Imagine going online—but instead of buying a book or a movie, you’re able to purchase data generated by an IoT device (or collection of devices) somewhere in the world. It could be from sensors on an oil rig in the North Sea bought by government agencies to create better predictive weather models; or from a major airline’s jet engines for researchers to train better machine learning algorithms; or from air-conditioning units in a major office tower in Dubai bought by real estate developers trying to gain a competitive advantage over their competitors when designing new projects.
This is the concept of an IoT data marketplace, and it’s not far from becoming mainstream.
Is an IoT data marketplace really needed?
There are already established channels through which companies can buy and sell data such as the “data-as-a-service” (DaaS) industry which is poised to become a $10.4 billion market by 2021. However, IoT data is not easily sold in this way. The gross of the data transacted in the DaaS industry consists of metadata from specific organizational content that can be easily aggregated and packaged.
IoT data streams are much more difficult to handle as they come from devices that control critical processes, infrastructure, and sensitive information. This makes IoT data a particularly good target for hackers. In fact, security concerns are the number-one inhibitor of IoT adoption. The issues of trust and security are two big obstacles that impact organizations’ willingness to sell and buy IoT data.
Blockchain closing the trust and security gap
By design, blockchain builds trust into every transaction. With blockchain, traditional independent transactions are cryptographically validated by the ecosystem participants using mathematical models and the entire transaction history is available for all to see, in either public or private ledgers within each ecosystem.
Every time someone buys or sells data from an IoT device or devices, it’s securely recorded in the blockchain in a way that lets anyone know who sold a particular data set, who bought it, and for what purpose. The existence of a perpetual, encrypted and validated record of transactions via blockchain increases confidence in buyers and sellers to
exchange their sensitive IoT data assets, effectively ‘unlocking’ the intrinsic value of data that would otherwise be too risky to monetize.
Who’s buying and who’s selling?
Within an IoT data marketplace, like in many commercial transactions, there will be buyers, sellers, and brokers that extract economic value from their assets—which, in this case, is IoT data.
Data sellers: The industries driving the growth of IoT devices include: industrial devices (24.4 percent CAGR), medical devices (20.8 percent CAGR) and automotive/transportation devices (21.4 percent CAGR). Because of this, they have the greatest need—and potential—to monetize data. By monetizing the data collected, these organizations can create new revenue streams with only an incremental additional investment.
Data buyers: For their part, users (buyers) get on-demand access to data they’ve never had before that they can use in a variety of ways. Organizations will in fact be able to acquire existing and real-time data streams to create new, disruptive business models for tomorrow.
What is a terabyte of IoT data worth?
Based on initial projections, by 2030, blockchain-enabled IoT data marketplace revenue could reach $4.4 billion. The market value of the data being transacted via these exchanges could rise to $3.6 trillion by 2030— by which time, more than 1 million organizations would be monetizing their IoT data assets and more than 12 exabytes of data would be transacted every day.
The road ahead
Blockchain promises to accelerate the maturity of IoT and other data exchanges by reducing the barriers to accessing data. Doing so increases data’s intrinsic value by allowing innovators to transform data sources from a discrete use (i.e., a single use or single owner) to a multi-use paradigm.
Therefore, it’s not surprising that by 2020, 100 percent of large organizations will buy some type of external data sets to augment their internal data to help them remain competitive. IoT data, accessible 24/7 with the tap of an app, will become yet another type of this “must-have” data as the next wave of IoT reinvents key industries and adds trillions of dollars to the global economy in the Industrial IoT realm alone according to Accenture estimates.
All this ultimately underscores the importance of having a complete environment to capture, preserve, access and transform data.