Industrial Internet of Things (IIoT) has numerous devices networked together for manufacturing, supply chain monitor and management systems. Some of these devices need to share data among each other for functioning. All the data is generally processed and stored at a central server. This introduces security challenges when the data is propagated through intermediaries. Also, there would be a single point of failure. Blockchain addresses these challenges as it comes with an inherent security and immutability properties.
In large scale networks, blockchain needs to have high scalability. In IoT, millions of devices are connected. So, the rate at which transactions are recorded on blockchain needs to be very high. Bitcoin has transaction throughput of 4–7 transactions per sec (TPS). But Bitcoin protocol has very big chain size and long transaction confirmation delays. This makes it limited to cryptocurrency applications. On the other hand, Ethereum can scale very well and can handle high transaction rate because of smart contracts.
Scaling can be done in two ways namely, on-scale scaling and off-chain scaling.
On-chain scaling
On-chain scaling refers to modification to consensus protocols to handle higher throughputs. Sharding is a very popular on-chain scaling technique. A shard blockchain network is used to process the numerous transactions in a parallel manner. Sharding can efficiently handle significantly large amounts of data from the IoT network.
Off-chain scaling
Ethereum is a widely used blockchain network for smart contracts and it supports distributed applications (DApps). The cryptocurrency unit in Ethereum is called an ether. Smart contracts allow trusted transactions to be carried out among anonymous parties without the need for a central authority or a third party. Solidity language is generally used to create contracts. Etherum is adopted by IoT, VANETS and other applications because of its high throughput while being a public blockchain network. Also, it provides permission less network access.
What if you adapt the existing algorithms which scale blockchains
The existing scaling solutions could increase the throughput but what about the blockchain trilemma? You can achieve at most two out of the three properties while scaling a blockchain: Decentralization, scaling and security.
This is still an open research problem on how to make blockchains more scalable while maintaining the security and decentralization properties.
Scaling Blockchain is necessary if we are planning to use it for high transaction throughput applications like IIOT. Off-chain solution would be easier because of platforms like Ethereum. On-chain scaling solutions could be adapted but there is a scope of more innovation.
