Right now, it appears that IOTA is less secure than blockchain for currencies but there are huge investments being made in this blockchain 2 standard.
What is IOTA?
David Sønstebø Founder of IOTA
The IOTA Foundation is thrilled to introduce an ambitious project that has been in the making since 2015. The Data Marketplace is IOTA’s most comprehensive pilot study thus far. The goal is to enable a truly decentralized data marketplace to open up the data silos that currently keep data limited to the control of a few entities. Data is one of the most imperative ingredients in the machine economy and the connected world.
Data is one of the most fundamental ingredients in the machine economy and the connected world. It is the foundation upon which the other strata of the Data — Information — Knowledge — Wisdom (DIKW) Pyramid are dependent. Without this primary substrate, nothing can be established about the world. A datum (plural: data) is the raw value of a qualitative or quantitative variable; a pure unfiltered input from reality. Data sets that are structured and thus have had meaning extracted from them constitute what we consider to be information. Information tells us something concrete and coherent about the world through context. Contextualized information thus makes up what we know as knowledge, which in turn gives rise to our (and our machines’) ability to make wise decisions. Wisdom is knowledge applied.
The illustration above shows how the different echelons of this hierarchy are intertwined. The sensors, here cameras, monitoring the road are receiving signals from the photons reflecting off the surface of their environment. This is data. The measured speed of the moving objects and their relative positions is the meaningful information extracted from these datum inputs. This information is next contextualized and distilled into knowledge, telling the drivers on the road viaOver-The-Air updates that the road may be congested due to a crash, which allows drivers to apply the wisdom to take an alternative route.
Over the next next decade, there will be more than 75 billion connected devices that interact in different manners. This will give rise to a ‘Machine Economy’ where devices will trade everything from storage, computation/analytics to electricity and sensor data. The data trade in this pilot project will highlight and explore the potential of these developments. With the prospect of tens of billions of devices generating data, we will see a proliferation of data that is unmatched in history.
In 2017 more data was generated than in the past 5000 years combined, and this will rise tenfold in less than a decade. We are truly living in the era of data.
It is effortless to draw parallels between the tectonic shift caused by the impact of oil and its derivatives in the past century (in terms of giving rise to a fossil-fueled economic combustion engine and mass-production through plastics) with how data will be the catalyst of the economic engine of the future. While every filament of our digital zeitgeist is unequivocally telling us that data is the fuel of the future, there is an important distinction: unlike oil, which is finite and whose properties are well known in terms of what it can produce (and pollute), data is for all practical purposes limitless.
We have barely scratched the surface of what kind of data will be generated or what incredible discoveries will be made by the AI algorithms analyzing it in the future. New innovations, precision medicine, synergistic business models, climate change diagnostics, materials sciences advancements and more are already on the horizon. Just as our brains acquire wisdom and knowledge through the information they distill from the data they receive from our sensory organs, so does the world-changing AI paradigm shift require data from sensors to derive new information, knowledge and wisdom.
Data Economy Big Data is Big Business
The sheer magnitude of data and the influence it has had, and increasingly will have, on our society automatically comes with huge business opportunities that will be worth tens of billions over the next few years. Trading data will be a mutually beneficial exercise that boosts innovation for companies and creates entirely new revenue streams of data that would otherwise simply go to waste.
The largest obstacle preventing the fulfillment of the grandeur envisaged by ‘Big Data’ is the fact that the overwhelming majority of data remains locked in what is called ‘Data Silos’. Data silos do not, or at best very rarely, share its data outside its own closed environment. This leads to enormous quantities of wasted data, often over 99% is lost to the void, (source: McKinsey 2015) that could potentially contain extremely valuable information if allowed to flow freely in data streams that create an open and decentralized data lake that is accessible to any compensating party.
There are several reasons for the cumbersome and wasteful status quo. On the one hand, data wants to be free in the sense that its storage and transmission costs less and less over time; on the other hand, large quantities of data are extremely valuable and are not free to generate. These diametrically opposed conditions cause a gridlock that needs to be broken in order for Big Data to become truly big. A major cause of this is the fact that, while data sharing is becoming cheaper from a technological perspective, it is prohibitively expensive to sell fine, granular data in real-time due to intermediary fees — not to mention all the red tape one has to cut through in order to complete a single data purchase. These conditions make real-time data trade all but impossible. By 2025 it is projected that around 95% of all data will be generated by IoT devices in real-time (source: IDC 2017), so this is a pressing issue.
A third obstacle is the lack of ensured authenticity and audit trails of data. Before adoption of Distributed Ledger Technologies, data transmission protocols and databases were susceptible to various attacks, including ‘man in the middle’ attacks and data tampering. Data is only as valuable as it is valid. In short, if the data input is garbage, the output will also be garbage (GIGO).
This is why the IOTA protocol becomes necessary to unlock data’s gigantic potential.
