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What is the IoT?

The Internet of Things (IoT) describes the network of physical objects—“things”—that are embedded with sensors, software, and other technologies for the purpose of connecting and exchanging data with other devices and systems over the internet. These devices range from ordinary household objects to sophisticated industrial tools. With more than 7 billion connected IoT devices today, experts are expecting this number to grow to 10 billion by 2020 and 22 billion by 2025. 

Why is Internet of Things (IoT) so important?

Over the past few years, IoT has become one of the most important technologies of the 21st century. Now that we can connect everyday objects—kitchen appliances, cars, thermostats, baby monitors—to the internet via embedded devices, seamless communication is possible between people, processes, and things.

By means of low-cost computing, the cloud, big data, analytics, and mobile technologies, physical things can share and collect data with minimal human intervention. In this hyperconnected world, digital systems can record, monitor, and adjust each interaction between connected things. The physical world meets the digital world—and they cooperate.

What technologies have made IoT possible?

While the idea of IoT has been in existence for a long time, a collection of recent advances in a number of different technologies has made it practical.

  • Access to low-cost, low-power sensor technology. Affordable and reliable sensors are making IoT technology possible for more manufacturers.
  • Connectivity. A host of network protocols for the internet has made it easy to connect sensors to the cloud and to other “things” for efficient data transfer.
  • Cloud computing platforms. The increase in the availability of cloud platforms enables both businesses and consumers to access the infrastructure they need to scale up without actually having to manage it all.
  • Machine learning and analytics. With advances in machine learning and analytics, along with access to varied and vast amounts of data stored in the cloud, businesses can gather insights faster and more easily. The emergence of these allied technologies continues to push the boundaries of IoT and the data produced by IoT also feeds these technologies.
  • Conversational artificial intelligence (AI). Advances in neural networks have brought natural-language processing (NLP) to IoT devices (such as digital personal assistants Alexa, Cortana, and Siri) and made them appealing, affordable, and viable for home use.

What is industrial IoT?

Industrial IoT (IIoT) refers to the application of IoT technology in industrial settings, especially with respect to instrumentation and control of sensors and devices that engage cloud technologies. Refer to thisTitan use case PDF for a good example of IIoT. Recently, industries have used machine-to-machine communication (M2M) to achieve wireless automation and control. But with the emergence of cloud and allied technologies (such as analytics and machine learning), industries can achieve a new automation layer and with it create new revenue and business models. IIoT is sometimes called the fourth wave of the industrial revolution, or Industry 4.0. The following are some common uses for IIoT:

  • Smart manufacturing
  • Connected assets and preventive and predictive maintenance
  • Smart power grids
  • Smart cities
  • Connected logistics
  • Smart digital supply chains

What are IoT applications?

Business-ready, SaaS IoT Applications

IoT Intelligent Applications are prebuilt software-as-a-service (SaaS) applications that can analyze and present captured IoT sensor data to business users via dashboards. 

IoT applications use machine learning algorithms to analyze massive amounts of connected sensor data in the cloud. Using real-time IoT dashboards and alerts, you gain visibility into key performance indicators, statistics for mean time between failures, and other information. Machine learning–based algorithms can identify equipment anomalies and send alerts to users and even trigger automated fixes or proactive counter measures.

With cloud-based IoT applications, business users can quickly enhance existing processes for supply chains, customer service, human resources, and financial services. There’s no need to recreate entire business processes.

What are some ways IoT applications are deployed?

The ability of IoT to provide sensor information as well as enable device-to-device communication is driving a broad set of applications. The following are some of the most popular applications and what they do.

Create new efficiencies in manufacturing through machine monitoring and product-quality monitoring.

Machines can be continuously monitored and analyzed to make sure they are performing within required tolerances. Products can also be monitored in real time to identify and address quality defects.

Improve the tracking and “ring-fencing” of physical assets.

Tracking enables businesses to quickly determine asset location. Ring-fencing allows them to make sure that high-value assets are protected from theft and removal.

Use wearables to monitor human health analytics and environmental conditions.

IoT wearables enable people to better understand their own health and allow physicians to remotely monitor patients. This technology also enables companies to track the health and safety of their employees, which is especially useful for workers employed in hazardous conditions.

Drive efficiencies and new possibilities in existing processes.

