# IoT and Blockchain Integration: Applications, Opportunities, and Challenges
## 4 Blockchain Technology
### Applications of Blockchain Technology  
Blockchain technology encompasses distributed ledger and a network of computing nodes. The application of the technology goes far beyond digital currencies such as Bitcoin and Ethereum. In this section, we discuss the chief applications of the technology. * Financial Transactions and Trusted Digital Payment:In conventional digital payments, intermediaries such as banks, finances, and credit card companies act as a trusted party between a payee and a payer for any digital transactions [33]. It involves several tasks, such as bank balance verification of the payee, transaction validation, and payment verification. However, the network automates verification and validation with blockchain-based payment systems such as Bitcoin and Ethereum. As its main advantage, it reduces intermediaries' fees and transaction completion time [30]. * Process Automation: Blockchain networks may also support \"smart contracts\". Smart contracts are similar to regular business contracts except for the contract rules, terms (agreements), and transactions are encoded as a computer program and are executed automatically, in real-time, on blockchain network nodes [10]. The blockchain miners validate the outputs of the execution. Smart contracts save business operation time and cost and guarantee contract compliance. They have a higher potential for automating financial payments, financial audits, online transactions, document signature and approval, supply-chain operations, and so on [10]. * E-governance: E-governance is the practice of using information communication technology to provide government services, including issuing citizenship certificates, collecting taxes, delivering social securities, conducting elections, and crowdsourcing [34; 35]. Blockchain technology adds advantages to e-governance by automating most of the administrative services. Countries, including Estonia and China, have invested in research on the use of blockchain in e-governance to promote efficiency and effectiveness in the provision of public services [36; 37]. * Data Redundancy: One of the chief features of a blockchain network is distributed data storage [16]. Both private and public blockchain networks enforce that the computing nodes securely keep a copy of application-related data. Any alteration of data in a store can be easily detected and recovered by importing from the network peers. For instance, DoKChain ([[https://bit.ly/3](https://bit.ly/3) QYRws1]([https://bit.ly/3](https://bit.ly/3) QYRws1) (accessed on 13 July 2022)) project uses blockchain as a distributed data storage to store and process financial and clinical data. \begin{table}
\begin{tabular}{c c c c} \hline
**Capability** & **Public BCN** & **Private BCN** & **Consortium BCN** \\ \hline Decentralization 1 & Yes & Yes & Yes \\ Distributed Computing & No & No & No \\ TXNs 2 Verification & Performed by all (or majority) of nodes & Random or selected & Random or selected \\  & & node & node \\ Network Participation & Open to any node & Approved by network & Approved by network \\  & & manager & manager \\ TXNs (Data) Privacy & Not protected & Not-protected & Not-protected \\ TXNs Traceability & Pseudo-anonymous & Traceable or & Traceable or \\  & & Pseudo-anonymous & Pseudo-anonymous \\ Data Immutability & Highly immutable & Limited & Limited \\ Fault Tolerance & Yes & Limited & Limited \\ Trustworthy Execution & Yes & No & No \\ Consensus Mechanism & PoW, PoS, etc. & PoW, PoS, etc. & PoW, PoS, etc. \\  & Optional (mostly & Optional & Optional \\  & supported) & Free to the internal TXNs & Free to the internal TXNs \\ \hline \end{tabular}  
* Blockchain network is a decentralized framework because the transactions are exchanged between nodes through peer-to-peer (P2P) communication, and the task of transaction verification is not centrally controlled.
* Acronym for a transaction.  
\end{table} 
Table 1: Capabilities of a Blockchain Network. Hybrid BCN is excluded from this table as it has features from both public and private BCN.