The missing protocol is ...

What is the missing protocol that will prove an essential companion to the internet of things and the data economy that comes with it? Blockchain, sort of. In this article, Henri Pihkala, CEO of Streamr discusses the demand for a real-time data economy and what’s needed to support the secure transport, storage and monetisation that the new data economy demands.

Around 12 billion devices are already connected to the internet, and the number is growing exponentially. Within just two years, Gartner forecasts that we’ll reach 20 billion internet-connected things and that 95% of new technology product designs will have Internet of Things (IoT) capabilities. In each connected device, one or more sensors is logging useful data that could be shared and sold in real time to any number of interested parties – but that’s just not happening.

Overwhelmingly, data remains locked in proprietary, centralised systems. The wider world can’t access its insights, and the humans, organisations and machines that produce it can’t sell it on to an eager and waiting market. With data confined to silos, we’re realising just a fraction of its value.

But with the rise of the IoT, demand for a real-time data economy is set to explode. Smart cities, homes and cars will be collecting ever more hyper-local information describing everything about us, our machines and the world we inhabit. It’s valuable data, yet the world has no way to trade it: on today’s internet, there’s no platform to support the secure transport, storage and monetisation that the new data economy demands.

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What’s needed?

What’s missing is a scalable publish/subscribe messaging system for information which anyone can use and no one party owns. Consider an instant messaging (IM) app – where text published to a stream gets delivered securely to everyone listening to that stream – and imagine something similar for data. The system would need to support one-to-many conversations, as well as many-to-many and private models.

Historically, IM, gaming and similar apps that need to distribute data in real-time between subscribers have had to either create their own infrastructure or rely on centralised cloud services. But building your own adds high cost to even the simplest of projects, and the result is usually a unique, closed network that helps no-one else. The centralised alternative is also a barrier to participation: worse, it places data in the hands of the usual huge and unaccountable companies, with the risk they’ll create proprietary and competing solutions.

The internet is crying out for a protocol through which humans, organisations and machines can publish data, and via which interested parties can retrieve it. But it also needs a trusted marketplace to handle the millions of accompanying financial transactions. An open, fair and free data economy demands that both the data network and its marketplace be:

Distributed – a shared, scalable infrastructure, globally owned and available

Open – open to all to use, and built to open standards with open-source code

Secure – protecting data and participants, and securing transactions from fraud

Scalable – data sources from single sensors to thousands, and a market capable of handling major and micro transactions.

SEE ALSO: IoT and blockchain: What are the possibilities?

Building the network

There are mature and emerging technologies that might satisfy these requirements – the challenge is pulling them together into a coherent and robust data publishing protocol. For the data network itself, a peer-to-peer (P2P) approach – widely used for file sharing – is the perfect foundation. Decentralised and inherently scalable, a P2P network provides a great basis for the real-time exchange of information. A data-sharing network could be built based on existing open-source libraries, with added techniques including end-to-end encryption to harden the system and provide privacy.

The accompanying marketplace can be built using cryptocurrency, with blockchain technology used for value settlement, identity, and permission control. This approach has the added benefit of enabling an incentive mechanism for those who support the data network with nodes and bandwidth.

This innovation isn’t just useful, it’s essential – a missing protocol that will prove an essential companion to the internet of things and the data economy that comes with it.