IoTeX’s vision for the Internet of Trusted Things is expansive. We will redesign how people, devices, and businesses interact in the digital world. We will shift control from profit-hungry institutions to everyday users. We will build a trusted ecosystem where our devices work only for us. But before we reach the Internet of Trusted Things, we must first have a critical mass of trusted things (devices) to establish a foundation for sustainable growth.
This is why we are launching Burn-Drop, a new tokenomics design to fuel the rapid onboarding of the first 1 million “Powered by IoTeX” devices. In the coming months, new devices across smart home, transportation & logistics, and healthcare will begin their lives on IoTeX. With every new device, a variety of network effects will be unlocked that will bring new utility and value to IoTeX. So what exactly does IoTeX look like with 1 million devices?
In this post, we dive into the powerful network effects that will emerge from the IoTeX Network as it scales from 0 → 1 million → ♾️ devices. There are two important concepts we use to guide our thinking. The first is Metcalfe’s Law, which links a network’s value to its unique connections. The second is the device-infrastructure innovation cycle, which outlines how technology ecosystems evolve.
Metcalfe’s Law and IoTeX
The IoTeX Network is a canvas that connects people, devices, and businesses, allowing them to engage in win-win interactions. The greater the number of potential win-win interactions, the greater the value a network generates. This network value methodology is classically described by an exponential relationship known as Metcalfe’s Law.
According to Metcalfe’s Law, with one million devices on the IoTeX Network there will be ~500 billion unique device-to-device connections. As the number of possible network connections grows exponentially, the number of useful network connections will also grow, paving the way for new win-win scenarios. The more devices are connected, the more utility the IoTeX Network will have! This all starts by achieving a critical mass of devices to begin exponentially scaling the connections/utility of the network.
A critical mass of devices will also unlock powerful human-to-machine and business-to-machine connections. We are nearing a future where humans/businesses will transact directly with machines, such as in the sharing economy to hail transportation or to command robo-workers along a supply chain. Although what is being connected differs, the same network effects and opportunities for new win-win scenarios exist. If one person has ten devices in their home, 45 new human-device and device-device connections will ultimately emerge. With every new human, device, or business onboarded, new network effects will be unleashed and the total size, utility, and value of IoTeX will grow.
With an exponentially growing number of connections, IoTeX users may choose which win-win opportunities they wish to pursue. This is what makes IoTeX an open network and why our vision is fundamentally different than the IoT of today, where users surrender autonomy to centralized tech giants that choke value for themselves. The current IoT is artificially constrained with tech giants inserting themselves in between every interaction. By onboarding the first one million IoTeX devices, we will not only exponentially grow the size of the network, but also instantiate an entirely new ecosystem of win-win, peer-to-peer interactions. The Internet of Trusted Things will unspool the connections away from centralized parties, spreading the IoTeX platform’s power and amplifying the total network value exponentially.
The Device-Infrastructure Innovation Cycle
The IoTeX Network consists of trusted devices and applications that are built on top of the IoTeX platform, which includes a variety of tools/resources including the blockchain itself to IoT-oriented middleware to dev tools/APIs to external service providers. Let’s think of the full range of IoTeX offerings as the infrastructure available to power devices. Our infrastructure is not built in isolation, rather it is built in parallel to align with the devices it seeks to support. For example, building Ucam required IoTeX to build new infrastructure in order to support our vision for a private security camera.
This virtuous cycle of new infrastructure empowering new devices, and new devices demanding new infrastructure is what we call the Device-Infrastructure Innovation Cycle.
As shown in the graphic above, IoTeX has already undergone an intense infrastructure building phase. Over the past three years, the foundational infrastructure was built in the form of Mainnet GA (“Machina”), which is now powering the world’s first private smart devices that let users #OwnYourData. However, new infrastructure will need to be built in order to meet emerging requirements of next-gen devices. As other frontier technologies (e.g., AI, 5G, VR) mature and more service providers join the IoTeX Network, we can expect this cycle of device-infrastructure innovation to lead to an ever-evolving set of devices and infrastructure that ultimately feed off of each other.
The emergence of a critical mass of devices will jumpstart this device-infrastructure innovation cycle, bringing us closer to the Internet of Trusted Things. The first wave is cresting now with IoTeX Mainnet GA & DID serving as the backbone for #OwnYourData devices like UCam. The second wave is now underway with confidential computing and decentralized identity (DID), which will empower a new wave of devices that can compute in a privacy-preserving fashion. The following device-infrastructure waves will be multi-threaded, with new infrastructure enabling exciting AI-based use cases, data marketplaces, and much more. Throughout the coming years, IoTeX’s infrastructure will evolve to meet the needs of its human and machine users.
What Happens at One Million Devices
One million “Powered by IoTeX” devices is not the finish line; it is the starting line. The journey to one million will drive incredible momentum until device growth becomes self-sustaining — a flywheel of adoption attracting service providers, devices, and users to the ecosystem organically. Like compounding growth in a portfolio, progress that begins slow shocks with its ever increasing ability to expand, bloom, and change form. This is the magic of network effects and Metcalfe’s law, and it is also the magic of well-designed tokenomics. Bootstrapping is everything, and IoTeX is committed to aligning incentives, sharing the rewards of growth with our token holder community, and ultimately our community of devices and service providers.
We will see IoTeX Tokenomics come to life starting with Burn-Drop, which will #IGNITE in the near future. Remember that to be eligible for Burn-Drop, you will need to auto-stake your IOTX for ≥91 days! For more information on IoTeX Tokenomics, please see Part 1 on the utility of the IOTX coin, Part 2 on the DAO-based mechanics, and Part 3 on Burn-Drop and bootstrapping plan.
Founded as an open source platform in 2017, IoTeX is building the Internet of Trusted Things, an open ecosystem where all “things” — humans, machines, businesses, and DApps — can interact with trust and privacy. Backed by a global team of 30+ top research scientists and engineers, IoTeX combines blockchain, secure hardware, and confidential computing to enable next-gen IoT devices, networks, and economies. IoTeX will empower the future decentralized economy by “connecting the physical world, block by block”.