Blockchain technology will allow IoT users to monetize their data, and smart cities are the key

Imagine yourself in the future. You get up and your coffee is already made for you, perhaps even your entire breakfast. Smart kitchen utensils are preparing your scrambled eggs, and the smart fridge reorders soy milk as you take out the almost empty bottle.

You are probably not reaching for your phone; instead, voice commands will bring up the latest information – messages, news, weather or traffic reports, on any surface you want: the TV, the fridge door, the bathroom mirror. Or no surface at all, if holograms and virtual displays replace OLEDs and plasma devices.

An AI system has prepared the daily schedule, ordered the Uber or the autonomous car at exactly the time you need to leave the house for work. In the car, you link to the local display and check your stocks and bitcoin holdings. When you arrive at work there is no entering the parking garage; you simply leave the car while your payment is processed. The car moves to an induction charging platform while waiting for the next customer.

There are no queues at the elevator because not everybody arrives at the same peak hour. The elevator, prompted by you walking through the main door, arrives and takes you to your floor, without you ever pressing a button. You enter the office where the lights and AC are already on.

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Virtual screens pop up in front of you and you start your day at work, perhaps monitoring environmental conditions or the waste management systems of this smart city. Data from millions of sensors is collected, analyzed, and actions are recommended as pipes in one part threaten to overload, and toxic effluent is detected at the edge of an industrial estate. An AI notices the local maintenance crews or inspectors while typing up a report of the night’s events, which is read out to you while you lean back and dream of your next vacation.

It is 9:30 in the morning and the Internet of Things around you has already processed millions of gigabyte of data. Chips implanted in your body remind you to exercise and the AI schedules a doctor’s appointment and makes a restaurant reservation based on your registered preferences, after you confirm that you’d like today’s special lab-grown meat burger at a particular brand new restaurant. And on the way home, the autonomous electric car makes a slight detour to avoid traffic or pollution or to pick up your date for tonight, who has been notified by the AI 3 minutes before you arrive at their doorstep.

At this point you are screaming STOP! What about privacy? All these interconnected systems know way too much about you, your routines, your physical condition, your dating habit, and your work attendance. And what about safety? Everything has been working smoothly so far, but what if any component gets hacked? The dream of ultimate efficiency and convenience becomes a nightmare of social control once we take security under consideration. The technological overlord controls far too much of your life.

Is this the future we want?

Yes, of course, but only if you, the consumer, are ultimately in control of your data. If the AI supports you, and doesn’t manipulate you. If the systems work hand-in-hand with humans. If machines serve humans, rather than the other way round.

Right now this is not possible, because the big collectors of data, from Apple and Amazon to Google and Uber, and all the industrial systems data agents in between want to be in control of your data. We have let the Internet revolution create corporate giants that are not accountable to anyone but themselves, and if you happen to live in places like China, where you have been watched and monitored through face recognition from the moment you got up in the morning, to the time you go to bed, you feel even more helpless. That doesn’t even include your health bracelet or implanted glucose monitoring chip.

Where is the balance between convenience and security?

The answer to the question of privacy, security, safety, and human rights, may be the blockchain. We cannot create an IoT ecosystem fit for humans if private companies or governments control all the data.

Big corporations control our data, but we the consumers offer these companies something very valuable: massive amounts of personal data. To be honest, we are getting very little in return. It’s a bad deal. As automation and robots are taking our jobs, many of us will be left with only one option: monetizing these data.

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Is blockchain the key to monetizing?

Some startups proclaim with conviction that blockchain technology is the way to safely monetize personal data in the future. And don’t underestimate how much data there is and how valuable it is. Google and Apple know, based on your phone’s GPS position, where you will likely be at a certain time of day; meal ordering services like UberEats know what you are likely to order. Selling the combined dataset of thousands of people could influence the pricing in local restaurants or the choices on their menus.

In medicine, big data, machine learning, and medical records controlled by insurers, big pharma, or even your local hospital, may decide whether giving you a specific drug is worth it or not.

It goes further. We now have pavements that create kinetic energy, and your house may generate energy through solar panels or intelligent coating on the walls. Your walking makes money in the form of energy, your mere living in your connected house produces data for the grid. Your recycled and purified wastewater could be sold back to the utilities. That data too is valuable, and you should be reimbursed for it.

How does blockchain monetization work?

Blockchain’s distributed ledger approach could combine all these data streams and reimburse you in crypto assets or hard currency. But there is a problem. People don’t live just in one place, they move around, from city to city, from country to country. Cities around the world would have to coordinate their approach to blockchain monetization or adopt open protocols that are transferable between locations. In other words, a global, neutral, decentralized system. In a system so vast, one good hacker could bring the world to a standstill

Blockchain proponents claim that the decentralized, distributed ledger is absolutely hacker proof. Any security expert will tell you that every system ever called hacker-proof has ultimately been hacked. Even if it isn’t a malicious attack, solar flares, earthquakes, wildfires and any number of misadventures could bring even a global, decentralized system to its knees, as long as it is sufficiently interconnected.

Finally, whole regions of the planet will be left behind, because they do not have the wealth, the political will, or the physical infrastructure to benefit from any of this. And then there are the Luddites: there will be a huge number of people who will want to opt out of this technological overlord. If their jobs have been automated, how are they to survive?

The Future of the Internet of Things is not a question of technology, but social planning … and quantum computing.

It’s not the ledger, it’s the proof of work

In other words, the blockchain enthusiasts and technology futurists are confusing technological revolution with social revolution. It does not matter how many problems blockchain solves, what matters is how many problems it creates. At the heart of blockchain is not the distributed ledger concept, but the proof of work. Trillions of blockchain entries of work will require a huge amount of “proof or work” steps. Those take time and energy.

Only quantum computing will bring this increase in computing power. But quantum computing makes all our security protocols and encryption systems obsolete, which brings us back to the problem of hacking. We still don’t have the answers, but one thing is clear:

We should not attempt to build a global IoT ecosystem until we have addressed all these problems.