How Cryptocurrency Favors Internet Of Things (IoT)
However, IoT is 25-year-old technology but is gaining traction now due to portable devices and seamless connectivity. Before we dig deeper into how cryptocurrency favors IoT, let's understand the fundamentals of both technologies.
Fundamentally, cryptocurrency is an encrypted decentralized currency that works on a peer-to-peer architecture digitally. The exchange of cryptocurrency happens through a blockchain, which includes the whole process of digitally mining currency and exchanging it to peers, which is recorded in a hyperledger. Undoubtedly, the world now knows Bitcoin, which is a leading cryptocurrency known for its immense volatility. Bitcoin is also one of the most successful cryptocurrencies which has gained worldwide recognition and was adopted by various businesses like NameCheap, Subway, Twitch, Expedia, and Wikipedia.
Bitcoin System is a trading robot that reportedly generates huge profits speculating on bitcoin.
All cryptocurrencies are capped, and the limit determines the price according to demand and supply. The best part of cryptocurrency is that it bypasses all conventional regulations, bureaucracy, and central authority, making it easy to use and highly convenient for all its uses. The scope of fraud and error is next to zero as there is no manual intervention, calculation, or reconciliation in the whole process. All exchanges and maintained in a ledger that can be accessed by anyone; however, the transactions are encrypted in hash format.
101 of Cryptocurrency
Cryptocurrency coin is the currency unit of a particular technology-based cryptocurrency. For example, Ethereum has an Ether coin, XRP has Ripple coin, and so forth. A unit of cryptocurrency can be called as a coin. The trading of cryptocurrency is performed on a coin basis only.
A digital wallet is mandatory for any currency exchange, and in the case of cryptocurrency, it is recommended to save your cryptocurrency in a safe and secure wallet. Most of these wallets have a private key, are secured by Two Factor Authorization (2FA), and has a public address so that anyone can deposit. Many companies also have a combination of QR codes and private keys for enhanced security. A wallet provides a mini statement of user's transactions and also stores cryptocurrency in the most secure manner.
Blockchain is the underlying technology behind cryptocurrency, which is based on a public ledger that records all transaction data throughout the world. No manual manipulation is possible on the hyper ledger, which makes it the ultimate safest route of money transfer.
Impact of IoT and Cryptocurrency
Cryptocurrency and IoT is a perfect blend for automation in industries like Manufacturing, RPA, Financial Services, and more. The internet of things (IoT) is all about smart automation, which includes devices communicating with each other for a seamless factory unit. With the blend of cryptocurrency, your car can refill and pay through crypto, your fridge can remind that the milk is over, and at the same time, order milk from the nearest store and pay through cryptocurrency. While all this happens, the consumer will only require to input fingerprint for payment authentication. IoT in cryptocurrency is not only limited to consumer applications but is also associated mainly to enterprises and large scale industries, where centralized authority is a priority for a secure infrastructure.
In 2017-18, the world saw a cryptocurrency boom with various people making fortunes and also some of them going bankrupt. However, Facebook and Google banned cryptocurrency ads on their platforms soon, and since then, there has been no volatility in the currencies at all. Below we have mentioned some reasons why Cryptocurrency favors the Internet of Things (IoT) and how it will enhance the overall productivity of various industries.
For any currency to go mainstream, it requires adoption from both the seller and buyer side. This involves the integration of cryptocurrency in the current payment gateways so that the point of sale (POS) systems can handle these currencies. Enterprises should start using cryptocurrencies in their existing IoT devices for internal payments, pilot this project, and open it for the public domain.
Beneficial for Consumers and Enterprises
Cryptocurrency also makes a lot of sense for the consumer IoT. Devices like Amazon Alexa and Google Home are already ready IoT devices ready for consumer adoption. When these devices are integrated with cryptocurrency, it has the potential to automate online shopping just through voice or whenever the stock gets over. This can also occur for large-scale purchasing within the organization from a centralized zone.
Currencies blended with IoT can be a boon for the financial systems at the microlevel. Next-level automation is possible through a combination of both technologies, which includes water pumps been shutdown when overflowed, automatically street lights switching off after sunlight, and traffic lights sending penalty receipts to drivers overspeeding.
Blockchain might solve various IoT challenges
The power of digital ledger has various scope in non financial transactions also and which directly impact the IoT atmosphere. Manufacturing and factory setups can benefit a lot, as there are multiple interactions between multiple devices on the premises. The blockchain ledger is distributed, secured, encrypted, and safeguard against any kind of fraudulent. Various hackers currently attack the IoT infrastructure around the world due to unsafe private infrastructures within the company.
With the blend of IoT and cryptocurrency, shortly, we will see multiple hardwares with a decentralized network of software. These IoT devices will act as a host to run the software, which is currently controlled by a centralized cloud network. With crypto, IoT devices will be self-reliant and will host themselves on a decentralized network. The systems can also mine to pay the hefty infrastructure costs.
All enterprise stakeholders and CIOs should carefully analyze the benefits of applying blockchain and cryptocurrency in IoT. The nature of no regulations can be a bane and a boon for the company. The adoption rate of the above technologies is gradually increasing, and there is also less volatility in the cryptocurrency arena. The world in the coming times is going to see various new technologies which are equipped with cryptocurrencies and IoT, making the automated smart living experience possible.