Bolstering IoT Security with Distributed Ledger Technology (DLT)

    Distributed ledger technology (DLT) has long been used in financial industries to improve security while sharing data with multiple people or entities. As the technology improves and the internet of things (IoT) gains popularity, some companies have been experimenting with ways they can use DLT and blockchain to bolster their IoT security. Some affected industries include supply chain, healthcare, financial services, and government entities. They’ve found success in reducing data silos, providing greater confidence in their stored data, and verifying transactions. To help you bolster your own IoT security, we’ve delved deeper into these advantages.

    Table of contents

    Distributed ledger technology vs. blockchain

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    While distributed ledger technology and blockchain are terms that are often used interchangeably, they aren’t quite the same thing. It’s a pickle and cucumber scenario; not all DLT is blockchain, but all blockchain is DLT. Put more simply, distributed ledger technology is a larger category of software and blockchain is just one portion of that.

    In fact, DLT is generally more flexible and scalable than blockchain. DLT isn’t required to have its data structured into blocks like blockchain is. Additionally, DLT doesn’t require the same type of chain sequence that blockchain does. Finally, blockchain networks are generally permissionless, meaning anyone can access them, while DLT is restricted to authorized users.

    Using DLT to verify transactions

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    Before distributed ledger technology, financial transactions needed a central authority, like a bank, to verify them. This caused unnecessary delays. Now, however, DLT can speed up these verifications with advanced algorithms and encryptions that limit the access to sensitive data. Each node that houses the data processes and verifies it to ensure its accuracy. Even if central verifications are required, they can be done more quickly since the ledgers are generally already shared with necessary parties.

    Additionally, digital ledgers are shared across several networks, allowing multiple groups to view and verify the transactions as they happen. Not only does this speed up those transactions, but it also provides greater trust in the information.

    How DLT reduces data silos

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    With many large enterprises, data ends up in silos where one team can access it, but another can’t. This leads them to make up their own data set that may or may not be different from the original. With DLT, however, the same data sets are shared across multiple teams, networks, and even locations to improve data sharing and efficiency while preventing data silos.

    Not only are the data sets shared, but they’re updated in real time to ensure that everyone is working off the same information no matter where they are. The main drawback here is that, sometimes, not all teams should have access to every piece of the data. Therefore, sensitive data may need to be encrypted or stored outside of the digital ledgers.

    Data confidence is improved with DLT

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    Having confidence in the data is important in most industries but especially in the financial sector. With major transactions and people’s livelihoods riding on this data, it’s crucial that this data is correct. Because distributed ledger technology is replicated across multiple networks, it’s less likely that the data will be targeted by a cyber attack. Additionally, the data is immutable in all but one of the nodes, so it would be extremely difficult for someone to change it without authorization.

    Not only is it difficult to change the data, but multiple people in various locations are working from the same data. Therefore, if one data set is inexplicably changed, there are backups in play that can get the errors resolved quickly.

    Specific DLT use cases

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    DLT is used in a variety of industries, including supply chain, healthcare, government entities, and financial services. Using these specialized DLT applications, organizations can build customer trust and provide greater value.

    DLT for supply chain

    Sometimes it’s difficult to share data with the different pieces of a supply chain, and when you can, it’s not always accurate. Using permissioned DLT options, supply chain partners can provide proof of product authenticity to customers and business partners and provide better data confidence to keep disputes to a minimum. Through IoT devices, supply chain partners use smart contracts, which automatically trigger when preset conditions are met. Not only does this give a real-time look into the supply chain operations, but it also makes it easier to make adjustments when conditions aren’t being met.

    DLT for government entities

    Citizens demand information on how their governments are handling problems in their area and using their tax dollars. However, data leaks can be a huge problem for a government entity. With DLT, you can greatly reduce data leak and the risk associated with managing sensitive information while offering transparency to your constituents. Distributed ledger technology provides a clear audit trail for regulatory compliance because only the original data source can be changed. This tells you exactly where the changes came from, allowing you to verify them.

    DLT for healthcare

    Healthcare teams have both lots of IoT devices and tons of sensitive information they have to manage. With patients often going to multiple doctors or specialists, it’s important that each provider is seeing the same patient information. DLT provides a single, immutable version of the truth, so doctors can confidently share patient data and know they’re working from the same information. This also helps control data access to ensure HIPAA compliance.

    DLT for financial services

    The financial services industry has historically been heavy on paperwork, but new technologies are offering greater security, versatility, and cooperation. DLT simplifies financial operations through automation and IoT. Through DLT, financial institutions can see faster settlement of accounts, with point-to-point fund transfers happening in almost real time. Additionally, the immutable data records provided by DLT make it easier to automate compliance and create detailed financial reports.

