How Blockchain + IoT Will Enable Autonomous Negotiation

Tallinn town center: a beautiful result of the Hanseatic League — a decentralized consensus building marketplace

An IoT Overview

An explosion in the reliability, robustness, and affordability of a wide range of sensors, combined with significant improvements in power consumption, processor power, and data connectivity has resulted in the possibility of tracking, tagging, monitoring and identifying pretty much anything we produce these days. We’ve come some way from from slapping a bar code on a can and scanning it manually in the shop.

The Relevance of Markets

Identity, reputation, a medium of exchange, contracts, reliable bookkeeping, and the authority to act are all separate and yet essential components in the provision of a corruption-free, fair and accountable marketplace. Those of you who have already spent a significant amount of time thinking about blockchain’s capabilities will already see where I am going with this.

Putting It All Together

When you consider all the above components in isolation, you are left with a collection of interesting components. But as is usually the case for blockchain, it is only in combination that it becomes apparent that a ecosystem can function like a bazaar or a confederation of guilds. That is to say, it is effectively a virtual network of “merchants”, “bankers” and “craftsmen” realized in software, working in a specific area. In the blockchain example, “bankers” are the combination of the medium of exchange and the ledger, “craftsmen” constitutes the IoT devices and the data they produce, and “merchants” consists of the companies and software services that allow the system to produce useful work.

Jemaa el-Fna bazaar in Marrakesh. An analogue parallel dating back a millennium that could now inform a digital version.

The Automatic Bazaar

Now we’re ready to make the final leap, dig in to the fun part, and really start playing with ideas. What could be done with an automatic bazaar? What if there was a possibility of a simple, truly rational market, because the participants have no emotion, and are just looking to optimize their returns, and are able to take the big picture into account (and profit from that).

About the author

Keir Finlow-Bates is an inventor and CEO of Chainfrog, Finland’s first blockchain startup, focusing on IoT/blockchain innovation. Chainfrog develops blockchain components providing provenance, identity, data permissioning and other IoT relevant innovations. Feel free to contact me to find out more.

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Keir Finlow-Bates

Keir Finlow-Bates

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CEO and co-founder of Chainfrog Oy, a Finnish startup researching and developing advanced blockchain technologies.