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With the world’s fast-growing adoption of Internet-enabled everyday products, the business-to-business market for the “Internet of Things” (IoT) is exploding. Analysts forecastthat B2B spending on IoT technologies and solutions will reach $267 billion by 2020 — and as more devices create a near-endless stream of data, the market for data-driven insights is being eyed as a catalyst for IoT growth.
The Berlin-based IOTA Foundation, which is behind a namesake virtual currency that’s designed specifically for the rising IoT industry, is delving into data monetization and solutions with the Tuesday morning launch of a new micropayment-based data marketplace that’s powered by distributed ledger technology. The new initiative has gathered participation from more than 20 global organizations, including corporations such as Deutsche Telekom, Bosch, Microsoft, PricewaterhouseCoopers, Accenture and Fujitsu, as well as research groups from universities around the world.
The public marketplace aims to give connected devices the ability to securely transfer, buy and sell fine-granular and diverse datasets while ultimately facilitating access to data that oftentimes sits unused.
It’s the idea that data from your Apple Watch, for example, is useful and valuable to someone, somewhere. And that making that data accessible to the parties who want it and need it can ultimately help power such things as machine learning, predictive analytics — and of course, the Internet of things.
The marketplace is hinged on data’s use applications in industries such as supply chain, smart cities, energy, manufacturing and healthcare. Within the next few days, participants in these industries and others are expected to open and enable access to streams of data generated by sensors they’ve deployed. According to the release, examples of available data include location-specific environmental data, African agricultural data and anonymized healthcare data from wearables.
IOTA is now one of the largest cryptocurrencies (#9 as of press time) with a current market capitalization of about $3 billion. When it launched on the Taiwan-based exchange Bitfinex in June, IOTA shattered trade volume records and reached a market capitalization of more than $1.5 billion within hours.
The token’s defining feature is its “tangle”-based distributed ledger technology for storing transactions, used in lieu of the blockchain technology that underlies most cryptocurrencies, including Bitcoin and Ether. It’s this decentralized permissionless ledger, where the data will be hosted, that will ensure the data being sold on IOTA’s marketplace is tamper-proof.
Per the latest version of its whitepaper released by IOTA in October, the tangle “naturally succeeds the blockchain as its next evolutionary step, and offers features that are required to establish a machine-to-machine micropayment system.” Its use case draws from the idea that as the industry surrounding the Internet-of-things matures, and micropayments become more of an oft-used necessity, the concept of transaction fees (which are used as incentives to pay miners, or those who help validate the transactions bundled into a blockchain’s blocks) for all transactions will become an unfeasible component of blockchain-based cryptocurrencies. Because IOTA requires no miners, transactions can exist free of charge.
Billed as an open-innovation initiative and scheduled to run until the beginning of January, the data marketplace’s collaborative demo will also feature content published by the IOTA Foundation and its chosen partners discussing future applications of the data marketplace for specific industries.
“The goal is to enable a combination of a business-to-business data economy, as well as enabling researchers and even hobbyists to participate,” says IOTA co-founder David Sønstebø. “The beauty of enabling fine-granular trade access is that we really don’t know who or how it will be used, except that we know it is a completely new paradigm.”
Here’s what a few of the partner organizations involved have to say about IOTA’s data marketplace initiative:
“…In the energy domain, utilities are at a decisive point. The far-reaching processes of change that have taken place over the last few years in the energy industry as a whole address many fundamental challenges that need to be resolved in the next major step. For EWE AG, it is clear that digital business models make an important contribution to the transformation of energy systems. In particular, the innovation project enera is testing the energy system of the future on a large scale. In addition to smart grids, new market models, and innovative data science methods, new technologies such as IOTA and blockchain also play an important part.”
– Dr. Justin Heinermann, Data Scientist EWE AG, Oldenburg
“We work with energy companies to prepare for the future business models and to organise the markets for the future. In one vision, the flexibility to operate the electricity system will come from decentralised sources, including millions of household devices. To make this world work, transactions must be near instantaneous and their costs must be almost zero. While Pöyry is working on a number of promising Blockchain initiatives relating to distributed data market solutions, IOTA offers an alternative ‘distributed ledger’ approach, and Pöyry is keen to understand its possibilities.”
– Stephen Woodhouse, Director at Pöyry Management Consulting
“Over two thirds of the people in Europe will have a smart meter in their home by 2020. This data can be extremely valuable for innovative new services. Elering’s Estfeed platform enables access to meter data and it is fully compliant with data protection laws – end-consumers are in charge of their data, controlling which services can access it.”
– Georg Rute, Development Manager for Digitalisation at Elering AS