There is no question that Bitcoin has gone mainstream, although many people still associate the decentralized digital currency solely with criminal activity on the dark internet. However, more and more established companies and well-known investors are interested in Bitcoin businesses.
It's hard to pinpoint exactly what Bitcoin is because it has so many facets. Bitcoin is a protocol, network, and open source software platform. The most important value proposition is to send money instantly over the internet without the need for a central authority – just like email (or spam!) For information.
Because of its built-in scripting language, Bitcoin is truly programmable money. The underlying technology, blockchain, could even lead to innovation outside of the financial sector.
What does this have to do with the Internet of Things?
We at the Napollo IoT Lab see the IoT as a system in which “… practically everything physical in this world can also become a computer that is connected to the Internet”. When you think about (and write) business models for the IoT, the idea quickly arises that “virtually any physical thing” can become an autonomous player in a global data market. “Market” means that data is exchanged for money, doesn't it?
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Take an example: some organizations install a nationwide network of sensors to determine the availability of parking spaces. The infrastructure costs a lot of money (after all, nationwide), but the data collected is valuable for many interested parties. As you drive around looking for a parking space, bring up an app and see real-time data from around 20 sensors.
How do you pay for these records? Today we would think that the service provider has a contract with the sensor infrastructure provider. As a user, you would have to have a subscription with the service provider or you would have to “pay” with your personal information while using the app. But there is another possibility: Why not pay the sensor directly for every single data set it provides? Bitcoin could be extremely helpful here – or even necessary.
Bitcoin is open to everyone and everything and therefore every sensor can have its own Bitcoin account free of charge and without human intervention. But how much would a single data set be worth? Probably not much; Let's say less than a cent. While I doubt traditional payment systems can manage this in a cost-effective way, there are a lot of developers (remember Bitcoin is open source) right now working on micropayment systems that use Bitcoin.
