Bitcoin for Peer-to-Peer #IoT Transactions?

An interesting concept that I strongly advise all #IoT fans to explore!

Sell sensor data for Bitcoins, peer-to-peer.

#IoT is a catch-all term used to describe any system where physical world context is integrated into the digital infrastructure. This integration creates new opportunities that are so large that they are being referred to as the 4th industrial revolution. As such, #IoT describes a functionality as opposed to a product market. Here is a list of examples of where #IoT is being used and the media is full of articles about the various diverse applications and associated benefits for each of those segments.

• Consumer
• Industrial
• Retail
• Medical
• Military
• Environmental 
• Agriculture
• Smart Cities
• Energy
• Automotive

Companies in each of the segments above are at different stages. Some are still considering whether #IoT has any real value whereas others are in full deployment with substantial revenue. This explains why we still see articles about whether #IoT is real or hype and others addressing growth in revenue. All markets are touched by #IoT but not all advance in lock step.

#IoT is of major interest since by any measure, feeding physical world context into the digital infrastructure always yields a 20% to 30% improvement in efficiency which is hard to resist. As such, it is only a matter of time that #IoT functionality will be deployed in every product market.

The industrial revolution and exponential growth in the value captured from #IoT happens ONLY when we arrive at a network infrastructure that allows mashups, or so I claim. I discussed this idea in this blog in 2014 and in this one and  this most recent one. Today I want to share a peer-to-peer machine digital payment idea that I ran into recently that enables the potential mashups. Before we get to that, I wanted to remind everyone of the definitions of a few terms.

Endpoints or #IoT nodes:

A sensor that converts physical world conditions into digital data or an actuator that converts digital data into physical world actions. The endpoint is normally smart and connected. Smart since we want only relevant data to be sent upstream. Connected since this is the whole idea behind #IoT, get that endpoint on the network to be part of the infrastructure. The components are:
-sensor or actuator
-an RF block for the upstream link
-a processor to run the secure management and connectivity stack

Gateway:

A box with a processor inside, an RF block to connect to endpoints and an upstream network link. I have seen two cases:
1-IP to the endpoint
2-IP to the gateway

In case 1, each endpoint has it's own IP address and the gateway is only there to serve as the RF link to the network for a few hundred endpoints. 
In case 2, besides the RF link, the gateway acts as a router between the endpoints and the network. There are various models on the market with models to support tens of endpoints to thousands of endpoints. A gateway may also include various RF types and support different network topologies such as star or mesh.

Cloud Platform:

This is the server that manages the endpoint and access to the data.  
Example: to upgrade thousands of endpoints in the field, this platform would schedule rolling updates to keep the load uniform over time.

The three items above are being deployed today in a vertical fashion just like any other enterprise IT system. The nodes are just one more system that is attached to the infrastructure. The vertical nature of the deployment means that access to that new data stream is limited to the deploying entity. In this scenario #IoT will have a healthy growth across many markets but will not reach the true potential of trillions of dollars in added value.

For the 4th industrial revolution to take place, we need an open billing platform. Or any other such scheme to capture revenue from independently deployed nodes.

We need to allow any one to deploy nodes and then to sell the captured data to any one that has use for it. This would follow the centralised server model where a server plays the role of a broker between data generating nodes and data consuming analytics machines.

A few days ago I ran into this new model proposed by Sensor21. They propose to skip the old style centralised model and move to peer-to-peer payments where any one can purchase data directly from any sensor by using bitcoins. They have a detailed write up here:

Sensor21: Earn bitcoin by collecting environmental data

Their idea is extremely interesting and worth to be brought to the attention of everyone due to two components that have not had substantial air time before in the #IoT space.

• #IoT currency
• Peer-to-Peer Node based transactions

In their blog, they propose to use Bitcoin to pay for sensor data. Whether it is bitcoin or another new digital currency it is an idea worth exploring. Such a digital currency would solve the various issues related to micro transactions spread across a network of diverse nodes. How would one today pay 0.0000001 cents in return for a temperature reading from a sensor across the globe? Think about transaction fees, systems that have to be connected for secure transactions and so on. 

A digital currency offers a good solution for these new type of data transactions. For those not fan of Bitcoin, why not explore the creation of a new digital currency just for #IoT transactions?

The second idea is the notion of Peer-to-Peer payments. By itself, it is not a new idea but when applied to #IoT it opens the door for a flood of new nodes that would be deployed world wide by anyone. For example, an expert in radioactivity could now create, deploy and monetise nodes that measure radiation levels. The data could be purchased by any one in need. Such a change in #IoT would really trigger the revolution since there is no limit to the number of mashup applications on a global and local scale. Just think of all the applications that could be created across a smart city, a smart home or a smart business once that data is available for use via peer-to-peer transactions !

I encourage you all to check out that proposal from Sensor21 and explore the opportunities.