Streamr, the brainchild of creators Henri Pihkala and Nikke Nylund, aims to change the way we think about data streams in the future IoT (the Internet of Things).
What is Streamr?
Streamr published a two-minute explainer video that was shot in an understated and intentionally-casual “vlogging” style.
Creating the “Data Stream Economy”
In this video, Pihkala gives us a quick description of how his project is supposedly going to work. Pihkala says that his project aims to “tokenize real-time data.” He describes this “real-time data” using examples such as traffic information, weather data, and electricity prices at electric car charging stations.
His project intends to monetize, or “tokenize,” these data streams through the use of a token called DATAcoin. Pihkala goes further by saying that these tokens will not only be tradable by humans but also autonomously between machines – wholly independent of any human intervention.
The entire project runs on the Ethereum network and is powered by a large web of nodes that will exchange, provide, or facilitate the exchange of information.
Users of this data, such as the example of a smart car, can consume data and pay for it with DATAcoin. They can also produce their own data and automatically sell it to various buyers and advertisers. Pihkala describes this process of buying and selling data streams as a “data stream economy.”
A Conversation with Founder Henri Pikhala
While all this sounds interesting on the surface, is this really the future of data stream monetization for the IoT?
I had a few questions about how this was going to work, and so I had a brief chat with Pihkala regarding a few of the questions that I had. Pihkala was happy to answer my questions, of which I will outline below.
Plans for a Streamr ICO
I first wanted to know if Streamr would be running an ICO like many other Etherum-based blockchain projects like Golem and Augur. His answer: there are no plans for an ICO at this time, but it could happen.
Acquiring the DATAcoin
I then asked him how users, data providers, and sellers, or investors and speculators could acquire the token. Is it mineable? Are the tokens pre-made in the same way Ripple’s XRP is?
Apparently it’s not quite that simple. His answer: There are three ways to get DATAcoin.
- Buy or sell it directly in exchange for something else
- Run your own node for the sole purpose of facilitating transactions (similar to a Dashb master node)
- Sell data, operate a data stream, or create a data product others want to buy
Pihkala notes that the second method is the closest to what a casual observer would call mining.
Data Streams for the Everyday Person
What kind of data streams could a normal person produce and sell? I can imagine a few real-life use cases where this kind of distributed data stream could be valuable.
There are devices available now that actively test for air quality, something like the AirVisual Node but for outdoor use, and report this air quality data through the internet. If a city or a team of researchers wanted to study air quality in a given area, they could hire hundreds or thousands of privately-operated air quality sensor nodes for cheap and compile this data into something useful.
At present, most cities have fewer than a dozen of these sites. Having hundreds or thousands of these points of data could be invaluable. It’s easy to imagine that an individual could purchase such a device for a few hundred dollars, and after a few months time, they perhaps would achieve break-even and then start making a daily or even hourly profit.
Another example could be the smart refrigerator. A person could agree to sell the data regarding what is in their refrigerator to an online grocery store or food manufacturer so they could follow food trends, or a research team could study food waste, how quickly milk goes bad, or any number of other data points.
The Cost of Running on the Ethereum Blockchain
There is one small catch to consider: Streamr is built on the Ethereum blockchain. These sorts of nodes will require a certain amount of Ether in order to process these transactions.
Pihkala says, “Nodes report proofs to a smart contract regularly, costing transaction fees in ETH. How often this happens depends on network parameters. The mechanism is designed so that this doesn’t need to happen often, and in fact, shouldn’t happen often at the moment due to current high transaction costs and limited Ethereum scalability. As rarely as once per day (per node) would be fine, and gas price can be set to low since there’s no hurry. Obviously, costs cannot exceed the rewards for the incentivization to work.”
This requirement of Ether in order for a node to operate may prove to be a major wall preventing the casual potential node operator from getting involved until things have already taken off. While it may not prove fatal to the project, it is still something anyone considering opening a node needs to consider.
If the Ether price continues to skyrocket, will the value of the earned DATAcoin continue to justify the operating of a node? And what about his example of the smart car… would a casual, non-technical motorist need to purchase Ether for the smart functions to work?
At this point the investor in me is asking, what will a DATAcoin be worth in five years time?
While we don’t know anything about how many of these tokens will exist in the future, I think it’s safe to say that the value of each token will likely be very low, perhaps just pennies per unit.
I suspect that it will be similar to the Ripple network and its XRP token. Billions of units selling for a low price individually, but combined having a massive market cap in the hundreds of millions (or even billions) of dollars.
Closing Thoughts on Streamr
It’s clear to me personally that Streamr represents an amazing idea, one that could be revolutionary and all encompassing in scope.
A good idea, however, will not be enough for this platform to succeed. I would suggest to Mr. Pihkala and his team that his best route to success will likely be appealing to people’s greed. Once the “Average Joe” realizes that they can set up various sensors with their appliances to bring in a steady stream of income – small or not – this might be what really captures the imagination of the masses.
In closing, I would like to recall something that I heard many, many years ago, deep in the dark ages of the 1990s.
As the internet started to become popular, much in the same way that we are seeing cryptocurrency assets finally take off, wild ideas started to fly around about what the internet could do as visionaries let their imaginations run wild.
I recall reading a newspaper (yes, a newspaper) saying that some of these visionaries predicted we could order our groceries on the internet and have them delivered to our house. The idea seemed ridiculous, far-fetched, even downright foolish at the time. I don’t think it’s necessary to say that those naysayers were proven wrong. However, how long did it take for them to be proven wrong?
I have a strong feeling that Pihkala is something of a genius wunderkind, a blockchain prodigy and futurist of the highest order. I just hope that he hasn’t arrived on the scene too early for his own good and that the world will be ready for him when he is ready for it.