According to Parks Associates research, the percentage of broadband households not intending to purchase a smart home device due to security and privacy concerns has increased from 21% in Q1 2017 to 32% in Q1 2018. Further, more than one-fourth of U.S. broadband households strongly agree that it’s impossible to keep their personal data away from unauthorized users.
Security and privacy concerns are clearly becoming top of mind for many connected consumers. As the number of connected devices in consumers’ lives also increase each year, these devices can provide easy targets for hackers. There are a number of solutions and market activity that attempt to address IoT vulnerability, and investment in data privacy and security by stakeholders in the consumer IoT ecosystem has never been greater. However, these investments have so far not deterred hacks or allayed consumer concerns.
Due to these ongoing issues, global companies such as Comcast, IBM, Intel, Microsoft, Philips, and many others are implementing blockchain solutions that create more secure networks by doing away with key vulnerabilities that exist in today’s IoT systems. Although blockchain is most widely known for acting as a public ledger for cryptocurrencies such as bitcoin and Ethereum, its use cases extend far beyond digital currency. The technology may better serve IoT providers in creating a more secure and efficient network for consumers in all industry verticals, including smart home, digital media, connected health, and energy, among others.
IoT systems currently use centralized cloud-based servers which make smart home devices much more vulnerable to cyberattacks. This system aggregates all trust requests into a single point of security intelligence, leading to countless attacks on IoT ecosystems. These attacks can also reoccur because IoT devices are unable to adapt their behavior for future security decisions due to the central authority.
By implementing blockchain technology, companies can do away with this central authority in IoT networks and, in turn, significantly reduce the risk of IoT devices being compromised by a single point of security failure. A hacker trying to gain access to IoT devices on a blockchain network would have to break into a majority of the network’s nodes to gain controllable access to the system, essentially needing an entire army of hackers.
With blockchain, device networks are also able to defend and protect themselves by using group consensus to deny any unauthorized nodes in the network. In the case of a DDoS attack, the attempted traffic would not be authorized and the requests would be blocked before any damage was done to the network. Such a system would not only defend itself and any network against remote attacks, but it would also resist physical reverse engineering as well.
Due to blockchain’s transparency, blocks and transactions stored in its ledger are open to the public. However, transactional content is protected by a private key, ensuring anonymity. As a result, the blockchain model can provide a greater sense of trust, and most importantly, a more secure network for consumers and providers. This provides a key advantage for many providers, as more than 60% of data-sensitive households do not trust companies that have their data to keep it safe, and 80% of data-sensitive households do not believe they receive much in return for sharing their data.
While the number of connected devices in consumers’ lives is increasing, the mass of consumers need more confidence in these connected products. To avoid inhibiting potential adoption of connected products, solutions must be created that help deter future hacks while also allaying rising consumer concerns. Blockchain can provide that solution by eliminating a single point of failure and adding layers of protection from bad actors. Parks Associates research reveals 35% of U.S. broadband households show strong distrust in companies to keep their data safe. By implementing blockchain technologies for data security and privacy, companies can ultimately gain trust back from consumers and prevent further product adoption from being inhibited.
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