IOTA, the innovative cryptocurrency that does not use a Blockchain, has announced a testing initiative to create a data market for the Internet of things. The partnership is also supported by large companies like Microsoft, Fujitsu, and 20 others.
What is IOTA?
IOTA is an innovative cryptocurrency that uses a new type of distributed ledger called the Tangle. The Tangle, instead of using a blockchain is a lot more like a peer to peer network such as bit torrent. Transactions are free on the network. Instead of paying a transaction fee, someone wanting to send IOTA instead needs to confirm two other transactions as a form of payment. In this way, the network is self-sustaining and can provide truly free transactions.
One of the main ideas behind IOTA is that it can be a currency to use in the future for the impending Internet of things. In such a scenario, machines can pay each other for various data streams without any human interaction. Such payments could be in the thousandths of a cent range, or even less.
An example of this would be an air quality monitoring station that releases minute by minute data. Groups that need this data can subscribe to this data stream and receive it and also pay for it each time a new packet comes in. Once again, payments could be of an incredibly small value since there is no direct transaction cost. The only cost is that the machine needs to participate in the network by confirming others transactions.
A sudden rise in price
Following the announcement of the upcoming test market, prices for IOTA increased dramatically almost overnight. Previously the price for one mega IOTA, or approximately 1 million units of IOTA, was averaging at around $0.88 per unit.
After the announcement, one mega IOTA has been trading at approximately $1.50 each with a 24-hour trade volume of nearly half a billion dollars. The total market cap for the currency stands at just under $3.5 billion.
Competition on the Internet of things space
IOTA is not the only currency that is currently trying to target the upcoming Internet of things. There are several others that are attempting to do the same, such as Streamr and Ethereum Classic among others. IOTA does have the unique advantage of totally free transactions, and that may give it its unique advantage over the competition.
As the true Internet of things has not begun, it is also entirely possible that the field may have room for multiple players to be successful. there is certainly more than enough room for companies like Microsoft, Apple, and Google in the modern personal computing and mobile phone space. It is also possible that these currencies could evolve into a unique niche so that they do not directly compete with one another.
A possible income stream for the future
Those interested in participating in IOTA may have the opportunity to do so by providing streaming data. For example, with the previous air quality monitor idea, it may be possible in the future for someone to purchase an air quality monitor, connect it to the Internet, and sell or monetize the resulting data stream.
It is even possible that some home appliances may be able to create useful data that can be resold on such a network. For example, if a consumer agrees, they could sell the data regarding the contents of their smart fridge to local grocery stores. This kind of big data could be useful for tracking consumers purchasing habits, and also let local retailers know what items they may suddenly need to stock more of.
In exchange for sharing this information, the owner of the smart fridge would be compensated in cryptocurrency. While those concerned with privacy would choose not to participate in such a scheme, the average person likely doesn’t care if the store down the street knows how much milk they have left. Especially if they are being financially compensated automatically for this.
Technologies like IOTA may, in fact, represent an entirely new aspect of the world economy in the future. That being, the economy of data.