--- title: Blockchain Explained For IoT Device Dealers description: “Virtual Gold,” as Bitcoin is affectionately nicknamed, drove the technological development of what we now know to be blockchain. In this article, you will learn what blockchain is and how it relates to technology developments in the Internet of Things. image: https://www.agmonitoring.com/hubfs/Images/Blog%20Assets/Facebook%20Size%20Banner%20Images%20(Blog)/blockchain_explained_fb.jpg --- [![AG_Logo_BecklarCo_white](https://www.agmonitoring.com/hs-fs/hubfs/Images/Logos/AG%20Logos/AG_Logo_BecklarCo_white.png?width=657&height=178&name=AG_Logo_BecklarCo_white.png "AG_Logo_BecklarCo_white")](https://agmonitoring.com) [![Dealer](https://no-cache.hubspot.com/cta/default/4280184/9ec27b82-55c0-4206-800b-604843cece9a.png)](https://cta-redirect.hubspot.com/cta/redirect/4280184/9ec27b82-55c0-4206-800b-604843cece9a) ** ** ** #### [![Security_icon](https://www.agmonitoring.com/hs-fs/hubfs/Images/Icons/Icons%20for%20Main%20Navigation%20Bar/Industries/Security_icon.png?width=201&name=Security_icon.png) Security](https://www.agmonitoring.com/industries/wholesale-security-monitoring) #### 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[![Marketing_icon](https://www.agmonitoring.com/hs-fs/hubfs/Images/Icons/Icons%20for%20Main%20Navigation%20Bar/Resources/Marketing_icon.png?width=150&name=Marketing_icon.png) Marketing Toolkit](https://www.agmonitoring.com/resources/marketing-toolkit) Search this site on Google Search Google **Menu** ** ** [![Dealer](https://no-cache.hubspot.com/cta/default/4280184/841fca42-41df-4209-a163-3297156a61c3.png)](https://cta-redirect.hubspot.com/cta/redirect/4280184/841fca42-41df-4209-a163-3297156a61c3) [![Resource Center](https://no-cache.hubspot.com/cta/default/4280184/513a68dd-c45b-41e9-a4a6-21e4417689ee.png)](https://cta-redirect.hubspot.com/cta/redirect/4280184/513a68dd-c45b-41e9-a4a6-21e4417689ee) ![](https://www.agmonitoring.com/hubfs/Images/Blog%20Assets/Banner%20Images%20(Blog)/blockchain-explained.jpg) [Internet of Things (IoT)](https://www.agmonitoring.com/blog/industry-news/tag/internet-of-things-iot) 1 min read # Blockchain Explained For IoT Device Dealers [![Alex Flitton](https://www.agmonitoring.com/hubfs/Images/Headshots/AG%20Team/Admin/Alex%20Flitton.jpg)](https://www.agmonitoring.com/blog/industry-news/author/alex-flitton) Written by [Alex Flitton](https://www.agmonitoring.com/blog/industry-news/author/alex-flitton) Jul 5, 2018 12:09:24 PM “Virtual Gold,” as Bitcoin is affectionately nicknamed, drove the technological development of what we now know to be blockchain. A blockchain is a series of individual, digital blocks. Each block contains data records and copies of data records. Since each block functions independently, they work to keep others from being altered without a network consensus. Blockchain was originally instituted to protect virtual currency from being duplicated. Now, because of how effective blockchain technology has become, its application has an infinite number of uses in validating data and signal processes in the Internet of Things. ## Step 1 - The Cryptographic Hash The first step in creating a blockchain is converting information into what is called a cryptographic hash. Basically, a hash is a version of the original input data, converted to a coded output version which appears as a fixed-sized string of numbers and letters. An appealing characteristic of the cryptographic hash is that when a small change is made to the original input message, the coded output version drastically changes because of what is called the [avalanche effect](https://simple.wikipedia.org/wiki/Avalanche_effect). (See image for reference. Notice how drastically the coded output changes when one letter of the input message changes.)  ![cryptographic hash](https://www.agmonitoring.com/hs-fs/hubfs/Images/Blog%20Assets/Small%20Images%20(Blog)/cryptographic-hash.jpg?width=1172&name=cryptographic-hash.jpg)  (source: wikipedia) ## Step 2 - Network Security Perhaps the most ingenious part of blockchain is how it uses [distributed ledgers](https://en.wikipedia.org/wiki/Distributed_ledger) to achieve and maintain network consensus without the need of a trusted authority or centralized server. Blockchain distributed nature decentralizes control over data, making it virtually impossible to alter a record. ![blockchain formation](https://www.agmonitoring.com/hs-fs/hubfs/Images/Blog%20Assets/Small%20Images%20(Blog)/blockchain-formation.jpg?width=972&name=blockchain-formation.jpg) Blockchain