IOTA’s unique public Distributed Ledger architecture, called Tangle, is a form ofDirected Acyclic Graph in which every transaction or data transmission validates two previous ones, which in turn each referenced two previous ones before them, and so on. This means that validation of the network is an intrinsic property of the network and is thus no longer decoupled from the usage of the network, as is the case with regular blockchain architectures. This removes fees entirely on transactions and data transmissions, thereby removing the real-time, fine-granular payment obstacle. It also ensures costless data integrity, which resolves the security concerns tied to data trading. Additionally, this design means that the network remains entirely decentralized, unlike blockchain architectures which centralize around mining-farms which then further centralize into mining-pools.
This project has roots stretching years back and is now finally ready to begin its first phase with public testing. The Data Marketplace is open for everyone to participate right now, and over the coming weeks we will be opening up an API for the marketplace so that anyone can contribute sensors and build new data-driven applications. Right now, the entire Proof of Concept runs in real-time on the IOTA test network, with full end-to-end data verifiability and security offered viaMasked Authenticated Messaging in the user’s browser.
Over the coming weeks, the IOTA Foundation, in collaboration with several of the marketplace participants, will release additional content. This will include Proof of Concept applications further elucidating how the data marketplace can be applied to different industries and sectors. Most important is the community’s participation, where the IOTA Foundation will host several events over the coming weeks to make the data marketplace a truly global, collaborative effort. The final result of the data marketplace will be a public report including several case studies that go into detail on the potential and the barriers we will face when rolling out a marketplace in full-scale production. Major emphasis will be dedicated to the impact of the EU’s General Data Protection Regulation (GDPR) on the planned future live data marketplace.
The IOTA Foundation is exhilarated to be able to announce that we have several dozen world-leading entities participating in this data marketplace which will run over the next 2 months. We deem it pivotal to have such a plethora of varied data sources from multiple stakeholders participating in this pilot to nurture the blossoming of this seed of potential and move beyond grandiose promises and theory into the real world.
– Rune Hogga, Agder Energi, Project Manager Pilot E Nordic Impact “With the democratization of data through the IOTA platform we see the start of an abundant world. We will move towards a world where we will give people access to clean water, food, energy, health care, education, and everything else that is necessary for a having a good life”. Anders Lier -Chairman Nordic Impact /Advisor IOTA Alpiq & Gridsense The engagement of people for a world with less CO2-emission is important, monetizing their investment into renewable energy-production & -consumption by offering their “Energy-Information and -Flexibility” to a market. With IOTA is “Energy-Information and -Flexibility” getting a pricing and is a real incentive to be a part of a world with renewable energies” APG SGA “We are very excited to contribute with our sensors to this proof of concept. The IOTA data marketplace offers a unique possibility to open up our sensor data to interested third parties and to monetize it through micro transactions. Furthermore, we believe that the IOTA tangle has great potential to introduce a trust and transparency layer in a network of sensors for smart city use cases.” — Jan Berchtold, Head AdTech Lab at APG|SGA Deutsche Telekom “We think it’s a great opportunity for Deustche Telekom to investigate and prototype future blockchain-based, data-driven business models with different partners. Compliance with data privacy regulations has to be regarded at every stage, and IOTA provides the right tech, right now.” — John Calian, VP, The Blockchain Group at Telekom Innovation Laboratories DNV GL Business Assurance “We thank IOTA for inviting DNV GL to join the Data Marketplace Initiative. Fast, efficient and secure machine-to-machine data transactions, including its monetization, is essential in order to unleash the real potential of any solution based on Distributed Ledger Technology, and enable a true sharing economy. We hope to contribute to this revolutionary concept by creating the foundation of a new Digital Assurance concept, leveraging on the value and utility of real time data in a digitally trusted ecosystem,” -Renato Grottola, Global Digital Transformation Director in DNV GL — Business Assurance. Elering “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 ENGIE “As a Research Lab, we are very excited to be part of the Data Market Initiative with the IOTA and the Foundation. IOTA DLT is a potential game changer in M2M ecosystems and it could be an effective and scalable technical backbone for transaction between IoT. This Data MarketPlace will allow us to offer new way to expose, consume data. Data Market Place will extend access to data in a fair 360 financial model to a large new community and will provide opportunities for new services for energy and beyond.” -Dr. Ph.Calvez, Head of the Lab for Computer Science and Artificial Intelligence Engie Lab, France. EWE In the age of digital business models and the extensive use of data, we need a secure and responsible way to deal with data. The IOTA Marketplace renders an impressive facility for the self-determined sale of sensor data and uses the advantages of a trustworthy and and fail-safe database. 