One example of this is the use of IoT to increase efficiency and safety in connected logistics for fleet management. Companies can use IoT fleet monitoring to direct trucks, in real time, to improve efficiency.

Enable business process changes.

An example of this is the use of IoT devices for connected assets to monitor the health of remote machines and trigger service calls for preventive maintenance. The ability to remotely monitor machines is also enabling new product-as-a-service business models, where customers no longer need to buy a product but instead pay for its usage.


What industries can benefit from IoT?

Organizations best suited for IoT are those that would benefit from using sensor devices in their business processes.


Manufacturers can gain a competitive advantage by using production-line monitoring to enable proactive maintenance on equipment when sensors detect an impending failure. Sensors can actually measure when production output is compromised. With the help of sensor alerts, manufacturers can quickly check equipment for accuracy or remove it from production until it is repaired. This allows companies to reduce operating costs, get better uptime, and improve asset performance management.


The automotive industry stands to realize significant advantages from the use of IoT applications. In addition to the benefits of applying IoT to production lines, sensors can detect impending equipment failure in vehicles already on the road and can alert the driver with details and recommendations. Thanks to aggregated information gathered by IoT-based applications, automotive manufacturers and suppliers can learn more about how to keep cars running and car owners informed.

Transportation and Logistics

Transportation and logistical systems benefit from a variety of IoT applications. Fleets of cars, trucks, ships, and trains that carry inventory can be rerouted based on weather conditions, vehicle availability, or driver availability, thanks to IoT sensor data. The inventory itself could also be equipped with sensors for track-and-trace and temperature-control monitoring. The food and beverage, flower, and pharmaceutical industries often carry temperature-sensitive inventory that would benefit greatly from IoT monitoring applications that send alerts when temperatures rise or fall to a level that threatens the product.


IoT applications allow retail companies to manage inventory, improve customer experience, optimize supply chain, and reduce operational costs. For example, smart shelves fitted with weight sensors can collect RFID-based information and send the data to the IoT platform to automatically monitor inventory and trigger alerts if items are running low. Beacons can push targeted offers and promotions to customers to provide an engaging experience.

Public Sector

The benefits of IoT in the public sector and other service-related environments are similarly wide-ranging. For example, government-owned utilities can use IoT-based applications to notify their users of mass outages and even of smaller interruptions of water, power, or sewer services. IoT applications can collect data concerning the scope of an outage and deploy resources to help utilities recover from outages with greater speed.


IoT asset monitoring provides multiple benefits to the healthcare industry. Doctors, nurses, and orderlies often need to know the exact location of patient-assistance assets such as wheelchairs. When a hospital’s wheelchairs are equipped with IoT sensors, they can be tracked from the IoT asset-monitoring application so that anyone looking for one can quickly find the nearest available wheelchair. Many hospital assets can be tracked this way to ensure proper usage as well as financial accounting for the physical assets in each department.

General Safety Across All Industries

In addition to tracking physical assets, IoT can be used to improve worker safety. Employees in hazardous environments such as mines, oil and gas fields, and chemical and power plants, for example, need to know about the occurrence of a hazardous event that might affect them. When they are connected to IoT sensor–based applications, they can be notified of accidents or rescued from them as swiftly as possible. IoT applications are also used for wearables that can monitor human health and environmental conditions. Not only do these types of applications help people better understand their own health, they also permit physicians to monitor patients remotely.


How is IoT changing the world? Take a look at connected cars.

IoT is reinventing the automobile by enabling connected cars. With IoT, car owners can operate their cars remotely—by, for example, preheating the car before the driver gets in it or by remotely summoning a car by phone. Given IoT’s ability to enable device-to-device communication, cars will even be able to book their own service appointments when warranted.

The connected car allows car manufacturers or dealers to turn the car ownership model on its head. Previously, manufacturers have had an arms-length relationship with individual buyers (or none at all). Essentially, the manufacturer’s relationship with the car ended once it was sent to the dealer. With connected cars, automobile makers or dealers can have a continuous relationship with their customers. Instead of selling cars, they can charge drivers usage fees, offering a “transportation-as-a-service” using autonomous cars. IoT allows manufacturers to upgrade their cars continuously with new software, a sea-change difference from the traditional model of car ownership in which vehicles immediately depreciate in performance and value.


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How Can Blockchain And Digital Payments Reinvent The Internet Of Things?


