Can Blockchain And AI Accelerate the Arrival of the IoT Economy?
By Omri Barzilay
2 Nov. 2017
The collective network of connected devices known as the Internet-of-Things (IoT) is growing. Gartner estimates that there will be 8.4B IoT devices by 2020. The bulk of this growth is expected to come from consumer devices as more consumers acquire smart devices and appliances. Businesses are also expected to ramp up adoption to improve workplace productivity and maximize industrial applications.
Advancements in artificial intelligence (AI) and machine learning (ML) are making smart devices even smarter. The IoT collectively generates immense volumes of data and with great variety, which, in turn, are used to teach and refine algorithms and make technologies function better.
These developments in IoT can be world-changing. For instance, smart thermostats may be seen by some as novelty. However, these devices can actually help prevent potentially adverse events such as power outages. Energy demand could be high during warm seasons. AI can monitor temperature settings and energy consumption of homes and establishments an automatically and remotely adjust these smart thermostats to prevent a power outage.
As data can be seen as fuel to improve IoT devices, it is critical for developers to get better access to information. Unfortunately, information exchange remains challenging though efforts are being done to change this. For instance, blockchain-driven data streaming service, Streamr is promoting more democratic ways to trade data while big data marketplaces such as BDEX and Terbine are connecting big data owners to developers.
Making big data available
Traditionally, companies and developers would have to collect and store data of their own if to get into the big data. This can become even more of a challenge if they need data variety where they may have to look outward for such information. Many smaller ventures may also lack the resources to take on such projects which prevent them from taking advantage of big data.
What could even be more upsetting is that due to the volume of big data available, organizations themselves have a tough time using everything. According to Forrester, as much as 60 to 73 percent of data within an enterprise goes unused for analytics. Valuable information may just be sitting idle in data warehouses and lakes.
Instead of letting data "die" in storage, big data owners will be able to participate in marketplaces like BDEX to make their data available to those who need them. They can even create a revenue stream by doing so.
Blockchain and the IoT
Blockchain has received quite the buzz thanks to increasing adoption across a number of verticals including the IoT space. Its transparency and immutability are finding use in areas such as IoT security. This comes as a welcome development given the increasing risk of unsecure devices being hijacked and used as part of botnets.
With Ethereum blockchain, more developers can now implement smart contracts for their respective uses. Smart contracts could be programmed to work with IoT devices where the data that comes from devices can be to trigger automated tasks.
With regard to data, blockchain could even make the exchange of data more democratic. Blockchain-driven data streaming platform Streamr provides decentralized means for just about anyone to buy and sell data. The platform allows data owners to easily connect to the peer-to-peer network and stream their data, the access to which others could readily purchase. Streamr’s marketplace uses blockchain smart contracts and tokens to facilitate transactions and incentivize data exchange respectively.
Henri Pihkala, Cofounder and CEO and of Streamr speaking at Arctic15
Streamr aims to tokenize the value in real-time data. A good example to illustrate Streamr’s offering is a self-driving car. “For optimal operation, it constantly needs data from other machines, such as traffic congestion information from other cars, electricity prices on nearby charging stations, weather forecasts, and so on. Streamr provides a single interface for real-time data delivery and payment, making data streams tradeable by people and machines using the cryptographic token called DATAcoin which lives on the blockchain. The car can autonomously get the data it needs and pay for it. In turn, the car can sell the data it produces, such as traffic data to other cars, road condition measurements to a smart city, location and battery level to advertisers, and so on. A data stream economy is born,” writes Henri Pihkala, the CEO of Streamr.
An IoT Economy
The advantage of this decentralized approach is that it empowers data owners to freely monetize the data they collect and generate. They can do it out of their own volition and earn directly from their data without having to involve or be subject to conditions set out by intermediaries to do so.
The transparency of blockchain also fosters a sense of trust among users. Mechanisms such as a reputation system can be put in place to help potential buyers identify sources of high quality data. Since the market is open to all, it could aid in creating market-driven pricing rather than having prices be dictated by a limited number of dominant entities.
This approach also has the potential to create a more inclusive ecosystem for the IoT where high quality data is exchanged more freely. More participants also mean more data sources become available. This, in turn, helps fuel improvements in apps and IoT devices so that they can perform better.
Blockchain as catalyst Integrations of blockchain services with IoT could just be the catalyst that would encourage open exchange of data among users. Blockchain’s decentralization could help inspire the breaking down of silos that limit access to useful data. More exciting innovations are bound to be developed given these new means of data exchange alongside the continued improvements in hardware and AI.