8 Distributed Ledger Technology
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in the first place. Therefore, people are concerned with the security of current IoT
systems.
There is a strong belief that blockchain is the solution for IoT security due to its
intrinsic advantages such as distributed data storage and immutability. Blockchain
may be able to improve the overall security of the IoT ecosystem.
8.2 Benefits of DLTs
8.2.1 Blockchain Benefits
A blockchain can be considered as a system that stores an identical copy of a
spreadsheet called ledger on multiple distributed computers. The system frequently
has no central authority. Transactions submitted by participants are validated and
recorded in the ledger which is accessible to the community of participants. The
transactions are cryptographically signed and are then assembled into blocks. The
blocks are linked one after another and are added to the blockchain by consensus
mechanisms. Transactions are immune to changes after they are published. Blocks
are replicated across all computers of the distributed system so that they all hold the
same ledger.
The way a blockchain is created and maintained leads to numerous benefits
in comparison to traditional databases. Prominent features of blockchains such as
decentralization and consensus are the intrinsic attributes of blockchain that give
rise to benefits which are essentially out of the box:
1. First, blockchains allow trustless participants to interact with each other.
No trusted third parties are required to serve as intermediaries and validate
transactions. It is the consensus algorithms that validate the transactions. A
blockchain can maintain itself by handling conflicts automatically and creating
forks if necessary, so that the ledger is always in good standing.
2. Blockchains also make data storage more reliable. This is again due to the
elimination of third-party agents which reduces the risk of unauthorized access
and unwanted modification of stored data. The ledger is not stored in a single
location or managed by any single company. The cryptographic linking between
blocks ensures data unchangeability. Blockchains are robust. Transactions are
processed by multiple participating nodes; therefore, no single node is critical to
the entire database. No central point can be exploited so the system is much better
against hacking and fraud. This equips blockchains with high fault tolerance
capabilities. Blockchains are immune to malicious modifications. It is impossible
to change it back once data has been written into the blockchain. No change of
history is allowed either. Third parties cannot make any changes to the system as
well.
3. Transactions stored in blockchains are permanent. Therefore, they are verifiable
and auditable. Such verifications can be applied not only to data but also to
399
in the first place. Therefore, people are concerned with the security of current IoT
systems.
There is a strong belief that blockchain is the solution for IoT security due to its
intrinsic advantages such as distributed data storage and immutability. Blockchain
may be able to improve the overall security of the IoT ecosystem.
8.2 Benefits of DLTs
8.2.1 Blockchain Benefits
A blockchain can be considered as a system that stores an identical copy of a
spreadsheet called ledger on multiple distributed computers. The system frequently
has no central authority. Transactions submitted by participants are validated and
recorded in the ledger which is accessible to the community of participants. The
transactions are cryptographically signed and are then assembled into blocks. The
blocks are linked one after another and are added to the blockchain by consensus
mechanisms. Transactions are immune to changes after they are published. Blocks
are replicated across all computers of the distributed system so that they all hold the
same ledger.
The way a blockchain is created and maintained leads to numerous benefits
in comparison to traditional databases. Prominent features of blockchains such as
decentralization and consensus are the intrinsic attributes of blockchain that give
rise to benefits which are essentially out of the box:
1. First, blockchains allow trustless participants to interact with each other.
No trusted third parties are required to serve as intermediaries and validate
transactions. It is the consensus algorithms that validate the transactions. A
blockchain can maintain itself by handling conflicts automatically and creating
forks if necessary, so that the ledger is always in good standing.
2. Blockchains also make data storage more reliable. This is again due to the
elimination of third-party agents which reduces the risk of unauthorized access
and unwanted modification of stored data. The ledger is not stored in a single
location or managed by any single company. The cryptographic linking between
blocks ensures data unchangeability. Blockchains are robust. Transactions are
processed by multiple participating nodes; therefore, no single node is critical to
the entire database. No central point can be exploited so the system is much better
against hacking and fraud. This equips blockchains with high fault tolerance
capabilities. Blockchains are immune to malicious modifications. It is impossible
to change it back once data has been written into the blockchain. No change of
history is allowed either. Third parties cannot make any changes to the system as
well.
3. Transactions stored in blockchains are permanent. Therefore, they are verifiable
and auditable. Such verifications can be applied not only to data but also to