The popular and dying blockchain + Internet of Things is revived again. What’s different this time?

Wu Shuo Author | Tan Shu

Editor of this issue | Colin Wu

On April 8, Coinbase announced on its blog that it would list four new projects, including 1inch, enj, nkn and ogn. Among them, NKN performed the best. According to coinmarketcap data, as of 5 pm on April 9, NKN's price had risen by 43% in the past 24 hours and 545% in the past week.

NKN is a project of a Chinese team. Its founder is Li Yanbo, the co-founder of Onchain (NEO). It was launched on the NEO network in 2018 and later migrated to the Ethereum network. At that time, NEO and ONT had risen sharply, and users had high expectations for NKN. However, due to the bear market, NKN later broke the issue price by as much as 80%, which attracted criticism from the community. Now it is listed on Coinbase, which finally proves its value to a certain extent.

NKN focuses on the concept of the Internet of Things. This year, the entire Internet of Things sector has performed well. Another project from a Chinese team, VeChain, has entered the top 20 cryptocurrency market capitalizations, and Helium (HNT), which focuses on low-power wireless networks suitable for the Internet of Things, has also entered the top 100 in terms of market capitalization (currently, the top 100 cryptocurrency market capitalizations include Vechain ranked 20th, IOTA ranked 25th, and Helium ranked 83rd. NKN's current ranking has risen to 115th).

Since NKN applications are relatively basic, Helium is more promising and has received investment from Google. Although the Internet of Things, which is mainly based on Bluetooth and WiFi, is deeply rooted in China, there are many types of low-power transmission devices in Europe, and the Internet of Things has many opportunities in some niche tracks, such as Helium's main product Lora. In the future, NKN's listing on Coinbase also means that several other high-quality Internet of Things concepts may be listed on Coinbase.

The Internet of Things and Blockchain Technology Are a Natural Match

As for the application of blockchain technology, in addition to using cryptocurrencies for value storage or speculation, the biggest landing may be in the Internet of Things. After all, if BTC can redefine the value storage tool and DeFi can redefine the investment method, the transactions between objects in the Internet of Things can also be redefined through blockchain.

The market for the Internet of Things is also enormous. According to a report released by McKinsey in June 2015(1), by 2025, the total economic output related to the Internet of Things will reach US$11.1 trillion. The market value of cryptocurrencies has just exceeded US$2 trillion this year. This shows that there is huge room for the development of blockchain projects based on the Internet of Things concept.

Take Helium as an example. It uses blockchain technology to connect low-power routers and chips, providing a decentralized wireless network that spans the globe and provides underlying network support for IoT devices around the world. According to its [map](2), Helium currently has more than 20,000 nodes around the world. Even in China, many people are "mining" by providing Helium hotspots. This IoT mining model also makes the community's ideal of decentralized distribution of mining a reality.

Challenges of IoT blockchain

Although the concept of the Internet of Things is not new, blockchain is still a new thing after all. Therefore, blockchain projects based on the concept of the Internet of Things also face huge challenges, mainly in several aspects.

1. Stability

When blockchain is applied to real life, the requirements for stability will be very high. Imagine applying blockchain based on the concept of the Internet of Things to smart cities. If there is a problem with the blockchain, it will inevitably affect the lives of countless people. The old blockchain project based on the concept of the Internet of Things, IOTA, once faced such a problem. In February last year, the main network of IOTA [suspended] (3) for 11 days. Such reliability is obviously not yet applicable in real life.

2. Security

The Internet of Things involves the transmission of massive amounts of data, and data is often related to people's daily lives. If a data leak occurs, it will inevitably have a serious impact. At the same time, the decentralized nature of blockchain also brings difficulties to supervision. For example, when an accident occurs in the blockchain of the Internet of Things and causes losses, how to hold it accountable becomes a problem that regulators need to consider.

3. Scalability

In an era where every chip or sensor is an IoT device, the scalability of the IoT blockchain is bound to be very important. In an idealized concept, solar panels can sell excess electricity, and users in need (such as Bitcoin miners) can automatically buy excess electricity, and the settlement is automatically completed without human involvement. For such a large amount of data and a small amount of money, the scalability of the IoT concept blockchain is very important.

IV. Competitiveness

To be fair, almost no blockchain projects that are combined with real-world applications have been successful, largely because the team often focuses on issuing tokens and finance. Helium also has some of this tendency. Investors and public opinion are more concerned about the design of its financial model, and not much attention is paid to whether its application layer is competitive.

In 2017, IoT blockchain, led by IOTA, was very popular, but it died down with the coming of the bear market. With the development of IoT technology, the demand for blockchain is bound to increase day by day, and it may become another hot spot in the future.

[1]:https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/the-internet-of-things-the-value-of-digitizing-the-physical-world#

[2]:https://explorer.helium.com/coverage

[3]:https://news.bitcoin.com/iota-down-11-days/

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