Internet of Things
As technology becomes more advanced, the concept of “Internet of Things” is becoming more and more feasible. A relatively recent idea, Internet of Things (IoT) is defined as the interconnection of physical devices through the internet, and how these “things” can share data amongst themselves. Within the scope of IoT, “things” refers to physical devices such as home appliances, vehicles, or other computing devices embedded within common objects. The strength of IoT lies in being able to sense and control objects remotely through the network of “things,” which allows for machines to respond to new data faster than any human being ever could. More importantly, IoT is the foundation for a lot of future technology such as self-driving cars, which requires data to be collected, processed, and acted on in milliseconds in order to avoid collisions and drive efficiently. As the Internet of Things is still in nascent stages of development, there are technological gaps in fully realizing IoT. One of the largest gaps today is in how data can be transferred and analyzed between networks.
Perhaps the highest profile solution to managing data flows within and between IoT networks is IOTA, a rising star of the cryptocurrency world. IOTA is a blockless distributed ledger that looks to create a data marketplace for the Internet of Things (IoT). The competitive advantage between IOTA are twofold. First, IOTA is offering a means to exchange data between different IoT networks – which could have real-world implications, such as driverless cars that exchange real-time traffic information between each other in order to minimize traffic congestion. Second, IOTA is creating a new, non-blockchain transaction model that can process transfers significantly faster than traditional blockchain technology, such as Bitcoin or Ethereum. The new transaction process is called Tangle, and it has raised the limit on transaction throughput. It’s clear that investors recognize that IOTA’s creation of a data marketplace is extremely valuable, and has been reflected in the enormous 450% growth in the company’s Market Cap since November 15th, as IOTA represents the first tangible means of data transfer to occur between different IoT networks.
Streamr DATAcoin Overview
While IOTA clearly holds the first mover advantage for the IoT data marketplace, competition has emerged in a rival cryptocurrency called Streamr DATAcoin. A much younger cryptocurrency, Streamr DATAcoin is a part of a quickly growing data marketplace called the Streamr network. In comparison with IOTA, Streamr’s core competencies lie in two different areas. First, instead of replacing traditional blockchains, Streamr is leveraging Ethereum to create a platform that facilitates real-time transfer of information. Second, Streamr is actively appealing to non-technical users by making a Streamr Editor that allows for easy development of applications without prior coding knowledge, which means growing the network is easier due to lower barriers of entry. It’s important to realize that Streamr’s investors have strong confidence in the technology, which is reflected in the substantial 210% growth since last November 15th. One of the reasons why Streamr’s growth hasn’t taken off is due to the fact that IOTA is still dominating headlines, but a quick comparison between the two demonstrates that Streamr is built on more stable technology and the implementation may be more feasible.
The Importance of the Data Marketplace
IoT, as a concept today, is focused primarily on all the devices communicating within a network. What IOTA and Streamr bring to the table is the ability for data to be transferred between different IoT networks, which could have profound implications on development of IoT technology and future research. For example, imagine a smart city that can autonomously monitor usage of all device’s electricity usage for all residents. Armed with that information, the smart city can adjust energy allocation preemptively or on the fly based on sudden increase in a single device’s usage. In a real-world example, it would be able to catch situations such as the UK tea-time energy surges in real time and take immediate action to account for the increased load. By being able to analyze devices drawing electricity, it’s possible to make adjustments that make the energy grid of a smart city even more efficient. Without being able to get granular information from different IoT networks (smart homes, in this case), adjusting for these scenarios becomes much more difficult – if not impossible, as it’s not possible to attribute what is causing the increased energy usage.
IOTA vs. Streamr: The Importance of Scope
When it comes to choosing to invest in either IOTA or Streamr, an important consideration is the scope of each project. Many projects fail when scope creep occurs, which is when the direction of a project shifts or requirements snowball over time. When looking at both projects, it’s clear that IOTA’s team is taking on significantly more than Streamr’s team. The largest task for IOTA’s team is the creation of Tangle, a new transaction process, from scratch. The amount of brainstorming, development, and testing is enormous; and any error will shake confidence in the security of the product. Unfortunately, on July 14th, 2017, a team of researchers at MIT’s Media Lab found glaring red flags in the which took three weeks to fix, which means the $2B IOTA cryptocurrency had a three-week window where users could steal funds from others – a cripplingly long time window for such a large issue. To this day, there are still cryptocurrency experts are staying away from IOTA due to the severity of past bugs and trust issues with the team.
Streamr, on the other hand, is building on the tried-and-true code of Ethereum. In order to overcome the limitations associated with transaction throughput, Streamr is utilizing Ethereum as a means of purely exchanging contracts and not data. Instead, all data transactions occur off the blockchain by utilizing the Streamr’s proprietary data processing engine. By leveraging the verification process of Ethereum, the development team of Streamr can instead focus the majority of their attention on the off-blockchain parts of their technology, which include the processing engine, application development platform, and making key business deals. As the core of the transaction model is rock solid, it allows the team to focus entirely on their off-blockchain portions of their product. Ultimately, this will mean Streamr’s development process will become much more nimble than IOTA’s, as they are not bogged down by extensive testing associated with the transaction process.
Streamr: Appealing to Non-Technical Users
Another key advantage for Streamr is ease of use – both for those familiar with blockchains and new, nontechnical users. Streamr is actively building out an application development module that allows users to develop Streamr applications without any programming knowledge. With a drag-and-drop interface, it turns creating applications into something that resembles Legos, allowing end-to-end app creation to take minutes. IOTA, on the other hand, is alienating users due to the fact that they are creating an entirely new transaction process, which means people will need to learn how Tangle works regardless of prior blockchain knowledge. As the barrier of entry to join Streamr is significantly lower than IOTA, building up a network to hit a critical mass is much easier for Streamr. When it comes to creating a marketplace, hitting a critical mass of buyers and sellers is an essential step of success – and Streamr makes it so much easier for users to join.
Rapid Growth Lies in Proper Planning and User Acquisition
Ultimately, the rapid growth of both IOTA and Streamr indicates that the creation of a data marketplace could fundamentally change IoT interactions by allowing inter-network communication. The value of this technology has not been lost on investors, and the positive reaction can be seen in the enormous market cap growth of both IOTA and Streamr. While IOTA has performed extremely well in the past, it has done so by being the sole competitor in a marketplace with enormous potential. The rise of Streamr could very well threaten IOTA’s current position, as it brings a more nimble development team and a much lower barrier to entry.