Internet of Things (IoT) simply relates to everything connected through the internet. However, it is usually utilized to describe objects that are ‘talking with each other for the past few years. The IoT is comprised of various devices, from smart wearables to sensors. These devices are connected to a computerized system that makes it possible to collect information, examine, and conduct the proper action. In 2022, it is projected that a cryptocurrency framework will empower more companies related to the Internet of Things.
Early History of Cryptocurrency
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Cryptocurrency is a by-product of another innovation. In the latter part of 2008, Satoshi Nakamoto claimed that he successfully developed a P2P Digital Monetary System. His original aim is to invent a system that is inexistent before digital currency. Perhaps the most decisive factor of his invention was he discovered a way to develop a decentralized digital asset system. During the 90s, many attempted to develop this system, but all failed to do so. After Satoshi noticed several attempts in the past, he decided to create a system that does not contain a central entity. It leads to the development of cryptocurrency. Satoshi realized that the P2P Network for file sharing is the missing part of the digital cash system.
To simplify matters, a digital monetary system requires transaction, balances, and accounts to function. The main problem that they usually encountered in the past is how to prevent ‘double spending.’ It is the prevention of a single entity spending a similar amount two times. Double spending is typically conducted by the central server maintaining the database on the balances. By introducing a decentralized server, this problem has been eliminated. All single entities found in the cryptocurrency network will have to do their job. All of them need to have a database containing the transaction to allow them to examine future transactions.
How IoT and Cryptocurrency Can Work Hand-in-Hand
It may be true that the world has been adapting slowly to the cryptocurrency system despite its high potential in developing a secured digital transaction. In theory, experts believe that it can be used to advance IoT. For example, instead of using your credit card on your internet-connected refrigerator, using bitcoins to purchase milk will be a lot easier. Here are some conditions that need to be met before the IoT and cryptocurrency can work together.
The Adoption of the Online and Physical Realm
The existing PoS (Point of Sale) system needs to adapt to this latest currency system for the cryptocurrency to power a new system. It will require at least one year of programming before today’s point of sale system can handle the task. Apart from the online adaption, the physical world will also need to welcome these changes.
It Should Be Compatible with Consumer IoT Gadgets
The best cryptocurrency will be compatible with the IoT devices of the consumers. For instance, it will allow your car to purchase fuel when required and refill the stacks in your refrigerator. However, for the industrial sector and other large-scale industries, the integration of bitcoin may be a bit overwhelming. It may be slow, but we will eventually get there.
IoT Will Advance Microtransaction
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Cryptocurrency is indeed the future of money. With regards to its integration with IoT, the main concern would probably be the readiness of the current financial system to accept this and drive the people to charge for products and services on a micro-level. For instance, when your LED lamp lights up, will the financial institution have the capacity to keep up to the high demands?
Eventually, Cryptocurrency Will Happen
When the cryptocurrency system finally evolves, the chance that this will be the driving force behind IOT is highly likely. It is due to the capacity of the system to protect the data collected and conduct secured financial transactions. In fact, no other system can offer this level of security. However, the standardized system should be altered to implement this successfully, and the regulatory environment needs to be developed.
The market value of different cryptocurrencies varies; however, their liquidity remains the same. As of this moment, there has been an unpredictable movement on the value of cryptocurrency. Like the price of everyday commodities and services, the value will depend upon the supply and demand of the product. If people demand a specific type of this digital currency and the supply is scarce, the value will increase. To maintain the flow of the demand and supply, people will need to mine more units. However, some systems set restrictions on the number of mined units.
Lightweight and small devices comprises Internet of Things. Nowadays, we are looking at the devices that a centralized server manages. Tomorrow, it is possible to see The IoT driving themselves through a decentralized system similar to cryptocurrency.