There is certainly much excitement these days surrounding the Internet of Things (IoT), which has become one the most hyped expressions in technology across industries as well as government. Projected to have 25 billion end-points connected to the global network come 2021, its growth is driven by both consumer and enterprise adoption.
Highlighting what is in store, it has been predicted by IDC that in 2025 a total of 180 trillion gigabytes of new data will be generated in that year from around 80 billion connected devices. And, the amount of data from IoT that will be analyzed and utilized to change business processes will be as large as the amount of all the data created in 2020.
On the consumer end, more people are buying smart gadgets. Top appliance and electronics manufacturers like Haier, which now owns GE Appliances, and Samsung are expected to continue integrating smart features and connectivity to their products.Today In: Money
Increasing affordability is also lowering the barriers to consumer adoption. Take the smart appliances market, which was valued at around $18.82 billion last year. It is expected to reach to $49.12 billion by 2024.
But despite projections of swift growth in consumer applications, it appears that enterprise adoption has not been as speedy as many IoT advocates are hoping it to be. Indeed, after assessing 26 IoT providers, technology research firm ISG found out that the rate of IoT adoption in enterprise lags behind the rate of development.
IoT adoption in business is often trivialized as simply putting in smart light bulbs and thermostats in the workspace and placing a smart coffee maker in the break room.
However, IoT use cases in enterprise encompass various processes, which include manufacturing, supply chain management and analytics. There are also industry specific applications such as in healthcare and logistics. So, it is not like there is a shortage of areas for deployment.
Projects that are geared toward these critical business processes are often complex and take time to implement. Gartner, a global research and advisory firm headquartered in Stamford, Connecticut (U.S.), even expects that 3 out of 4 IoT projects will run twice as long as planned throughout 2018 as organizations try to figure the technology out.
Interestingly, blockchain technology appears to be quite in the same boat as IoT. Both are emerging and both have yet to see more mainstream adoption. Like IoT, blockchain adoption has yet to gain critical mass in enterprise.
So, could there be opportunities for these two technologies to find synergy and encourage enterprise adoption?
Dr John Bates, CEO of Eggplant testing automation firm and Cambridge University PhD, commenting said: “Despite some amazing industrial IoT projects, the ‘IoT everywhere’ story has been an over-hyped damp squib. Indeed, thus far IoT has been the disappointment of the decade!”
Clearly, ‘everything-as-service’ is a “massive opportunity” posited Dr Bates, who splits his time between the U.S. and Britain for Eggplant and was CEO of Plat.One (an SAP company), adding that it requires secure micro-transactions.
“So, connected coffee machines trust, talk to and are billed by the smart bean dispenser and the smart milk dispenser (run by separate companies),” he explained. “And, smart vehicles are charged by smart roads and smart refuel stations. This needs to be frictionless and trusted. A blockchain/IoT combination offers this possibility.”
The fintech pioneer added: “At the moment IoT is like the Internet without the world wide web to provide a consumer-oriented commercial framework. A blockchain+IoT framework for ‘everything-as-service’ offers compelling possibilities.”
Siim Õunap, an FX and crypto trader who is the COO of blockchain marketing agency Savii Digital, remarked: “Making things ‘smart’ by connecting them to a grid (such as the Internet) is a much older concept than blockchain as a technology. And, unlike blockchain, it is already widely used in cases most do not even realize. For example, many countries already have automated toll payment systems and a number of governmental services are interconnected through data.”
The Estonian added: “The blockchain is an excellent way to store and process data, which gives a great advantage to many IoT companies that use it.”
When it comes to using our everyday smart devices for mining, some like Õunap express doubts about the practicality, although he added that “the concept is interesting and could be used in chosen and specific blockchains.”
Blockchain-IoT Focused Projects
There already are a number of blockchain projects focused on IoT. IOTA, described as an open-source distributed ledger that is being built to power the future of the Internet of Things with feeless micro-transactions and data integrity for machines, is perhaps the most popular of these IoT-related crypto projects. This venture aims to create what is described as a “machine economy” by allowing IoT devices to transact with each other.
For example, a smart car should be able to pay a smart tollgate automatically using IOTA. It is an ambitious vision but, if realized, it would create an IoT landscape with unprecedented levels of automation according to some industry pundits. And, while it is something that IOTA has expressed, it is considered to be highly speculative.
