Who wins the Internet of Things? What company or demographic benefits most from that web of 30 odd billion devices that sit on dinner tables and cling to aircraft wings? Before we attempt an answer, let’s consider the stakes. The Argentine writer Jorge Luis Borges wrote that humans might be sensory organs through which a God perceives the world.
Each human is independent, but we also contribute to a collective consciousness—like bees in a hive. Connected devices are independent, but together they could serve as global sensor organs comprising a vast digital organism. The question of who wins IoT could be the question of who controls this near-omniscient creature. And if so, how powerful could this new digital organism become?
IoT: More Dolphin Than Human
By 2025 the world will have 86 billion devices. A near tripling in the device web likely isn’t shocking given the endless commentary on the exponential growth in computing power (doubling every two years per Moore’s Law). But consider that humans have 86 billion neurons, while dolphins have 36 billion. Intelligence’s correlation with neuron count is weak. Still, something special happens when 86 billion neurons connect in a so-far inscrutable pattern to produce a self-aware mind capable of abstract thinking and writing articles like this one. Nothing against dolphins, they are famous for their mimicking and complex range of emotion, but they are way dumber than humans.
Right now, the Internet of Things is more dolphin than human. Connections are disparate and clunky, and connecting devices does not create automatic value like connecting people. Intelligence has to be connected for the conjoining to add value. But IoT is becoming more intelligent by the day. Edge computing—where Moore’s law empowers each IoT sensor with the computing power to make artificially intelligent decisions without relying on a central cloud hub—creates this intelligence. In the words of Stan Lee, with great power comes great responsibility. So we return to the question: Who controls IoT? In a world with 86 billion devices, each equipped with on-the-edge intelligence, the answer to this question concerns the future of humanity.
IoT is notoriously fractured. Countless Applications require domain expertise. As a result, no analogous winner takes all to the internet where network effects anointed masters in search (Google) and social (Facebook). According to Statista, at the end of 2019, there were 620 IoT platforms, including tech behemoths Microsoft and Amazon. Amazon controls a vast swath of the consumer IoT market: with several hundred million sold, there’s a good chance you own an Alexa device or a Ring doorbell camera (or both). But even Amazon only controls a tiny fraction of IoT. And a collective device intelligence vastly greater than the sum of its parts is disrupted by this fractured landscape.
A central problem with IoT’s current architecture is that users are forced to trust platforms, making consumers—whether they are Alexa users or corporate customers—wary of privacy violations and the potential abuse of their data for advertising anti-competitive purposes. IBM published a report in 2014 called “Device Democracy,” calling for a decentralized IoT solution supporting trustless peer-to-peer messaging, secure distributed data sharing, and a robust and scalable form of device coordination. It calls for blockchain to verify transactions, register devices, authenticate users, and broker trustless device consensus.
The blockchain allows manufacturers to wash their hands of devices once produced, allowing them to live and execute contracts autonomously. This unlocks untold value by empowering people to trade access to devices and their corresponding data seamlessly without having to trust a central authority. A new paradigm of the supply chain, financial, and industrial businesses can run on this connected web of decentralized IoT.
In a perfect world, cleansed of selfish intent and violations of trust, IoT would be a unified web of sensors and algorithmic insights proliferating into an emergent, data-driven intelligence that improves life for everyone. But the current business models and technical architectures are not designed for a global device ecosystem that works for everyone. Business models based on short-term profit encourage manufacturers and platforms to look at consumer devices as data-extraction tools which they can use to run better ads, for example. Blockchain and token-based business models can help realign incentives towards a utilitarian end by accruing value to open-source communities.
A trusted IoT, or an Internet of Trusted Things, needs to be built private-by-design and with peer-to-peer, blockchain-based device identity and coordination built-in. Once each device is de-coupled from a central authority, broad, decentralized coordination becomes possible. The Internet of Trusted Things looks like the vast intelligence we introduced at the beginning of this article. A central authority owning IoT is a horribly dystopian idea, and the current fractured landscape represents a defense mechanism against this future. If we are to achieve a unified IoT, there is only be one answer to the question, “who owns this new digital organism?” And it is the same answer to the question of “who wins IoT.” The answer is: you do.