Rising cryptocurrency, IOTA’s data marketplace wants to make data a public asset
Data may make the world go round, but according to IOTA CEO David Sonesto, 99 per cent slips through the net. Without a platform to store and share mass data, companies can miss out on potentially transformative insights. The answer, from IOTA’s perspective, was to create a digital environment in which anybody could access, sell and buy data. In November, the company revealed a data marketplace for secure data transactions between connected devices. As a non profit cryptocurrency built to enable the growth of the Internet of Things economy, IOTA expects the marketplace to drive IoT. But how will it do this, and what are the implications for data sharing and connected devices?
Merging Big Data, crypto and IoT
In the space of two years, IOTA has become the fourth largest cryptocurrency in the world by market capitalisation. The data marketplace may be a relatively novel concept, but has already attracted the attention of notable partners including Bosch, Cisco, Daimler, Microsoft and Samsung. IOTA’s rapid adoption is especially interesting given that unlike other cryptocurrencies, it doesn’t run on blockchain. Instead, its underlying technology is a directed acylic graph (DAG) that isn’t reliant on blocks. Although this means that it avoids block limitations, this has still led to concerns over viability. In late 2017, IOTA’s plans faced a particular setback when a security fault was discovered in their software. The issue was fixed, but experts remain unconvinced that DAG is a plausible option. Even so, it’s worth questioning if these attitudes are genuine or simply a defensive response to unfamiliar technology. Another potential issue lies in that the marketplace is run on centralised servers. This will have to change in order to fulfil the promise to decentralise the marketplace, but could compromise the existing system. The marketplace’s wider adoption will also require connected devices to be fitted with a specialised component (a curl hasher) so that they can carry out transactions independently. The practicalities of this are yet to be discussed, as is the pricing of subscriptions and data packets. The creation of a functional data marketplace, then, will be far from simple. IOTA has already faced a number of challenges, and no doubt there will be more to come.
How disruptive can data marketplaces be?
Obstacles aside, data marketplaces could be instrumental in pushing forward the Internet of Things. If connected devices can access data from an open marketplace, they could use it to inform performance. For example, a smart city sensor could use Samsung’s environmental data to issue pollution alerts, or a connected car could apply Daimler’s extensive automotive knowledge to identify a mechanical fault. The benefits for supply chain management and production line organisation are clear, providing a backbone for connectivity. Other disruptive implications involve the democratisation of data by allowing devices to autonomously buy and trade information. By sharing information between industries, marketplaces could encourage convergence through cross sector data analysis. By increasing data access, companies across the board will be able to develop improved products and services. Buying data in specific bundles also evidences the application of micropayments over subscription models. However, IOTA’s idea that anyone will be able to see, sell and buy data is slightly worrying. Although they claim that data tampering is impossible, this should be taken with a pinch of salt. Of course, not everyone will be able to get hold of the data, no matter how ‘public’ it is claimed to be. Access is still restricted to those who can afford it, and limited by the willingness of companies to share data within the marketplace. . . but with the support of a long list of industry giants, IOTA doesn’t appear to be struggling.
Organisations are aware that they are missing out on data insights, but the challenge is working out what to do about it. The development of data marketplaces could be the answer, bringing together vast datasets from all industries, as well as pushing forward micropayment business models. The involvement of major businesses signals big things for IOTA, but it won’t be long before others attempt to do the same. IOTA has a head start, but they still have some convincing to do – especially when it comes to blockchain enthusiasts.
Should data marketplaces really be accessible to everyone? Is it ever possible to fully ensure that data can’t be tampered with? What other limitations of blockchain could DAG solve? Comment below with your thoughts.