and related complications, a reasonable question to ask is why we need to spend time, money, and effort on it. Blockchain technology may even not be a bad thing to try by itself when you want to play with cryptocurrency, NFTs, and other stuff. But when you want a stable operation of your business, devices, and the Internet of Things, it is way better to use more reliable technology.

The IoT can connect many things globally, including buildings, vehicles, and people. One example is the creation of smart city neighborhoods. Currently, IoT is most prevalent in manufacturing and transportation, as well as utility organizations. However, it is expanding to many other sectors. As technology is becoming more advanced, more companies are implementing it to enhance their business and increase revenue.

What is the TEKTELIC Position on this?

TEKTELIC as a global IoT provider for many years now is focused on reliability. Our gateways, devices, and solutions are based on the LoRaWAN technology. LoRaWAN technology offers long-range wireless communications for a variety of uses. LoRa devices are often mobile and moving, and can be used for asset tracking. LoRaWAN also has low-power sleep modes for as long as the application specifies to have extensive battery life and be really low on energy consumption.

LoRa’s long-range capabilities enable it to be used for smart metering, smart cities, and other Industrial Internet of Things applications, providing security, reliability, and efficiency. This technology is an alternative to expensive cellular connections and Wi-Fi networks and can penetrate buildings and underground rooms. It can also be used for smart metering, providing accurate real-time usage data.


TEKTELIC has a range of products for a variety of uses operating on LoRaWAN protocol. Especially, we are proud of our indoor and outdoor LoRaWAN gateways as they allow two-way communication with devices and users to set up the frequency of sending data updates, actions triggered, and so on. TEKTELIC has KONA Macro IoT Gateway for outdoor deployments and KONA Micro IoT Gateway for indoor deployments. We have many others in our portfolio as well, but these appear to be the most popular in the market.

KONA Macro IoT Gateway

KONA Macro IoT Gateway is a perfect product for enterprises and smart city projects. It can be deployed outdoors, is resistant to weather changes, and has various mounting options. With plug-and-play installation available, you will also reduce set-up costs. KONA Macro IoT Gateway has an integrated band-pass filter, so the surrounding noise will not disrupt message delivery. With all these features, this gateway is a truly unique outdoor connectivity option.

KONA Micro IoT Gateway

LoRaWAN indoor gateway, which is KONA Micro IoT Gateway is super small in size, easily deployable in any indoor environment, and provides “Always On” connectivity. What is more, it has 4 hours of battery backup and keeps receiving and transmitting the data even in case when the main power source is off. It also allows for plug-and-play installation and is compatible with any LoRaWAN end-to-end solutions.

Short Summary

The use of RFID tags, sensors, and smart beacons has already revolutionized a number of industries. They can prevent delays, improve output, and reduce equipment downtime. IoT is also making its way into healthcare, where the possibilities for connected devices are almost endless. At the same time, blockchain is driven by some blinding idea of making more money, which is not completely explained or reasoned. Answering the main question, of whether IoT and Blockchain are a team or a dream, we should say it’s a dream. It is a dream many people want to be real and that is why willingly fool themselves about the endless possibilities of technology. But if you want something that really works and what’s proved to work well – choose LoRaWAN.

From our end, the TEKTELIC team will answer all the questions you have on the LoRaWAN technology. Contact us via the inquiry form, and let’s make something real!

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