Bitcoin, the Internet of Things (IoT), and Big Data are some of the most promising new innovations of the 21st century. What are these different technologies, and how are they related?
Bitcoin and Blockchains
Bitcoins are being increasingly used for everyday transactions and its practical uses are being recognized by retailers and bankers alike.
Funnily, one of the earliest items Bitcoin was used for was the purchase of alpaca socks by US Congressman Jared Polis to demonstrate the ease and effectiveness of the new digital currency to his colleagues in 2014.
We have come a long way since then, where Goldman Sachs has taken out a special report on the practical uses of blockchain in an investor newsletter in May 2016.
The Spanish bank Santander even launched a new app to allow people to use and transfer bitcoins using blockchains. So one can imagine the endless uses this technology will provide once the adaptation into the general psyche is achieved.
Internet of Things (IoT)
The big explosion already underway is that of IoT where devices – heck, even people – are connected with each other.
IoT has given way to three way wireless connections between people-people, people-things and things-things.
So basically, the dropping broadband prices across the world, the default wifi and Bluetooth settings across devices of all range and variety, and smartphone penetration to the lowest levels will ensure IoT becomes a way of life. All devices can be slowly interconnected and will become interdependent with just a click on your phone.
IoT theoretically has the ability to take convenience to a whole new level where it can save you the effort to think about best route possible for traveling to a meeting location by looking at your calendar and checking up the internet updates for any delays on the intended route. Taking it a step further, it can even inform the other party of your late arrival and tell you the best turn to take to find a parking spot quickly.
The plausible applications can be to build “smart cities” where wifi connectivity between different departments and local administration help in managing traffic, informing breakdowns on roads and highways to the police, and patrolling and monitoring through drones and various other wifi-enabled devices which can send signals within a few minutes. It can help in controlling wastage, predicting so many patterns and discerning needs at such minute levels that it will seem something out of a science fiction movie.
Big Data is basically large amounts of data flowing in from various sources by interactions between people, devices, and various systems in place. This data such as spending habits, financial transactions, payments, preferences (likes and reactions on social media), etc. The key is in using them effectively to glean important valuable information hidden in these incoherent and unstructured reams of data.
So… Where’s the connection?
This is where it gets interesting.
All these things – blockchains, IoT, and big data – are happening on the same devices. Some of these devices are for personal use, but others are corporate, non-profit, education, or government devices. Thanks to the Internet of Things, there will be a huge stream of Big Data.
Step in Mr. Bitcoin with its ability to keep transactions safe and secure without a major fuss.
So Big Data generates tempting offers after reading through your spending patterns via the devices part of your IoT atmosphere and you quickly avail the offer by using a Bitcoin without waiting for conversions of foreign currencies or paying hefty processing fees or any third party intermediary help.
Thus, such computing power is going to be almost akin to Artificial Intelligence which will work on predictive models to tell you what you would do and would probably do it before you even think about it.
Another important aspect is how blockchain itself is a treasure trove of large amounts of information and can give specific information of users, attempts to transact, passed transactions and attempted hacks and frauds. This is easier said than done as most of this information is derived from various nodal information on the blockchain.
As exciting and stupendous it sounds, it will be a while before we get to this stage.
Blockchains for one will become a reliable basis for accumulating such transactions and patterns and will also work in tandem with data analysis to predict fraudulent and abhorrent behaviour.
Of course, the pros and cons of so much connectivity will bring up issues of privacy and data security which will need to be addressed before such thinking even becomes a reality. Adoption of bitcoins as a reliable payment system in itself will need few years with central banks and one which needs to pass many tests of value, safety, transportability and recognition during the time of the transaction.