    Top DLT products

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    Many of the following solutions include blockchain in the name, although they offer more features of distributed ledger technology than just blockchain, like permissioned ledgers and scalability.

    Kaleido Blockchain Business Cloud

    Kaleido Blockchain Business Cloud makes it easy to set up and maintain permissioned digital ledgers across both cloud infrastructure and on-premise servers. The system makes it easier for organizations to share data across different locations or with outside entities. There are four different plans to choose from, including a free tier that allows you to try the software out before purchasing.


    • Easy to add and remove nodes as needed
    • Clear knowledge of enterprise needs


    • Support for the free plan is only as available, meaning it could take awhile to get help
    • Initial setup can be time consuming depending on the complexity of existing ledgers

    IBM Blockchain Platform

    IBM Blockchain Platform offers flexibility and speed when setting up and sharing digital ledgers. Enterprises can use it to join existing client networks or set up their own, quickly improving productivity and ROI. IBM makes it easy to scale your digital ledgers as your business grows, regardless of whether you’re connecting to on-premises or cloud environments.

    Also read: IBM Adds Start Plan for Building Blockchain Applications


    • Recognized as an industry leader by several major organizations, including Everest Group and Juniper Research
    • Experienced support available 24/7, 365 days a year


    • One of the more expensive solutions on this list
    • Steep learning curve during initial use


    Hyperledger is an open source DLT system that’s used to identify and incorporate important features into the existing system for digital ledgers. There’s also a large community of support to help you find the answers you need when using this software. Hyperledger makes it easy to share distributed ledgers and monitor content as needed.

    Also read: Hyperledger Project Makes Smart Contracts for Blockchain Platforms Portable


    • Shows how blockchains and distributed ledgers will work before they’re complete
    • Easy to develop new projects


    • Lengthy setup process
    • Support comes from the community which means not all solutions are verified

    Amazon Quantum Ledger Database

    Amazon Quantum Ledger Database (QLDB) is a fully managed DLT system that provides a clear and verifiable transaction log. This software simplifies DLT and blockchain because you don’t have to build your own applications to use it. Instead, Amazon QLDB tracks and logs each data change to provide a complete history of all changes over time.


    • Ledger history is immutable for greater data confidence
    • Makes it easy to track financials and transactions


    • Can be difficult to change or update banking information
    • Some familiarity with cloud computing is necessary

    How to implement DLT to bolster your IoT security

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    Implementing distributed ledger technology can seem complicated at first glance, but it’s a worthwhile investment to bolster your IoT security. The following step-by-step procedure should help simplify your setup.

    1. Determine which information to include

    Not all parts of your ledgers are going to need to be shareable, so the first step is to determine which information you need to include in your digital ledgers. For example, you may want to share sales data and transaction records but keep banking information somewhere more secure.

    2. Decide how to build your DLT

    Whether you purchase a software or decide to have someone custom code your digital ledger technology, the limits of your choice will guide how you proceed going forward. Custom applications may provide better functionality for your organization, but they might also be tougher to scale as your business grows. Out-of-the-box software, on the other hand, may have a more gradual learning curve but won’t be as customizable.

    3. Tap into existing ledgers

    Not all organizations will need to build their own systems, usually ones that aren’t planning to share any of their own data. Some will use their software to tap into existing digital ledgers to get the data they need. The owners of those ledgers should be able to give you the permissions you need to access them.

    4. Build necessary nodes (if necessary)

    The nodes are the pieces of the DLT that share data across networks and locations. You’ll need to build these nodes where appropriate teams can access them. For instance, if you have locations in New York, Chicago, and Los Angeles, you’ll need to build nodes in each location’s on-premises or cloud-based server.

    5. Provide permissions to authorized parties

    If your organization is building their own digital ledgers, you’ll need to ensure that you share the necessary permissions with any applicable parties. Other teams, outside organizations, and your financial institution may all need access to ensure the validity of your data.

    Digital ledger technology isn’t right for every organization, but it is helpful for companies who make a lot of transactions and need to share their financial data across several locations or with outside entities. If possible, we recommend using free trials or start plans of software to find out how DLT will work for you before you decide to fully invest.

    Read next: Thread is the Next Big Step in IoT

    Jenn Fulmer
    Jenn Fulmer
    Jenn Fulmer is a writer for TechnologyAdvice, IT Business Edge, Channel Insider, and eSecurity Planet currently based in Lexington, KY. Using detailed, research-based content, she aims to help businesses find the technology they need to maximize their success and protect their data.

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