The Internet of Things gained a lot of traction a few years back, with the introduction of smart, automated, real-time, and interconnected products. Since the internet-of-things continues to grow at a rapid pace, sensors and devices are becoming more commonplace to communicate information in business networks where data such as location temperature or other properties need to be shared. A permissioned blockchain ledger can help create a tamper-evident record which opens up new ways of automating business processes among partners without having to set up a costly centralized IT infrastructure. All participants could have access to the same data at the same time.
The integration of blockchain and IoT can bring security and transparency in any system. Let’s look at how supply chains benefit when data is shared through a permissioned blockchain.
An IoT-enabled package captures required status information while passing through multiple carriers in the system. The business contract specifies the conditions that must be met during the shipment from the factory to the grocery store. It is essential that all parties must adhere to the terms of the contract. A temperature sensor embedded in the package stores the data locally and sends it to the blockchain through the Watson IOT platform. Added weight points upon receiving connectivity information are shared across all peers. In this example, both carrier 1 and carrier 2 met the contractual obligations and the shipment arrived at its final destination without exposure to access temperatures.
Let’s have a deep understanding of how Blockchain IoT works in Supply Chain:
In this example, I will explain the use of IOT devices in combination with private blockchain to indelibly store information about a shipment as it passes through multiple carriers to its final destination. An IOT enabled shipping container of frozen cherries transmits its temperature carrier and location along the route between the factory in the store. Each transaction is tracked and shared among all partners in the blockchain. A business contract is created for the shipment of cherries that indicates that if the temperature of the container rises above Zero Degrees Celsius, the container must be inspected. The business contract is a smart contract that is implemented and run in the blockchain.
Due to the trace-ability feature of the blockchain, it is easier to identify the stakeholders responsible for the package at the time of the temperature increase. The information about the container is stored in the blockchain. Every time a container is moved to the way-point or some other destination, the temperature is captured on the blockchain.
In case, the temperature rises above zero degrees, inspection can be done quickly and we can analyze the last leg of the trip of carrier which caused the temperature increase. Using an IOT blockchain, it becomes easier to store information about shipments and share it between partners without requiring central control.
Also, a business rule can get triggered in real time to rectify the temperature situation to reject the package quickly. It helps in avoiding the unnecessary cost which can be charged automatically as a penalty fee for not meeting the obligations of the contract. Using blockchain, all business partners are allowed to access the same temperature data without requiring central control. It results in a happy customer with peace of mind about the food in his or her cart.
A decentralized approach to IOT networks could solve many current issues. Implementing a standardized peer-to-peer communications model to execute the billions of transactions between devices will dramatically lead to a reduction in the costs of installing and maintaining large centralized data centers. Likewise, it will prevent failure in any single node in the network from shutting down the whole system. Blockchain IoT combined together can disrupt many areas, including utility meters, healthcare services, supply chain, and so on.
LeewayHertz is the leading blockchain development company that has a better understanding of how blockchain can work in IoT devices.