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For decades, banks and insurance companies have employed the same mostly static but profitable, centralized business model. And for decades, big tech companies like Facebook, Microsoft, Amazon, Apple, and Google have monopolized user data for profit. But blockchain projects could significantly challenge Big Tech’s hold over user data.
At the World Economic Forum in Davos in 2015, financial experts put the future of money first. So they began to seriously address the challenges posed by the rise of Bitcoin (Bitcoin), digital assets, fintech. The world of finance has begun to realize that new technologies are upending everything in the field, from saving to trading to payments to cross-border peer-to-peer transactions.
And in the summer of 2020, Decentralized Finance (DeFi) Renaissance. A few years after the phenomenal rise of this new concept, the machine economy began to take center stage, raising concerns about who should own the world’s new best commodity: data.
Thanks to blockchain, DeFi, SocialFi, game phi And a new emerging asset category: the financialization of machines (MachineFi), or the decentralized machine economy. It will enable owners of billions of Internet-connected devices around the world to monetize them and developers to build decentralized applications (DApps) that capture device data for monetization.
Related: Node is about to dethrone tech giants, from Apple to Google.
One obvious question is: why? Why do devices need financialization and decentralized markets? The answer is clear.
Big Tech has built a trillion-dollar empire selling user data. Blockchain can change that by democratizing the data and machine economy.
Historically, the machine economy has failed to gain traction due to the infrastructure and capital requirements required to operate it. Blockchain is transforming by providing users, businesses, and developers with an end-to-end solution for distributing, coordinating, and monetizing multitudes of smart devices as part of a unified network of machines.
There are currently over 50 blockchain projects related to the Internet of Things (IoT). There are also several traditional technology companies such as IBM, Azure, Samsung, Apple, Google and Amazon that are combining IoT and blockchain to power the burgeoning machine economy.
Looking back at 2021, we can see that it was the year that blockchain got smart. Oracles introduces new data sources that provide facts about the real world, making them more secure and trustworthy. Agreement on the price of Bitcoin and other crypto assets soon followed, creating a single version of truth and leading to the growth of an entirely new financial system. DeFi has laid the foundation for new concepts such as peer-to-peer lending and borrowing, yield farming, and created new opportunities for investors to earn passive income. Verifiable real-world data has become the evidence needed for the DeFi revolution.
Everyone in the crypto space knows about Proof of Work and Proof of Stake, the evidence provided to the blockchain to receive rewards or permissions. If Bitcoin miners prove that they have solved a computationally intensive problem, they are eligible to become the next block producer. For Ethereum, if someone bets a certain amount of Ether (ethereum), they are eligible to become Ethereum validators.
Similarly, a single version of truth from an unbiased and secure machine becomes a proof of work done in the real world, creating endless opportunities for new business models.
What if evidence could also be generated from ordinary activities that people do in their daily lives? IoT devices and machines Devices such as smart homes, wearables, cameras, and autonomous vehicles have the potential to become proof providers that can use blockchain to capture the usefulness and value that people create from their daily activities.
Related: Facebook and Twitter will soon become obsolete thanks to blockchain technology
Proof of existence can be determined from vehicle asset trackers that feed real-time GPS locations into crowdsourced maps. In the insurance sector, health data from wearables can provide health proofs, and driving patterns can provide safety proofs. Proof-of-Humanity helps verify the identity of people using biometric information.
Smart devices and machines on blockchain offer the opportunity to return ownership of data to people, allowing them to do whatever they want with their property, including monetization. Blockchain-based IoT projects offer greater reliability, security, interoperability, and scalability than previous projects, and harness the data provided by IoT devices and sensors to create new efficiencies and business value. produces
By 2030, it is estimated that IoT projects will be worth over $12 trillion globally. But who owns this value? Will large corporations continue to manage devices in a centralized cloud platform and become the gatekeepers of the new machine economy? We are at a pivotal moment in history. increase. Decisions about how the machine economy evolves have consequences or benefits for decades.
A decentralized backbone built to enable billions of machines on blockchain is what is needed to democratize the machine economy/IoT industry and remove it from the Big Tech realm. The IoT machine economy requires a combination of blockchain, secure hardware, and confidential computing to power user-owned devices, apps, and services.
Combining the integrity of secure hardware with the immutability of blockchain creates a new paradigm for end-to-end trust, giving users more opportunities and machines in a way that limits the impact of the few. You can definitely grow the economy. A big company trying to control.
Lauren Chai Co-founder and CEO of IoTeX. Previously, he worked for companies such as Google, Uber, and Oracle. He has his Ph.D. His research at the University of Waterloo focused on the design and analysis of lightweight cryptography and his IoT authentication protocol. At Google, he led many key security initiatives for our technical infrastructure, including SSL offloading, enabling certificate transparency for all Google services, mitigating SSL attacks, and protecting privacy. I was there. He was also the founding engineer of Google Cloud Load Balancer. Google Cloud Load Balancer currently serves thousands of cloud services with over 1 million queries per second.
This article is for general information purposes and is not intended, and should not be construed as legal or investment advice. The views, thoughts and opinions expressed herein are those of the author and do not necessarily reflect or represent the views or opinions of Cointelegraph.
