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Blockchains and APIs

Major technological advances are providing opportunities for new business models, based on blockchain, which will see an increase in the number of connected devices in our day-to-day lives.

By Abhinav Venkat, Noah Data.

Blockchain technology

Major developments in current technology are now unravelling the marketplace for secure data, providing a vast, untapped store of opportunity for both enterprises and individuals. New business models based on blockchain will enable us to take lead of the technological growths in transport.

One of the prime changes we are likely to see in the next era is a mammoth invasion in the amount of connected devices on which our lives will depend. The IOT space is gearing up for a colossal expansion and will most definitely touch numerous facets of our lives.

We are probably going to see over 20 billion connected devices, from traffic lights to  cash machine, self-serve kiosks in coffee shops and retail outlets, sensors and robots on production line floors. Also, as critical as the power and gas that at present powers our reality, will be the information that streams between these gadgets.

For instance, the arena of Computer vision and autonomous vehicles has become reality only with the support of enormous datasets, conjoining millions of heaps of driving footage that comprises of images collected from multiple camera viewpoints, along with Light Detection and Ranging sensors, Global Positioning System and various other systems.

In the coming era, Individuals themselves i.e; the Voluntary information/data that we provide are the emerging source of kind of intriguing information apart from existing methodology of receiving information through connected devices. For Instance, recently the Unites States (U.S) fast food chain reported an enormous dip in sales over a quarter. Ahead of the official outcome,US based social media company predicted this fall with an astounding accuracy and their prediction was based on the number of individuals checking in with various outlets of the Franchise or using their app with geo location switched on

Imagine electric vehicles (EV) which could communicate straight with toll highways to agree smart pricing at different intervals of the day and directly pay the road providers to use these routes, selecting the one that is cheapest without the driver having to make a sensible choice. Hence, the vehicles could even sell their own data back to the toll highway firms to report back on traffic volume, weather conditions and other such information’s.

Of course, it is no use having enormous amounts of raw data if you cannot trust the source or put it to use in any meaningful way

Most companies believe that data is a treasured commodity, and is one worth hoarding: the more you have of it, the more you can learn from it, and make modifications that will drive business success.

APIs – What it actually does?

APIs are the most accessible and easiest way to make this happen.In recent years, the significant rising trend for businesses and governments to release their own data into the remote for public consumption, and for developers to create their own apps on top of this.

An API offers a related subset of data and — in few instances — lets the application accessing it to erase, add to or modernize the content.

A rapid scroll through the accessible data reveals a treasure-trove. If a developer wants to build their own app letting individuals to plan their route through London on public transportation, to check on their bus delays, all the information is at their fingertips which is a great instance of an API that has laid copious valuable apps is the Transport for London Unified API.

Till now, we spoke about APIs being used by larger company as an opening to their own data so that individual developers can create apps on top of them. But the adversarial can also be true.

If, as an individual, you have information that can be monetized, you can provide your own API, to be consumed by various other developers or enterprises. So, what kind of data are we talking about?

The data about connected devices gives us a clue. Not only are we providing an infinite stream of information directly from our phones, but we might choose to equip our homes, our offices — even ourselves — with different sensors.

This is where trust comes into the equation. If data is being provided via the API of a government, or a large, well-known organization, another similar organization may be ready to use it. Correctly or incorrectly, this information is professed to be more steadfast.

In fact, this is a controversial topic. New technologies which implement systems such as reputation systems and decentralized networks are able to diminish the single point of failure that is related with data loss from one specific provider.

Earlier, technology did not offer a means for business or individuals of a certain size to become dependable contributors to information networks. With the sinking cost of sensors, the ubiquity of cellular phones and the amplified enthusiasm of individuals to share at least a part of their data, the single game-changing technology that makes this hopeful is Block chain.

“Conferring to individuals the ability to transact and interact without the need to trust each other is the most important feature of this technology. These almost immutable data records, with their timestamps that cannot be altered and the inability to game the system by altering a record on several nodes, show that decentralization is indeed a game-changing alternative to the previous ‘walled garden’ model of centralized, heavily protected data records.”

Smart contracts

The Ethereum blockchains have taken the idea of a decentralized permanent record and developed a system which does something else entirely.

A ‘smart contract’ is not something that is enforceable in law. Instead, it is a small script that is able to be executed on all nodes across the whole network of a suitably designed blockchain.

A smart contract may do something as simple as print out the ubiquitous ‘Hello World’ greeting, or it may do something far more complex, such as making a payment to a particular person or account as a response to certain conditions being met.

