First, many IoT devices have limited processing power and memory, yet robust cryptography involves substantial computational power and needs memory to store temporary or permanent encryption keys.
One solution is to give every IoT device a unique and unclonable identifier by deriving it from the microscopic physical differences between silicon chips caused by manufacturing process variations across a wafer. Such an identifier can substitute for stored encryption keys, saving memory.
IoT devices with unique identifiers can communicate securely with cloud-based servers that carry out data analysis and decision-making within IoT ecosystems. However, it is critical that devices and servers can authenticate that they are communicating with legitimate members of their ecosystem. This is usually handled using digital signatures and public key infrastructure.