Like most people pressed for time, I scan the news headlines just to get a sense of what’s going on in the world, from the missile antics of North Korea, to the frenzy state of bitcoin. Speaking of bitcoin, there’s been a wave of news lately regarding the legitimacy and astronomical price increase of bitcoin. Many financial analysts are warning the bubble will eventually burst, while others claim it’s the digital currency of the future, and you need to invest now.
Everyone seems to be discussing bitcoin. My wife’s clients are asking if she accepts bitcoin payments, and I hear middle school and high school kids asking how to get their hands on the cryptocurrency. And why wouldn’t they? Just this year alone the value of bitcoin has jumped 1,700%! At the time of this article, one bitcoin equaled $18,721 US dollars. But the currency is so volatile it could be double that amount tomorrow, or even crash to pennies on the dollar. You can head over to coindesk and watch the price skyrocket, or plummet, faster than a Kim Jong Un missile. Just recently, Federal Reserve chair Janet Yellen stated the Fed did not have the authority to regulate bitcoin, so where the price is headed...is anyone’s guess.
If you’re not familiar with bitcoin, here’s a brief overview. This is by no means everything you need to know, so if you want to get into the bitcoin nitty-gritty, head on over to bitcoin.org and check out the basics for new users. As I mentioned, one bitcoin currently equals $18,721 US dollars, and it operates with no central authority or bank. Transactions are managed by peer-to-peer technology and conducted worldwide. The bitcoin network relies on a shared public ledger called a “blockchain” and all confirmed transactions are included in the blockchain. You may have already guessed the blockchain is prone to hacking, with millions of dollars being stolen via malware, Trojans and various other hacker tricks.
A deeper dive into bitcoins and the blockchain led me to the “Internet of Things” or “IoT”. The IoT is a network of physical devices embedded with electronics and sensors which allow the devices to connect and exchange data. IBM estimates by the year 2020 there will be 50 billion connected devices, and those devices will be creating, storing and sending data points. Smart utility grids, smart homes and cars, remote patient monitoring and personal wearable devices, to name a few, will create a machine to machine economy that some are calling the fourth industrial revolution. Chances are you may already own a connected device that fits into your daily life (i.e. Apple Watch, Fitbit, Nest Thermostat).
As sensors spread to almost every industry, the data generated will be massive and will require analytics to gain valuable insights. Let’s take the utility industry, for example. Within the utility industry, smart grids produce millions of data points which can be analyzed to allow for predictive maintenance and load balancing based on current demand. Recently we modeled the relationship between residential customers’ PQ&R satisfaction and the number and duration of interruptions the customer experienced.
Not surprisingly, the frequency of interruptions is overwhelmingly more influential in predicting PQ&R satisfaction than any of the variables we analyzed. Using sensor data to perform predictive maintenance could prevent interruptions before they happen, thus increasing overall consumer satisfaction.
The Internet of Things really comes together with the connection of sensors and machines. The value in this connection is the gathering of data and using it in real time. IoT will see exponential growth in the next 1-2 years, and we’ll be discussing what it means for data, security, your home and everything else that connects us to the digital world.