The project also has its fair share of criticisms including issues concerning its technical direction, security, and actual usefulness. As it stands, IOTA’s proposition appears more fitting for ventures embarking on innovation projects and not for those looking to improve upon their routine processes. Indeed, while this may all be a bit a minority sport, IOTA has been described as a cryptocurrency without a blockchain, with its security built upon a “Tangle.” The latter is explained as mathematical concept or idea called Directed Acyclic Graph (DAG).
When adopting new technologies, most enterprises are concerned with applications to specific use cases that would have the most positive impact to their business. They also have to be concerned with maximizing Return on Investment (ROI) should they decide to make the investment.
So, in addition to making processes more efficient, enterprises may be more interested in how IoT and blockchain can offer ways for them to monetize their IoT projects. On that score there are other projects that seek to enable this.
Take new “IoT-meets-blockchain” project IOTW, for instance. It looks to enable micro-mining through IoT devices and uses a so-called unique Proof-of-Assignment (PoA) consensus protocol. The PoA protocol only selects a limited number of candidates to solve a cryptographic problem, which is said to promise a “more equitable” distribution of minable tokens.
In contrast, Bitcoin’s Proof-of-Work (PoW) protocol requires miners to have immense computing power just to compete in solving a crypto problem and “win” coins as rewards.
PoA makes it ideal for low power devices. And, IOTW mining software can be installed in IoT devices through their firmware (i.e. software) allowing owners to earn cryptocurrencies as long as the device is online. While this may also appeal to consumers looking to have residual income, businesses could enjoy a new revenue stream simply by using their existing IoT devices to mine.
In order to integrate IOTW, one only needs a software update. On the other hand, with IOTA you would need hardware (i.e. an actual chip).
Frederick Leung, CEO of IOTW, has ventured that: “IOTW is fast and is capable of supporting a large volume of devices. It is also more secure than most common blockchains because of its witnessing protocol. A single enterprise can add hundreds of IoT devices to its infrastructure. With no add-on material cost to mine, a business could readily enjoy the benefits of micro-mining using their existing IoT devices.”
In terms of the witnessing protocol, instead of validating a new transaction by just verification by IoT micro-mining and validating by trusted nodes, at least one witness who is not the mining node, will be invited to witness the new transaction using digital signature (private/public key pair).
With such implementation, a 51% attack needs to simultaneously attack both the transaction ledger as well as the associated blockchain of witnesses to gain hostile takeover. Hence, this will greatly improve the security of the IOTW blockchain ecosystem.
IoT & Monetizing Data
Another possible by product of IoT adoption that enterprises could monetize is data. Just consider that IoT devices are now equipped with various sensors that can gather and generate immense amounts of information. And, by 2025, data generated by IoT could reach 180 trillion gigabytes with some 80 million connected devices according to.
So, rather than letting the data be unused, companies could – or should – perhaps instead use them to fuel their own data and analytics projects.
The information that IoT devices gather can even be streamed using the transmitting capabilities of these devices.
Blockchain-based platform Streamr, for example, has created a data-streaming mechanism for IoT device owners to securely and easily broadcast live data. Here think about a logistics company, which can stream data from its fleet’s tracking devices. This can help a navigation app optimize driving routes for its users based on real-time traffic conditions.
Streamr is even being built to automate certain aspects of data exchange. Should a device need data from an external source, the platform will be able to readily facilitate this exchange. These machine-to-machine transactions are made using the DATAcoin. And, to help data buyers and consumers, Streamr also features a data marketplace that connects all parties.
These developments hopefully go some way to showing how the two technologies – Blockchain and IoT – could work together in order to provide greater value for enterprises adopting IoT. Admittedly, however, these options can make the adoption strategy more complex. The prospect of monetization can easily become a priority for the effort over goals of bringing efficiency in their business processes.
Enterprises must clearly keep their primary objectives in mind. But at the very least, being able to micro-mine and sell IoT data should be treated as welcome contingencies that could help businesses recoup their investment. Add to that, the promise of ways to accelerate ROI should make IoT far more attractive for enterprises and finally spur on wider adoption. Carpe diem.