The Internet of Things has a huge amount of potential and looks set to change the way we do things in multiple areas.
Worldwide spending on the IoT is expected to hit $772 billion in 2018 according to the IDC, with companies the world over eagerly adopting the technology.
One of the most exciting things about the IoT is how widely it can be applied. Sure, smart cities and industrial applications are interesting and will have far-reaching benefits, but for the average consumer the more compelling examples are ones being developed for the individual.
Smart homes are one example of this — allowing people to have their own connected networks of smart devices in the home. Things like boiling the kettle, switching off the lights, changing your music, and much more could soon be taken care of entirely by machines.
This isn’t just the stuff of sci-fi and speculation, in North America alone, the IoT consumer electronics market is expected to increase from $90 billion last year to $140 billion in 2022. This really is happening, and fast.
One intriguing possibility for the future of the IoT involves combining it with another emerging and promising technology: blockchain. If done well, this partnership could bring many benefits to consumers, from increased safety to easier data sharing.
So why isn’t it already happening? Let’s take a look at what’s stopping blockchain and the IoT from banding together.
One of the biggest barriers to blockchain and IoT integration is the current hardware issue. Thanks to blockchains main consensus mechanisms currently in use— Proof of Work and Proof of Stake — a lot of extra hardware is required to run blockchain on an IoT device.
With Proof of Work, miners compete to solve a mathematical problem in order to gain the right to mine the next block. In order to solve the problem quickest, miners need a huge amount of computational power, especially with large blockchains like Bitcoin.
This takes up very large amounts of energy and memory space, which seriously pushes up hardware demands and raises costs while limiting the amount a user can do with one device.
When it comes to Proof of Stake, mining rights are given based on how many tokens the miner holds. Although this reduces the amount of computing power required, it also reduces competition in the area, giving the big players the upper hand here.
With both protocols, miners still need to possess the entire transactional ledger in order to mine which can take up a whole lot of storage space, and places big demands on memory and hardware.
What does this have to do with the IoT? Well, since most IoT devices are relatively small, in order to mine, users would need to buy a lot of extra hardware, significantly increasing the cost of the device and slowing it down. Enabling a device for blockchain could involve a dramatic increase in price and size, which might not be worthwhile for the consumer.
IOTA are a leading company aiming to bring blockchain and the IoT together. While there are many positive aspects to their project, they still haven’t found a way to lessen the amount of power or hardware IoT devices would need to run their program.
The solution to this problem is being combatted by a new company in the space, who are significantly reducing hardware demands by switching to a new kind of consensus mechanism.
That’s what IOTW are doing. They want to make it possible to mine blocks without requiring huge amounts of energy, memory, and hardware.
They’re doing this by relying on a new consensus mechanism called Proof of Assignment, where mining rights are given to nodes based on their track record and availability. There’s no need to compete, and no need to possess the entire ledger, so far less energy and space is required.
Under this system, IoT devices can function as nodes and run blockchain technology with no extra hardware at all. They’ll remain affordable, environmentally friendly, and easy for users to manage and implement into their homes which can deliver enormous advantages to consumers, as it’ll allow them to run more secure and decentralized IoT networks. It’ll be easier to manage the systems, safely grant access to others (like neighbors), track data, and even share information with manufacturers (with users’ consent) to help them improve their products.
What’s more, individual IoT device owners will be able to mine from their devices, gaining rewards and benefiting simply from being connected.
It’s a new and highly exciting approach, one which could be the long-awaited key to combining blockchain with the IoT and bringing this technology to the masses.