Blockchain in IoT: A precursor to the success of Web3

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  • In 1991, Stuart Haber and W Scott Stornetta created the first iteration of blockchain technology, a cryptographically secured chain of blocks.
  • One of the critical merits of Web3 is its scalability; IoT provides scale, while blockchain provides decentralization.
  • Blockchain in IoT can use decentralized PKIs in an IoT system.

One of the key benefits of blockchain technology is undoubtedly its interoperability. Its ability to work with other industries and technology has been its most outstanding achievement. Today there is blockchain in education, agriculture, the medical industry, cyber security and many more.

Blockchain developers are now aiming to create decentralized applications for nearly everything. Smart contracts’ fundamental use of automated decisions is the building block of this new technology. However, one of the significant innovations of blockchain is its ability to integrate with other revolutionary technology such as AI and, most recently Internet of Things. Indeed Blockchain in IoT has the potential to not only interconnect the entire globe but also usher in the age of Web3 as we know it.

Blockchain in IoT; Understanding the essential elements

Before diving into the revolutionary merge between these two elements, we first must understand their applications as individual elements. Why, individually, have they redefined the tech Industry and how, together, do they have the potential to realize the entire operation of Web3?

What is Internet of Things

You will often notice that the technology we enjoy today debuted decades ago. In 1999, Kevin Ashton first came up with the Internet of things. Initially, IoT was different from what it is today. Kevin coined the term by proposing putting radio-frequency identification chips on products to track them through a supply chain. This sparked the interest of other innovators as time passed since the central aspect of IoT is to interconnect different devices.

Also, Read The seven most essential technologies driving the Metaverse.

Thus IoT became the technology that creates a global communication network through exchanging data over Web2. This means that every single electronic device in a household has the capability of communicating. This creates a meshwork of networks that enables complete virtual control of every device within their household. Think of it as a universal remote that allows you to control when the AC is on or when to change the channel or a radio station. 

The vast reach of IoT applications create a mesh-work that could potentially benefit from smart contracts.[Photo/REALSEC]
There are numerous applications of IoT simply because it comprises smart devices that can collect, tor and send data from their surroundings. IoT applications play a vital role in today’s digital age since virtually everything is automated.  


This mesh world of communication and control contributes in multiple ways. Various IoT applications produce better decision-making. Multiple sensors collecting data from their surroundings gather a massive amount of data. A primitive example of this is your Smartphone. Because of its proximity to an individual and its constant usage, it gathers an immense amount of data such as activity, location, age, hobbies and many more.

Have you ever wondered how you would suggest an item and find a notification on your phone? IoT can do this instant processing, tracking and automation but on a global scale. The sheer control of IoT is staggeringly high. A fully realized IoT application is a Smart City such as Singapore, Zurich and Geneva. How they built it was through IoT.

What is Blockchain technology?

Blockchain technology is the building block of Web3. In 1991, Stuart Haber and W Scott Stornetta created the first iteration of blockchain technology, a cryptographically secured chain of blocks. Later on, various individuals would improve it; Nick Szabo, the “true” first inventor of cryptocurrency, Stefan Konst and Satoshi Nakamoto. Blockchain technology brought us NFTs and cryptocurrency, and Metaverse. These were the initial applications of blockchain technology and the core elements of Web3.

Furthermore, blockchain developers have learnt to isolate smart contracts and utilize their core attributes to bring us decentralized applications. Soon blockchain broke from the financial sector ad is now utilized in Medical centres withi their databases. In Africa, incorporating blockchain technology has revolutionized agriculture. It can provide accurate readings and notifications. 

Currently, the only way to fully realize Web3 technology is by rapidly increasing the adoption and application of decentralized applications. The benefits of blockchain technology are already vivid, but for it to completely replace Web2, it has to match its sheer scalability. This fact ushered in the use of blockchain in IoT, combining decentralization with scalability.

Also, Read African Central Banks present valid arguments against CBDCs and digital assets.

Blockchain in IoT; How it works

From the above explanations, we have understood how these technologies function and the significant components they bring. One mainly deals with the decentralization and immutability of data, while the other is creating a global mesh-like network.

Blockchain in IoT creatively depicts interconnected decentralized applications showcasing the true potential of Web3.[Photo/Altoros]
Integrating smart contracts in IoT opens doors for new possibilities that were not possible individually. It inherently reduces inefficiencies, enhances security, improves transparency, and solves scalability issues. Below are some of the benefits of blockchain when implemented on an IoT network;


 One of the significant demerits affecting IoT applications is insecurity. IoT has had a series of cyber attacks rocking the globe. The Mirai Botnet was the largest DDos Attack ever experienced in the world. It is one of the very few cyber attacks that almost shut down the Internet. Services like Twitter, the Guardian, Netflix, Reddit, and CNN were down. 

Fortunately, applying blockchain in IoT can significantly boost its security. One of the many benefits of blockchain is its tamer-proof nature, which complements another attribute; its decentralization. Due to these two factors, no organization would have sole control over the IoT network. Any changes in the network would need to make at least 51% of the entire network. The network will reflect any change. In addition, smart contracts in IoT add another layer of security that hackers would need to bypass; encryption. Cracking 128-bit encryption would take more than 1 billion years; no one has that time.

Data management

It is a fact that IoT applications go through an immense amount of data in real-time. A standard IoT system contains numerous entities that forward, filter, and process data. This demerit reflects on cost, efficiency and speed when implementing IoT. Blockchain steps in to allow better data management.

Also, the Read IOTA Foundation merges Blockchain and IoT to execute data transactions.

One of the critical aspects of applying smart contracts in IoT is the automation of various decisions. This removes the need for any third parties within the network. Blockchain in IoT will no longer require servers, clouds or local databases. It would need CPU processing power to process the data received. Due to blockchain’s ability to grant digital content ownership, it will brand every piece of information from its location right from the get-go.


This benefit works best for blockchain systems. One of the critical merits of Web3 is its scale. Finding the right equipment and means to scale a blockchain network has been an issue recently. With the scalable nature of IoT, blockchain networks can broaden their applications on a global scale. The coordination between IoT devices processing and transaction will be efficient for all Web3 components.

Automation and Authentication

Smart Contracts, in general, can automate each process. In addition, by default, some action is required before the automation process is activated. For most decentralized applications, successful authentication triggers this process. Blockchain in IoT will use decentralized PKIs in an IoT system. This authentication method is more straightforward and efficient since only the user has the hidden key for personal identification. When triggered, Smart contracts in IoT will be able to automate most of the manual functioning within the IoT processing cycle.


Blockchain in IoT is an actuality today. Several companies have incorporated smart contracts in IoT to increase efficiency and boost production.

They include:

Each of these companies has embraced the benefits of blockchain technology and is currently revolutionizing the tech industry. The use of IoT decentralized applications provides a better experience and functionalities. Blockchain technology has proven time and time again its compatibility with multiple sectors of our world. We might see the development of Web3 sooner than we expect.


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Ken Mutuku
Ken Mutuku
Your Guide to the Future of Tech, Web3, and Digital Storytelling. With a keen eye for detail and a knack for concise communication, Ken Mutuku is your go-to professional for decoding the next wave of technological evolution. Whether through captivating videos, insightful articles, or engaging presentations, he masterfully crafts messages that deeply resonate with his audience, setting him apart in the digital landscape.