The IOTA Foundation is thrilled to introduce an ambitious project that has been in the making since 2015 which will be. The Data Marketplace is IOTA’s most comprehensive pilot study thus far. The goal is to enable a true decentralized data marketplace that opens up the data silos that keep data limited to a few entities as is the case today. Data is one of the most imperative ingredients in the machine economy and the connected world.
Data is the foundation upon which the other stratum of the Data Information Knowledge Wisdom (DIKW) Pyramid are dependent. Without this primary substrate, nothing can be established about the world. A datum (plural: data) is the raw value of a qualitative or quantitative variable; pure unfiltered inputs from reality. Data sets that are structured and thus have its meaning extracted in what we consider information. Information tells us something concrete and coherent about the world through context. Contextualized information make up what we know as knowledge, which give rise to our and our machine’s wisdom; wisdom is knowledge applied.
The illustration above shows how the different echelons of this hierarchy are intertwined: The sensors, here cameras, monitoring the road are receiving the signals from the photons reflecting of the surface of its environment. This is data. The measured speed of the moving objects and their positions is the meaningful information extracted from these datum inputs. Information has been established. This information is now contextualized and distilled into knowledge, telling the drivers on the road via Over-The-Air updates that the road may be congested due to a crash, which allows us to apply the wisdom to take an alternative route.
Over the next next decade there will be more than 75 billion connected devices that interact in different manners. This will give rise to a ‘Machine Economy’ where devices will trade everything from storage, computation/analytics to eletricity and sensor data. The data trade and this pilot project will highlight the latter and explore the potential it has. With the prospect of 10s of billions of devices generating data we will see a proliferation of data that is unmatched in history.
In 2017 more data was generated than in the past 5000 years combined, and this will be 10 folded in less than a decade. We are truly living in the era of data.
Crudely put, data is the new crude
It is effortless to draw parallels between the tectonic shift caused by the impact oil and its derivatives had in the past century in terms of giving rise to a fossil-fueled economic combustion engine and mass-production through plastics with how data will be the catalyst the economic engine of the future.. While every filament of our digital zeitgeist is unequivocally telling us that data is the fuel of the future, there is an important distinction, unlike oil which is finite and whose properties are well known in terms of what it can produce (and pollute), data is for all practical purposes limitless.
We have barely scratched the surface of what kind of data will be generated or what incredible discoveries will be made by AI algorithms analyzing it in the future. New innovations, precision medicine, synergistic business models, climate change diagnostics, materials and more are already on the horizon. Just like our brains acquire wisdom and knowledge through the information it distills from the data it receives from its sensory organs, so does the world changing AI paradigm shift require data from sensors to derive new information, knowledge and wisdom.
Big Data is Big Business
The sheer magnitude and influence data has and increasingly will have on our society automatically come with huge business opportunities in the tens of billions in the next few years. Trading data will be a mutually beneficial exercise that both boost innovation for companies as well as create entirely new revenue streams of data that would otherwise just go to waste.
Data wants to be free, but not for free.
The largest obstacle preventing the fulfillment of the grandeur envisaged by ‘Big Data’ is the fact that the overwhelming majority of data remains locked in what is called ‘Data Silos’. Data silos do not, or at best very rarely, share its data outside its own closed environment. This leads to enormous quantities of wasted data, often over 99% is lost to the void, (source: McKinsey 2015) that could potentially contain extremely valuable information if allowed to flow freely in data streams that create an open and decentralized data lake that is accessible to any compensating party.
There are several reasons for this cumbersome and wasteful status quo. On one hand data wants to be free in the sense that storage and transmission of it costs less and less, on the other hand the large quantities of data is extremely valuable and is not free to generate. These diametrically opposed conditions cause a gridlock that needs to be breached in order for Big Data to become truly big. A major cause of this is the fact that while data sharing is becoming cheaper from a technological perspective, it is prohibitively expensive to sell fine granular data in Real-Time due to the fees of intermediaries, not to mention all the red tape one has to cut through first in order to complete a single purchase, making Real Time data trade impossible. By 2025 it is projected that around 95% of all data will be real-time and generated by IoT (source: IDC 2017), so this is a pressing issue.
A third crux is the lack of ensured authenticity and audit trail of data. Before adoption of Distributed Ledger Technologies, data transmission protocols and databases are susceptible to various attacks, including ‘man in the middle’ attacks and tampering of the data. Data is only as valuable as it is valid. In short: if the data input is garbage, the output will also be garbage (GIGO).
This is where the IOTA protocol becomes necessary to unlock this gigantic potential.
IOTA’s unique public Distributed Ledger architecture called Tangle is a form of Directed Acyclic Graph where every transaction and data transmission validates two previous ones, which again reference their two previous ones and so on. This means that validation of the network is an intrinsic property of using the network and thus is no longer decoupled from the usage of the network, as is the case in regular blockchain architecture. This removes fees entirely on transactions and data transmissions, resolving the real time and fine granular payment obstacle, as well as ensuring data integrity for free, resolving the security concerns tied to data trading. Additionally this means that the network is entirely decentralized, unlike blockchain architecture which centralizes around mining-farms which again centralize into mining-pools.
This project has roots stretching years back and is now finally ready to begin its first phase with public testing.The Data Marketplace is open for everyone to participate right now, and over the coming weeks we will be opening up an API for the marketplace so that anyone can contribute with their sensors, and build new data-driven applications. Right now the entire Proof of Concept runs in real-time on the IOTA test network, with full end-to-end data verifiability and security offered via MAM in the users browser.
Over the coming weeks, the IOTA Foundation, in collaboration with several of the marketplace participants, will release additional content, including Proof of Concept applications, that further elucidate how the data marketplace can be applied to different industries and applications. Most importantly is the community participation, where the IOTA Foundation will host several events over the coming weeks to make the data marketplace a truly global, collaborative effort. The final result of the data marketplace will be a public report alongside several case studies, that go into detail of the potential and the barriers we will face when rolling out a marketplace in production. Major emphasis will be dedicated to the impact of GDPR on a data marketplace.
The IOTA Foundation is exhilarated to be able to announce that we have several dozen world-leading entities participating in this data marketplace which will run over the next 2 months. We deem it pivotal to have such a plethora of varied data sources from multiple stakeholders participating in this pilot to nurture the blossoming of this seed of potential and move beyond grandiose promises and theory and into the real world.
Quotes from the IOTA Data Marketplace participants:
“Today we are working closely with a wide range of key technology providers in the blockchain space and we are happy to have the chance to participate in the IOTA Data Marketplace project. We want to have a deeper look in IOTA technology to grasp hands-on experience and provide our client the right understanding of IOTA and its potential business implications.” -Accenture Labs in Sophia Antipolis
“Agder Energi appreciate to be invited to collaborate with IOTA and the rest of the participants. We are excited to get to know the Data Marketplace and explore the opportunities in IOTA’s distributed ledger technology and particularly usage within the energy industry. Will the technology enable P2P trading of power?”
– Rune Hogga, Agder Energi, Project Manager Pilot E
“With the democratization of data through the IOTA platform we see the start of an abundant world. We will move towards a world where we will give people access to clean water, food, energy, health care, education, and everything else that is necessary for a having a good life”. Anders Lier -Chairman Nordic Impact /Advisor IOTA
The engagement of people for a world with less CO2-emission is important, monetizing their investment into renewable energy-production & -consumption by offering their “Energy-Information and -Flexibility” to a market. With IOTA is “Energy-Information and -Flexibility” getting a pricing and is a real incentive to be a part of a world with renewable energies