Monetizing IoT Data with Blockchain

IoT Data

“Data is the most important asset class of current generation”. In Internet of Things (IoT) era, with increasing device proliferation in hyper-connected world, humongous collection of sensor data can facilitate the conversion of incredible ideas into value-adding services. In creating value with data explosion, Blockchain Technologies can play a critical role creating a peer-to-peer marketplace providing IoT sensor owners an opportunity to monetize data and simultaneously enable data consumers with a decentralized market to buy IoT sensor data.

According to Allied Market Research (AMR), the global market of sensors is poised to grow with a compound annual growth rate (CAGR) of 11.3 percent until 2022 when the market would reach $241 billion. The data resulting from such vast reach of IoT sensors is for the primary usage of the sensor owner or it is enhanced with value-added insights and reselling. In both the scenarios of either for primary usage or for enrichment and re-sale, the data remains unacceptably under-utilized and the utility if hindered away in organizational silos. Blockchain can provide a marketplace for IoT sensor data connecting data owners with 3rd party data consumers directly by externalizing the data outside primary silos.

The upside potential arrives from expected growth of todays 10+ billion sensors deployed globally to reach 40+ billion by 2020. Blockchain technology can help monetizing data by creating a marketplace offering a fully built financial ecosystem with a very minimal fees compared to a traditional fiat payment processors who typically charge between 1 and 3% for transactions. Also with creation of data utility tokens offers possibility to use small fractions of the token combined with very low fees making micro-transactions feasible. As well decentralization with blochchain backbone enables a very large numbers of participants in a trustless environment transacting with each other.

As shown in the picture above, a perfect ecosystems can be built for monetizing IoT data with Blockchain technology backbone. The players include sensor owners, data lakes gets created, network providers, blockchian data broker framework, data processers/enrichers, and data consumers / buyers. Sensor owners get an opportunity to monetize their data recovering some of their investments in IoT sensors. Network operators can win-back their enterprise accounts gaining scale and speed in the adoption of their network. This creates new types of buyers offering ease of access to data. Alongside data processors gain an eco-system to sell their services to the right people.

The use cases for such monetization of IoT data can be numerous covering multiple industries. A few examples of described below.

Use case

Changing Landscape of Integrated Utilities with Blockchain & Cloud Enablement

Utility

Integrated utilities are undergoing a phenomenal transformation with the convergence of utility operations with IT and emergence of blockchain and cloud technologies enabling smart grid operations. I would like to highlight below the latest developments in integrated utilities and specific anecdotes of technology interventions in this evolving space.

Blockchain magic: While blockchain remains largely unproven, and significant barriers remain, it has potential to offer intrinsic business value In integrated utilities management offering a reliable, low-cost way for recording validating financial or operational transactions across a distributed network with no central point of authority.

  • Peer-to-peer energy trading: One of the use case of Blockchain is in updating and improving centralized, legacy systems with a distributed hybrid system made up of both large power plants and micro grids powered by distributed energy resources such as solar power. This shift is prompting the industry to focus on blockchain’s potential to make peer-to-peer energy trading a reality with an integrated trading system that would permit businesses to trade their option to use electricity during a given time frame. For example, one business entity could sell few minutes of unused power during a down time to a different entity that needs additional power. Trading grid flexibility in this way could provide large efficiency benefits for grid operators.
  • Billing of AV charging stations: Innogy, the subsidiary of the German energy company RWE announced that it has launched hundreds of Ethereum blockchain-powered charging stations for electric cars across Germany through its e-mobility startup venture Share & Charge.
  • Power Ledger: Australian energy startup Power Ledger also offers a blockchain-based solution for delivering locally produced renewable energy to the end consumer. Their software allows for tracking every unit of sold energy providing a secure revenue stream for DNSPs. Therefore, energy producers get a transparent, auditable and automated network for trading without involving any third-parties.
  • Consumer switching of Power suppliers: Blockchain technology could enable customers to switch power suppliers more quickly. British startup Electron offers solution for quick change of energy suppliers through blockchain. They cooperate with Data Communications Company, which offers a list of British energy suppliers having Smart Energy Code. Previously, it took much more time and effort to change energy supplier if a customer was dissatisfied with their current services for some reason.
  • Smart grid management systems: Grid Singularity, a startup in Austria, offers multiple blockchain-based solutions for the energy sector, including apps for energy data analysis and benchmarking, smart grid management, trading of green certificates, investment decisions and energy trade validation. Aiming to develop a decentralized energy exchange platform with numerous functions and opportunities for users who can benefit from simple and efficient energy-trading and exchange.

Business relevance of cloud: New-age integrated utilities businesses are offering programs like demand response, virtual power plants, distribution and substation automation, renewable and distributed generation, wide area measurement systems, home area networks and time-of-use pricing. Ability to leverage new sources of information and flexible & scalable IT infrastructure is central to success of these programs.

  • Sporadic and massive fluctuations in workloads: It has been estimated that globally smart meter installations will reach 800M+ by 2020. Smart meters enable utilities move from monthly reads, to meter reads once every 15 minutes. This is leading to massive increase in amounts of data that demand scalable IT infrastructure in connected (IoT) arena.
  • Cloud applicability: Cloud precisely address the integrated utilities business needs by providing scalable, readily available computing and storage environments. Dynamic provisioning is the need of the day for utilities business. Also cloud offers standardized technology platform that make utilities to standardize and automate processes leading to service centric business model.
  • Compliance and security controls: Consolidation, virtualization and centralization of IT resources with cloud makes it easier to manage security controls, to apply consistent security technologies across the enterprise and to ensure the utility is meeting its compliance regulations, like FERC, NERC-CIP, and EPA etc.
  • Roadmap to cloud: The tested path for integrated utilities in cloud adoption is first start with internal and enterprise application services. Then move onto new business processes at enterprise scale, and finally evolve to the as-a-service model. Simultaneously evaluate bringing benefits of cloud to operational applications like SCADA, DMS, EMS and OMS and new applications like data warehousing, electric vehicles, demand response and distribution and substation automation.

Startup companies are constantly exploring the potential of blockchain and cloud technologies that are enabling integrated utilities promoting curiosity among technopreneurs in exchanging ideas, trend spotting, and spot innovations and implications in new-age integrated utility environment.