- Decentralized data marketplaces offer more transparency, efficiency, and security than traditional centralized systems.
- IOTA is used in the data marketplace ecosystem to merge, analyze and process datasets from various sources for diverse applications in smart cities.
Decentralized Data Marketplaces in Making Cities Smarter
As digital technologies continue to disrupt various sectors, distributed ledger technology (DLT) is emerging as a popular solution. DLTs like blockchain are decentralized databases that offer benefits like transparency, efficiency, and security.
In a decentralized data marketplace, all contributing peers communicate with similar privileges, creating a fairer and more trustworthy platform. Smart contracts and DApps can also be employed to provide a decentralized solution to address challenges in data marketplaces.
Benefits of DLT
DLTs like blockchain have become popular since the advent of cryptocurrency like Bitcoin. Blockchain is a public ledger centered on consensus protocols that provide a verifiable, append chained based data structure of transactions.
DLT allows data to be updated and stored distributivity, which reduces the risk of the entire digital platform failing. In a blockchain network, a consensus protocol is instantiated on many distributed nodes called miners to preserve the sanctity of the data stored on the blocks.
Decentralized Data Marketplaces
In a decentralized data marketplace, all contributing peers within the network communicate with similar privileges, creating a fairer and more trustworthy platform. The data provider uploads the data to advertise these datasets to data consumers who access the data marketplace using the peer-to-peer distributed network.
The datasets uploaded by the data provider comprise raw encrypted data saved on the cloud server. However, the limitation of this decentralized data marketplace approach is that data consumers cannot completely trust the shared dataset.
Smart Contracts and DApps
Smart contracts are self-executing scripts deployed within blockchain that enable parties to autonomously make payments based on the contract in a transparent way. DLT aids the implementation of decentralized applications (DApps) which are developed in the form of a smart contract and executed on a DLT network to deploy predefined agreements and algorithms without depending on third-party involvement.
Therefore, smart contracts and DApps can be employed to provide a decentralized solution to address challenges in data marketplaces.
Related Works of Data Marketplaces in Smart Cities
Several studies have explored the use of blockchain and other DLTs to facilitate trading of IoT data in smart cities. The studies have proposed blockchain-supported data marketplace systems that help address issues related to regulations, efficiency, fairness, privacy, and security.
The studies have also developed cost-effective blockchain-based IoT data marketplaces based on a credit invariant, semantic-driven data marketplaces, and smart contract-oriented review applications for an IoT data marketplace.
Designed Ecosystem for Data Marketplaces
To develop data-driven services in smart cities, there is a need to develop decentralized data marketplaces that allow datasets from different sources to be merged and analyzed, processed, and acted upon to support the deployment of diverse applications.
The ecosystem for data marketplaces is designed based on IOTA tangle and MQTT protocol, providing zero fees for miners and supporting micro-transaction systems via a secure data transmission protocol. However, there may be challenges for IOTA tangle to directly monitor data flow via MQTT connections, making fair enforcement of trade contract difficult.
🏙️Smart cities need data marketplaces, but how do you trust the data?🤔
This study designed a decentralized brokered enabled ecosystem powered by the #IOTA Tangle, which supports data sharing and guarantees data integrity & immutability.
Here's how👇 https://t.co/teeuAiZ5IC
— IOTA (@iota) April 16, 2023