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drawers in a bank symbolising a database

The Future of IoT is Blockchain

Imagine that you came across a beautiful piece of art on the Internet. You were mesmerised by it and immediately wanted to thank the artist by sending them a message about how they had inspired you and how well they had done.

Midway through typing the message, you realise that a few words might not be the best way to inspire the artist. While the words might motivate them to “keep going” and “keep creating” amazing pieces of art, impacting their audiences, you realise that a small monetary contribution is really what they need to keep working.  Sometimes this is the kind of help artists really need.

However, while you’re not a millionaire – and can’t purchase the original artwork, you would still like to give them something to show your appreciation.  So – while the artist now knows that you truly admire their work, you decide to “tip” them. However, when you look at the transaction cost of tipping $5, you decide to forget about it and go to bed.

So many others that have gone before you just gave up and ‘went to bed’.

We are going to reveal some revolutionary changes that are going to change the way you think about the Internet of Things (IoT) .  Especially in terms of the payment systems in use today.

Our team at GADGETCoin, a revolutionary in the world of decentralised exchanges and micropayments, truly believe that the future of micropayments and IoT is blockchain. We offer a trip to the future with our ever-growing ecosystem that solves the very problems that current payment systems cannot.  But we are not going to brag – not yet.

drawers in a bank symbolising a database

Anything that stores data in an organised and easy-to-access way is a database.  

What is blockchain?

A blockchain is a distributed ledger of transactions – most notably, transactions involving cryptocurrencies.

Think of a blockchain as a spreadsheet that has data about a basic income/expenses statement of a family living in a relatively expensive city. Each sheet represents each month.

There is an inbound flow of money (via profit from business/income from work) and then there is the outbound flow of money, which is the expenses. The family keeps a track of each transaction that happens – even a simple “Dad, can you give me a fiver?”.

Now imagine that this spreadsheet is maintained through several years – this means that it will have data about income and expenses from when it started to the day when someone wants to review it. Moreover, anyone can recover what they are looking for by setting some filters.

Because this spreadsheet is stored on the cloud, every single member of the family can access it and thus edit it whenever anyone does a transaction.

The spreadsheet is a database for this family. Blockchain is just like this database.

It is a store of transactions that happen between the community using cryptocurrencies. A key defining feature about it is the fact that it is incontrovertible. No one can tamper with it; no one can falsify it; no one can destroy it.

All these things are possible with the spreadsheet that we talked about above. Moreover, a spreadsheet stores data in tables, and blockchain stores it in blocks. A spreadsheet can be accessed by a limited number of people. Everyone on earth, however, can use the blockchain.

How can a database be the claimed future of the Internet?

Interesting question. It is the immutability of blockchain that makes it unique in ways beyond our imagination. Let’s take an example.

Suppose you are a writer who has just conceptualised a revolutionary crime thriller that is going to make Gen Z fall in love with reading. You get so overwhelmed by the idea that you immediately ring up your writer friend and talk about it. She isn’t as impressed by it and dismisses it as a such-a-cliche.

A few months later, you see her signing a contract with a publishing house for a “jaw-dropping crime thriller never seen before”. How would that make you feel?

What if, however, we were to say that blockchain offers a solution where you can mint your idea as an NFT onto the Ethereum blockchain and secure its copyright? Because it is on the blockchain, no one can ever steal that idea and call it their own.

If the power of blockchain can be applied to something as vague as an idea in your head, imagine what it could do real-world industries?

  • Automotive industry: Record the real parts/machines on the blockchain and track them down to their end use. Because the real ones are on the blockchain, the counterfeit ones aren’t and hence can be tracked.
  • Healthcare industry: Do the same for real and counterfeit drugs. And/or, use blockchain to store personal records of a patient – by creating that as an NFT, perhaps?
  • Public/Government: Use blockchain transactions for votes. Because it is a transaction, the source can be traced.
  • Real estate: Store contracts of properties as NFTs. Because they are available on the blockchain, they can be easily accessed and can provide information about the real owner.
  • Banking: Remove the annoyingly hard processes of loans by implementing decentralised finance. Get much higher returns on savings (stake) in crypto than with a traditional bank.
  • Finance: Use blockchain tech for truly implementing micropayments.

As you can tell, the possibilities of what blockchain can do are truly limitless. And thankfully over the past ten years since its first result (bitcoin) has seen widespread adoption (albeit as an asset class); we are only seeing a more widespread adoption of blockchain in several contexts.

But to stay focused here, we will talk in detail about how it aids micropayments.

Can you easily send $0.50 to someone online? 

What are micropayments?

Micropayments – as the name suggests – are payments of extremely small amounts made electronically. There is no “least” amount set that will be considered as micropayment. It can vary from as low as $1 to as high as $20 depending on different payment systems.

