STEFANIE KOWALLICK Why is blockchain becoming increasingly important in the IoT?

TIMO GESSMANN Established in 2009, blockchain has become a highly disruptive technology. In the beginning, it was mainly used for FinTech applications such as cryptocurrencies. Nowadays, however, blockchain is no longer just about digital currencies such as Bitcoin or IOTA. Blockchain will fundamentally change how we exchange value. In the age of the IoT, we have many devices that exchange information with each other. The challenge is to create trust in those devices. It can be compared to dealing with money: it is accepted to do business and to set up contracts. A person gives you money and you give some sort of value back to that person in return.

In a digital world with IoT devices, there is a requirement for technology that enables humans to trust a device. In addition, this technology needs to ensure that the information the device provides is correct and trustworthy. Because blockchain fulfills these requirements, it allows digital contracts to be established between things – which is why it is becoming increasingly popular for IoT use cases. One IoT use case we have identified at the Bosch IoT Lab is using blockchain to prevent odometer fraud.