We’ve seen what happens when people start experimenting by putting sensors and software into household items. Nowadays, it’s perfectly possible to activate your toaster, lock your door, and turn off your lights right from your smartphone. 

But what if we tell you that this technology stands to gain a lot more with the integration of the blockchain? Combined, the blockchain and IoT have the potential to push the boundaries of the crypto space very quickly. Before we delve any further, let’s first break down what the Internet of Things (IoT) is. 

What is the IoT?

The Internet of Things concept came about as early as 1982 when a Coca-Cola vending machine was integrated into the ARPANET. This allowed connected users to check whether the drinks inside were at the right temperature or whether they needed to order a restocking. 

The term IoT would only be used later in 1985 when Peter T. Lewis spoke to the Congressional Black Caucus Foundation during their 15th Annual Legislative Weekend. According to Lewis, the Internet of Things is defined as “the integration of people, processes, and technology with connectable devices and sensors to enable remote monitoring, status, manipulation, and evaluation of trends of such devices.” 

In simple terms, he describes an interconnected network of devices all working together to give users a more immersive and data-driven experience.

What role does the blockchain play in the IoT?

Now that we have a better understanding of where the IoT came from and what it’s meant to do, it’s time we discuss how the blockchain can help improve and assist in developing the potential of this technology. 

To help get everyone on board, let’s first discuss what the blockchain is. 

The blockchain in a nutshell

In its most basic form, the blockchain is a type of distributed ledger.  All deals on the blockchain are taken note of and added to a record of all the transactions that each participant will have a copy of. 

This model allows the blockchain to make it nearly impossible for people to alter data or hack systems. This is what makes the blockchain, and distributed ledger technology in general, so secure. 

The Blockchain and IoT

The ultimate goal of combining these two technologies is to distribute and connect multiple people and devices. The effect of this combination would mean that the distribution of ledgers can be combined with the distribution of devices over a network, placing itself in between the devices and ensuring that the right conditions are met. 

This will also give the Internet of Things the security normally found in the blockchain by applying the distributed ledger model to the connection history of devices. 

For the IoT, this means improved gadget compliance and cost-efficiency, further aiding business integration and adoption thanks to the smart contracts available in the blockchain. The potential found in the blockchain technologies present now have made their integration into the IoT a priority for research firms and financial institutions. 


In essence, it’s all about how the distributed ledger system can be applied to the distributed network of gadgets or devices. The hope here is to transform the digital business and the financial industry into something much more efficient and secure. The potential impact is big enough that some individuals see this as a bigger deal than the Internet itself. 

Imagine owning a business selling food products. One potential application in this scenario would be using IoT-enabled devices to track your items and monitor the state they are in. Similarly, businesses shipping consumer goods like household appliances can use these devices to track packages as well as monitor them for damage. 

Micro-mining cryptocurrency

One of the more popular theorized applications is by using the interconnection of devices to help mine cryptocurrencies. The aim was to both mine small amounts of cryptocurrency while also helping lower costs. 

This can happen with any of your devices—IoT-enabled appliances and devices (e.g., smartphones) all work together to mine cryptocurrencies during the times they are idle. While they might not earn a lot, they could at least mine enough to offset costs and expenses.

Unfortunately, this has proven to be an impractical approach with the technology we currently have. The hope is that in the future, developments in IoT and the integration of the blockchain can help speed up the adoption of cryptocurrency. 

Challenges to integration

Currently, the most limiting factor for this technology would be the battery life of IoT-enabled devices. The energy consumption of a blockchain-integrated IoT would drastically reduce the operating time of portable, handheld devices.

The reason for this energy consumption is the bandwidth and computing power needed for blockchain transaction systems. This is the same reason that a lot of smaller devices can’t participate in this project, since they are limited to small microcomputers and microcontrollers. 

Security risks are also present with non-smart devices. If their operating system isn’t updated, they may not be able to secure themselves from hackers, creating a liability in your network security. 

It’s not all bad news, though. There have been suggested solutions, one of them being to divert computing to server-based infrastructure, which would lessen the load on individual devices. This solution would solve both the energy consumption and computing-power issues. 


It can’t be denied that the potential of this technology is huge. The problem isn’t about the willingness of people to test or use it—it’s the fact that our current technology is not ready for adoption. The important part is investing in infrastructure that is capable of running the system and cooperating with the IoT network. 

What’s crucial now is to keep yourself updated with developments in this sector. While these two technologies progress at different rates, hopes are high that we will see them applied in the near future.