The concept of micropayments is not new and has been around for several years. In fact, DigiCash, founded in 1989 was one of the first companies to revolutionise online currency and conceptualise micropayments.

Over the years, there were several companies who attempted to enter this space but failed because of a lack of adequate technological infrastructure or a global overall reluctance towards accepting it. They were all worried about one thing – where is our profit in micropayments?

Unsurprisingly, it was Apple’s insistence on selling a song for less than a dollar that also contributed to a change in the way giants like MasterCard and Visa looked at micropayment models. As the acceptance towards this model grew, and technology found a way around bundling several micro transactions into one, it started to find more takers.

PayPal was, for years together, a revolutionary micropayments transaction system, and truly a first-of-its-kind online payments system that facilitated peer-to-peer transactions.

However, there were (and still are) limitations/challenges.

With fiat currency, there are limitations to the amount you can transfer – this is largely because of the growing transaction fees. For instance, PayPal has a micropayment rate of 5% + $0.05 USD per transaction.

Moreover, the technology that supports these micropayments take a while (read: several days) for the funds to be cleared.

To help us around these problems comes blockchain.

How does blockchain aid in micropayments?

The primary way that blockchains help in facilitating micropayments is by reducing both the transaction costs and the time it takes for the funds to be transferred.            Also, since its cryptocurrency and the immutable blockchain, chances of a transaction failing because of a system breakdown (in case of a middleman) are quite low. And the transactions take 1/100th the time it takes banks to do it.

But there are challenges here as well. (Isn’t that life?)

A traditional blockchain like that of bitcoin’s or Ethereum’s can only process roughly 5 and 30 transactions per second respectively. Compare that to Visa, that can process 1700 transactions per second, and MasterCard with roughly 5,000 transactions per second.

Conservative investors will now say, bitcoin is slow, speculative, and of no use. But they are truly living in a bubble dismissing it like this.

To increase that number, the original blockchain needs to be scaled. The only problem with scaling the original blockchain is that once that happens a specified set of nodes or computer systems are required to handle the additional load of transactions. But this will render a bad reputation for the blockchain because it will then become centralised – exactly what they are not known for.

This is where sidechains come in.

Sidechains are the answer to simultaneous micropayments on blockchain

Think of sidechains as independent blockchains that are linked with the original blockchain. The reason why they exist is to give a breather to the original blockchain by having all the transactions being completed on them before they hit the original blockchain.

Micropayments on the blockchain are carried in two major steps.

  1. When you deposit funds you open a channel, or create a smart contract and add funds to it
  2. When the receiver claims those funds, the channel is closed

These channels can be further customised to serve a single purpose or being unidirectional. That is, they are only supposed to “open” the channel or initiate the contract. This will ensure that the funds are deposited. These types of channels are particularly useful for merchant and consumer scenario.

What is the added benefit of a sidechain for micropayments?

The biggest benefit of having a sidechain is that any security compromise does not result in a breach in the main blockchain. Also, the funds can easily flow between the two ledgers.

When you transfer funds, they get locked on the root chain and are then released onto the side chain. This helps in their free movement across the sidechain until the process reverses and they go back to the root chain.

An SPV (simplified verification proofs) is employed that validates that the coin floating around on the side chain is already available on the root chain. Because this process does not require a client to “download” the entire blockchain, it is quick.

Thus, you can see that using sidechains for micropayments enables us to not only have more transactions per second but also increase the scale of its usage.

What is the GADGETAccess platform?

Now that we have explained everything you needed to know about micropayments and sidechain, give us permission to brag about ourselves. Don’t worry, this is humblebrag, and we can back every single statement we make.

We utilise the blockchain-within-a-blockchain network to provide an efficient and reliable transaction system that can be utilised as an alternative to the more traditional payment systems.

  • We provide industry-leading encryption, sophisticated monitoring and best-practices architecture to fulfil compliance requirements.
  • Our project is a one-of-its-kind that addresses the high GAS fees on Ethereum by utilising a sidechain-based settlement process.
  • Our project brings peer-to-peer, private, trustless micropayments within a complete ecosystem that offers seamless exchange, integration, efficiency, performance, and simplicity.

We believe that the IoT is exceedingly limited when it comes to coping up with the technological changes and capabilities that blockchain is providing to its users. If you were to go around on discussion forums to examine what people really think about micropayments, then you’d notice that there are two schools of thought.

 

  • The first type believe that micropayments can never be made possible because it just doesn’t cope up with the high transactional value in the case of fiat currency.
  • The second believe that because of blockchain the revolution is already here.

 

Needless to say, we adhere to the latter opinion. More importantly, blockchain is indeed powering  Web 3.0. Think about metaverse, or NFTs, or decentralized finance – things that we could only imagine in movies or dream about are now not too far away.

 

So, my friends, blockchain is indeed the future. And we are the revolutionaries who will take you there.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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