technology means good things for companies who produce documents that require authentication, such as shipping manifests or contracts. And for the monitoring industry, its potential in the Internet of Things is unlimited. Blockchain is a much more efficient and effective form of data validation than traditional methods and spells great things for the future of technology and security at the same time. ## A Great Offer, Just a Click Away Lorem ipsum dolor sit amet, consectetur adipiscing elit ![](https://cdn2.hubspot.net/hub/273774/hubfs/mp/themes/Act-Theme/images/act-sample-opa1.jpg?width=900&name=act-sample-opa1.jpg) ** Take advantage of our robust library of industry and AG related news, articles, webinars and other resources available through our [resource center](https://www.agmonitoring.com/resources/resource-center) to enhance your success.  You will also discover valuable insights and content you can share with your subscribers through your website, newsletters, and emails. 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[![tma-5-diamond-logo_white](https://www.agmonitoring.com/hs-fs/hubfs/Images/Logos/Certification%20Logos/tma-5-diamond-logo_white.png?width=200&name=tma-5-diamond-logo_white.png "tma-5-diamond-logo_white")](https://www.agmonitoring.com/company/credentials) [![ul-logo_white](https://www.agmonitoring.com/hs-fs/hubfs/Images/Logos/Certification%20Logos/ul-logo_white.png?width=200&name=ul-logo_white.png "ul-logo_white")](https://www.agmonitoring.com/company/credentials) [![fm-approval-logo_white](https://www.agmonitoring.com/hs-fs/hubfs/Images/Logos/Certification%20Logos/fm-approval-logo_white.png?width=200&name=fm-approval-logo_white.png "fm-approval-logo_white")](https://www.agmonitoring.com/company/credentials) ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Alex Flitton", "url" : "https://www.agmonitoring.com/blog/industry-news/author/alex-flitton" }, "dateModified" : "2018-11-28T19:25:25.773Z", "datePublished" : "2018-07-05T18:09:24.000Z", "headline" : "Blockchain Explained For IoT Device Dealers", "image" : [ "https://www.agmonitoring.com/hubfs/Images/Blog%20Assets/Facebook%20Size%20Banner%20Images%20(Blog)/blockchain_explained_fb.jpg" ], "mainEntityOfPage" : { "@id" : "https://www.agmonitoring.com/blog/industry-news/blockchain-explained-for-iot-device-dealers", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://www.agmonitoring.com/hubfs/1-Becklar_Master%20(15).png" }, "name" : "Becklar Monitoring" } } ``` ```json { "@context" : "http://schema.org", "@type" : "Organization", "alternateName" : "AvantGuard", "contactPoint" : { "@type" : "ContactPoint", "areaServed" : "US", "availableLanguage" : "English", "contactOption" : "TollFree", "contactType" : "customer service", "telephone" : "+18772069141" }, "logo" : "https://cdn2.hubspot.net/hubfs/4280184/Website%20Assets/Logos/logo.png", "name" : "AvantGuard Monitoring Centers", "sameAs" : [ "https://www.facebook.com/AvantGuardMon/", "https://twitter.com/avantguardmon", "https://www.instagram.com/avantguardmon/", "https://www.linkedin.com/company/avantguard-monitoring-centers" ], "url" : "https://agmonitoring.com" } ``` ```json { "@context" : "http://schema.org", "@id" : "", "@type" : "ProfessionalService", "address" : { "@type" : "PostalAddress", "addressCountry" : "", "addressLocality" : "Ogden", "postalCode" : "84403", "streetAddress" : "4699 Harrison Blvd." }, "geo" : { "@type" : "GeoCoordinates", "latitude" : 41.1780108, "longitude" : -111.9500321 }, "image" : "https://cdn2.hubspot.net/hubfs/4280184/Website%20Assets/Logos/logo.png", "name" : "AvantGuard Monitoring Centers", "openingHoursSpecification" : { "@type" : "OpeningHoursSpecification", "closes" : "23:59", "dayOfWeek" : [ "Monday", "Tuesday", "Wednesday", "Thursday", "Friday", "Saturday", "Sunday" ], "opens" : "00:00" }, "priceRange" : "$$$", "sameAs" : [ "https://www.facebook.com/AvantGuardMon/", "https://twitter.com/avantguardmon", "https://www.instagram.com/avantguardmon/", "https://www.linkedin.com/company/avantguard-monitoring-centers" ], "telephone" : "8772069141", "url" : "https://www.agmonitoring.com/" } ``` ```json { "@context" : "http://schema.org", "@id" : "#website", "@type" : "WebSite", "name" : "AvantGuard Monitoring", "potentialAction" : { "@type" : "SearchAction", "query-input" : "required name=search_term_string", "target" : "https://www.agmonitoring.com/?s={search_term_string}" }, "url" : "https://www.agmonitoring.com/" } ``` ```json // ```