This is an important advance simply because it enables transactions and events to be generated that are both autonomous and decentralized. No longer is a human ‘approver’ or a single entity in charge of manually generating a payment or signing off a deal.

To give a concrete example of a pilot project that ran on the Ethereum network, EtheRisc provided a smart contract which, in return for the participants paying in a small amount of Ether (the native currency of the Ethereum network), insured them against the risk of their flight being delayed.

Without a human risk adjuster having to be involved, the contract consumed data from the APIs of the relevant airlines and, in the case of a delay, the inconvenienced party received a payout, simply from the script being executed.

All parties to the contract were able to see what was going on: the process was entirely transparent and not open to being gamed.


It is this ability to make payments directly, in small increments, without incurring banking fees or — potentially — exchange rate fluctuations between national currencies, that is key to being able to implement much of this new technology.

Using the traditional banking system, with its intermediaries, centralisation, delays and lack of operability begins to look like a bad idea.

In the same way that Bitcoin is the native token of the Bitcoin blockchain, most blockchains have some kind of token that is used for payments. Transaction fees vary according to the network, but are generally lower than mainstream banking fees.

Networks such as IOTA (not technically a blockchain, but similar) have been devised to allow minuscule amounts of money to change hands instantly, untouched by human intervention.

This is one of the most exciting possibilities of our automated future.

To go back to the mobility example, as autonomous cars develop, ride-sharing and car-pooling suddenly becomes an opportunity for income generation. When a passenger enters the car, the car calculates the cost associated with the trip and determines value-based pricing depending on the level of demand, weather conditions, city zone, etc. The legal agreement — including all relevant insurance — is flexible and frictionless, conducted via smart contract, with no need for an explicit cash payment.

Tokens and Cryptocurrencies

Tokens — like Ethereum — have attracted media attention for their rapid price rises when they are traded, but in fact that is one of the least interesting things about them.

While some blockchains have tokens which are digital representations of real-world assets such as gold or company shares, it is blockchains offering utility tokens that have the potential to power our new world.

So, what are these utility tokens? All this means is that the token can be exchanged for a unit of a particular service. Lets think of it this way, if you have an AWS account, this gives you access to Amazon’s cloud computing services. You have to keep the key secret or someone else may use services for which you are billed.

In the same way, if someone gains access to the private key to the wallet where you keep your tokens, they will now own the units of the service you purchased when you bought the tokens.

A good example of this is the SONM project, which rents unused processing power. When most people use their computers for everyday tasks, they only use a fraction of the capability of the machine. Conversely, people who need to run processor-intensive tasks such as rendering CGI or crunching huge datasets for financial applications have a desire to complete these tasks quickly without having to purchase extra hardware. Using the native token of the SONM network (SNM), buyers and sellers can transact seamlessly, while the payment is handled in the background, transferring payments denominated in SNM from buyer to seller.If the processing is split between 100 machines, the payment to each seller might be tiny.

Traditionally, the barrier to these kinds of payment has been the cost of channeling money through a centralised entity such as a bank, where the fees are disproportionate to the size of the transaction. But using the native cryptocurrency of the same blockchain that prices the service and matches buyers with sellers makes sound logistical and economic sense.

SONM is a global, open sourced, decentralized supercomputer that anyone can access

Putting it all together

People have talked and written extensively about the sharing economy — Airbnb, Uber, eBay and the like. But slowly the excitement about the disruptive possibilities of these new companies has faded, to be replaced with fears about monopolies and poor working conditions

A true sharing economy is one in which individuals and companies are empowered by technology to share their data and — if they wish — receive payment for it.

So, imagine once again that you are an individual with a small weather station in your garden. There are many customers who may benefit from access to this information, and who would pay for it — if they knew it to be accurate and that no one could have altered the past data.

Imagine if you could provide this data — trusted because it has been verified over time on a blockchain — either to a third party who would aggregate it into their API, or create your own API independently.

Your data could be consumed by transport companies, by automated factories deciding the number of warm-weather or cold-weather clothes to produce, or by hundreds of other potential customers.

Providing the infrastructure for this to happen is a huge growth area for technology in this second decade of the 21st century, and it is the companies which can create the foundations for these truly shared platforms that will survive and thrive.

Bio: Abhinav Venkat leads Noah Data’s consulting practice across US and UK. He has a wealth of analytics/consulting experience helping organizations define, design and implement analytics road maps enabling fact based decision making.

Original. Reposted with permission.