The convergence of artificial intelligence, blockchain, cloud computing, edge computing, Internet of Things (IoT), 5G, computer vision and augmented/virtual reality is taking society on a journey through the next wave of the digital revolution and toward the metaverse.


As one of the key enablers of the metaverse, IoT has reshaped our lives in significant ways with a myriad of applications, including smart homes, smart manufacturing, smart healthcare and intelligent transportation systems. Billions of connected devices have generated massive amounts of data that tech giants analyzed to extract valuable insight for their businesses.


However, the IoT industry presently possesses several limitations that restrict the sustainable growth of IoT ecosystems. Can blockchain and cryptocurrency help tackle industry-wide challenges and take IoT to the next level?


Internet of Things: The Status Quo

Today, a typical IoT application is still primarily centralized. An IoT company distributes smart devices to its customers and builds the entire solution that often includes various components.

These include identity management, device management, connectivity gateway, data storage, digital twin, data visualization and others, all on a preferred cloud platform. Centralized IoT system architecture was developed to deliver incredible value to customers, but it comes with five key disadvantages:


• Single point of failure: An IoT solution deployed as a centralized solution is subject to a single point of failure. Although cloud service providers have made efforts to improve the scalability, reliability and availability of their platforms, cloud platforms still experience service outages from time to time, leaving customers with smart devices in the lurch.

• Ownership of devices and data: Users who purchase IoT devices do not truly own their devices or data that’s collected. The lifecycle of smart devices is often fully managed by IoT companies, and it is quite difficult, if not impossible, for users to repurpose their devices for other applications. Moreover, IoT companies have extensively used data collected by smart devices, creating new value in businesses without compensating their customers.

• Application and data silos: Most IoT solutions deployed on a centralized platform are self-contained, thereby forming application and data silos. Those silos hinder the value exchange between different IoT systems and result in the loss of new business opportunities.

• Misalignment of values: IoT ecosystems consist of multiple stakeholders, such as device manufacturers/OEMs, network operators, platform providers, service providers, end-users, etc. The centralized IoT architecture enables platform and service providers to maximize their shares of the value chain revenue, whereas the profit margins for device manufacturers/OEMs are quite slim. In addition, end-users are excluded from the centralized IoT value chain.

• Barriers to innovation: The application and data silos, coupled with rigid business models, create barriers to continuous innovation in IoT. It slows down technology adoption and ecosystem growth.

Internet of Things: A New Dawn

The introduction of blockchain and cryptocurrency has shed light on a new community-driven machine economy called MachineFi. The innovative combination of blockchain, cryptocurrency and IoT provides effective solutions to address challenges that the IoT industry is facing.

• High availability and security: The decentralized nature of blockchain implies that applications running on top of it can achieve high availability and security. As a result, IoT companies could leverage blockchain to deploy the critical components of their solutions, thereby reducing service downtime and enhancing system trustworthiness.

• User-owned device and data: By applying the emerging concepts such as decentralized identifiers (DIDs) and verifiable credentials (VCs) to build a self-sovereign identity metasystem for people, organizations and IoT devices, users can gain control over data collected by their smart devices and decide how it’s shared.

• Interoperable applications and data: Using blockchain as the underlying fabric can connect different IoT applications, enabling them to exchange digital assets in a transparent and trustworthy manner. In particular, large-scale decentralized and autonomous IoT applications can be built upon individual applications by leveraging interoperable data.

• Fair distribution of values: Cryptocurrencies and associated token economy models provide powerful tools for incentivizing all the stakeholders in IoT ecosystems. Aligning the stakeholders’ benefits in a fair and consistent manner is the main force for transforming the IoT industry and forming the flywheel effect.

• Endless innovation: By combining IoT with the value exchange layer powered by DeFi, NFTs and DAOs, the IoT industry is able to create new business models and build a wide range of community-driven, machine-centric applications. Such digital transformation will bring endless innovation opportunities to IoT ecosystems.

MachineFi represents a paradigm shift in the way IoT systems are designed and monetized. It considers all of the stakeholders in an ecosystem and incentivizes them to move the value-creation flywheel continuously. The exciting future of an IoT for all of us is no longer a dream. It's a reality.

Dr. Xinxin Fan is the Head of Cryptography at IoTeX, a startup empowering the future machine economy with blockchain and IoT.

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