August 18, 2021

IOT and blockchain payments - A perfect fit

Recently, Zippie announced partnership with BORQS, a Nasdaq listed global leader in IOT. Many of my friends recently asked what blockchain has to do with IOT, so I thought to write a few lines. 

IOT, machine to machine Internet is already a huge hundreds of billion dollar industry today. Household appliances, like fridges and heating systems are connected to the Internet and there is a massive amount of industrial applications monitoring the production systems and logistics flows around the world. 

Machines are able to send data to each other and “talk” to each other, but one thing is still missing: machines need an ability to price, pay, and bill each other and humans. 

A fridge will need to be able to decide from where to buy the milk and bread, and on the retailer side, the machine needs to be able to dynamically price and make offers based on the stock situation at the time. 

Let’s take another example: sea containers. There are about 40 million containers in the world carrying 2 billion tons of cargo annually. Many don't know this, but containers provide quite a good return on investment for their owners, in the range of 10-15%, but this investment is out of reach for retail investors. This can be changed with IOT and blockchain. The container’s IOT device records the usage of the container and once connected to a blockchain payment solution, the container can rent itself and charge its rent and pay the lease to the owner of the container. The container could even purchase its own insurance. The container ownership can be recorded on blockchain as an NFT and easily sold to a new owner with the future revenues accumulation to the NFT smart contract. 

Carbon credits could be automatically released and paid from a reforestation project based on biomass growth evidence provided by the satellite data. A blockchain smart contract stores the carbon credit buyers payments on digital escrow and payments released as the biomass in the project growth. Naturally, the carbon credit balance of the reforestation project will be recorded to the blockchain so that anyone can follow and be sure that there is no double spending of carbon credits. 

Blockchain is the obvious infrastructure for IOT payments for several reasons:

  • Payments taken place in blockchain are natively programmable. This is what machines need: machines need pre-programmed rules how they should price and execute funds transfers
  • Any application can be openly integrated into blockchain infrastructure and blockchain is the only payment infrastructure where tens or hundreds of operators can easily join instead of siloed industrial solutions. 
  • Secure authentication and signing rights are the core parts of the blockchain payment solutions. They are critical components of the IOT payments to make sure there is no misusage. 

Does this sound futuristic? It should not, as the technology is ready. It just needs to be implemented. That’s what we do.

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