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 Fujitsu “The possibilities of applications based on Blockchain and especially Tangle (“next generation Blockchain”) are immense. Providing public access to valuable data is one of the most pressing challenges within IOT. The Data Marketplace of the IOTA Foundation is one of the most innovative initiatives in this area. As one of the world’s largest IT companies, Fujitsu is strongly supportive by developing Blockchain and Tangle-based offerings and actively integrating them as scalable solutions into the ecosystems of our customers.” — Dr. Rolf Werner, Head of Central Europe at Fujitsu ISBM / ICE Lab “By giving objects the possibility to communicate over the Internet, IoT enables a new generation of processes and scenarios in countless application domains. Among the most disruptive features coming up in the near future is the ability of objects and machines to make decisions about buying and selling data, resources and materials, implementing the so called Machine Economy. An architecture like the IoTA Tangle, able to manage transactions with no fees — and offering at the same time the high security features made possible using Distributed Ledger Technologies — is the missing link needed to make all this come true. ISMB and Politecnico di Torino have cooperated for many years on the application of IoT technologies in domains like mobility, energy, health and manufacturing. We are proud to be among the first users to have the opportunity to add machine economy features to the numerous use cases we find in our applied research activities and projects” Microsoft “ We are excited to partner with IOTA foundation and proud to be associated with its new data marketplace initiative. This next generation technology will accelerate the connected, intelligent world and go beyond blockchain that will foster innovation real world solutions, applications and pilots for our customers”. — Omkar Naik Movimento (owned by Delphi) “In the era of software-defined everything, democratizing trust while maintaining continuous transparency with ecosystem partners and customers will define the winners and losers of tomorrow. The IOTA-based solution will help in democratizing every product as a potential service with full transparency, accountability and immutability of contracts and transactions. Sharing of vehicles and data with full transparency, accountability, trust, integrity, security with undisputed contracts/agreements is going to disrupt the existing centralized cloud-based ride sharing models.” NTNU “We are excited to be a part of the IOTA Data Marketplace in order to develop new business models and solutions to many of the pressing challenges for Smart Cities, including low carbon urban development, renewable energy system integration, citizen empowerment, clean mobility solutions, privacy, and cyber-physical security.” -Patrick Driscoll, Project Developer, Smart Sustainable Cities NTNU Orange “Orange is happy to participate, together with IOTA and partners of this open innovation initiative, to this proof-of-concept of IoT data marketplace as a way to better understand the potential of the Tangle distributed ledger technology.” -T. Coupaye, VP Research, IoT, Orange Oslo Business Region “Smart cities need to learn to leverage available technologies to their benefit. We’re excited for IOTA and their potential for contributing to a green smart city, and to support them further with the ambition to put Oslo in the forefront in this area.” -Silje Bareksten. Head of Smart City Poyry “We are looking forward to the cooperation under this great initiative that aligns perfectly with our #PoyryDigital services development,” says Stephen Woodhouse, Director at Pöyry Management Consulting. “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. Schneider Electric “Schneider-Electric collaborates with IOTA, as it provides a sustainable technology, to experiment Blockchains and Distributed Ledger beyond the limits of the usual PoC. But theses technologies only remove existing locks. Schneider-Electric actively engages in this Data Marketplace to explore potential new businesses.” Tine We see a great potential to use IOTA within the agricultural sector, and are eager to get more hands-on experience through the Data Marketplace. The support from the foundation has made it very easy for us to participate in this exiting initiative -Michael Fridman Trianel “Distributed ledger technologies provide the opportunity to develop exiting new energy solutions such as platforms for peer-to-peer trading between prosumers and private consumers. So far Blockchains are not living up to their promises — especially in terms of scalability, transaction cost and transaction speed. We trust the Open Data Marketplace will show: Yes, IOTA Tangle can.” -Thorsten Seiferth, Ph. D. — Head of Corporate Development TUM “In Germany, it is still very difficult for research organizations and start-ups in the area of digital mobility services to get access to sensor data at scale and with high quality to develop next generation connected mobility solutions. Our TUM Living Lab Connected Mobility is participating in the IOTA data marketplace to better understand the potential of IOTA to establish a decentralized and compliant market place for mobility data with a decentralized governance structure.” — Professor Dr. Florian Matthes Universidad Nacional de Colombia “We thank IOTA for inviting Universidad Nacional de Colombia, Sede Bogota to join the Data Marketplace Initiative. Fast, efficient and secure machine-to-machine data transactions. We hope to contribute to this revolutionary concept by simulation of a new Digital concept in smart campus” -Javier Rosero Garcia, Director, Research Group of Electrical Machines and Drives (EM&D), Universidad Nacional de Colombia, Sede Bogota. University in Oslo In the Strategy 2020 document, University of Oslo (UiO) has declared several areas of outmost relevance to the work of the IOTA foundation. Worthwhile to notice are “grasp and illuminate societal challenges” and “take a clear responsibility in meeting the challenges facing the world”. What we address through the collaboration between IOTA and UiO are trust and security in the sensor-driven digital world. We see the approach from the IOTA Foundation as a promising technology for ensuring traceability and integrity of data, thus look forward for the collaboration relevant for both our national and international research projects related to security, privacy and trust. -Prof. Josef Noll, Department of Technology Systems, UiO Enexis “Together with IOTA we explore the future and the changes that Distributed Ledger Technology may bring. The data market place makes the usability of the tangle tangible. All data marketplace users are filling the tangle with data with which the developers of tomorrow can build useful applications.
As a grid company we believe in the power of sharing and open (free) data to co create beneficial for society. Together with the Iota foundations we are looking for solutions to make data more secure and trustworthy. The datamarket place will play a significant role in our endeavors ” -Jan-Peter Doomernik, sr business developer at Enexis Group (Dutch Grid operator)
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