TM Forum are supporting the Monetizing IoT conference series. In this recent blog, Craig Bachmann – Chair of the Open Digital/IoE steering group – shares his thoughts on the use of blockchain technology to facilitate the monitization of IoT.
Will blockchain unlock IoT’s trillions?
We’ve all heard the mind-boggling predictions about the Internet of Things (IoT): For instance, Cisco estimates that there will be 50 billion devices connected to the Internet by 2020, from trash cans and parking spaces to streetlights and cars.
When it comes to revenue potential, the predictions are promising too. IDC suggests that by 2020, IoT market revenue will be $7.1 trillion, while McKinsey predicts an annual $11.1 trillion in economic value by 2025.
However, the big challenge is coming up with a set of solutions that can scale fast enough and affordably, to handle trillions of dollars’ worth of transactions, many of them for very small amounts, as well as maintain security and privacy expectations. This is a key part of the IoT monetization challenge: How can businesses quickly identify revenue-generating opportunities and execute on them?
Enter the blockchain
Alex Tapscott, co-author with Don Tapscott, of Blockchain Revolution, is quoted as saying, “The Internet of Things needs a Ledger of Things. It needs a way to score what’s talking to what, who owes who money, and reconcile all of that.”
This highlights many of the issues TM Forum recently outlined in our Internet of Everything Roadmap of Challenges whitepaper, created collaboratively with the TM Forum Open Digital Steering Group. The challenges identified include finding effective ways to monetize IoE services, ensuring security and privacy, partnering and business model innovation.
Blockchain technology could offer an answer to these. Wikipedia defines a blockchain as “a distributed database that maintains a continuously growing list of data records secured from tampering and revision…Each block contains a timestamp and a link to a previous block.”
Blockchain is best known for its use as the public ledger for bitcoin transactions but it has many applications beyond this – from transparency in the food chain to reinventing banking and transforming the energy industry.
There are big opportunities for communications service providers too. Analysys Mason outlines nine areas where telecoms operators could deploy blockchain technology. These include use cases for internal BSS/OSS processes (such as billing, eSIM provisioning and number portability databases) and value-added services. They could include micropayment-based business models for digital assets, including music, mobile games, gift cards and loyalty points. This plays into the ability to innovate with new business models for digital services – essentially enabling the multi-sided platform economy.
Keep reading on Monetizing IoT.