Smart Markets: Paving the Way for Autonomous Machine to Machine Micropayments and Interactions

Data is the new oil; except there is no decline curve.

More data will come into existence in the next few years than in all of human history.

This exponential trend shows that by 2021 there will be over 3.3 zettabytes of IP traffic alone. That’s 3,300,000 petabytes of information. Google, Amazon, Microsoft, and Facebook combined store roughly 1,200 petabytes, only 0.036% in comparison.

Most the world’s data today is fragmented and noisy. Some data lives in centralized legacy infrastructure where it is monetized by behemoth tech companies. The way we process, use, and pay for data is ripe for revolution as the decentralized internet of value grows. This chain reaction started with Satoshi Nakamoto, but intelligent machines will be the ones to inherit the earth and create decentralized commerce of the future.

The ingredients are already here: cryptocurrencies and smart contracts. Smart contracts are at a larval stage of development. Blockchain-based digital assets are still evolving too. The union of AI-powered machines, cryptocurrencies and logic-driven smart contacts form the basis of smart markets. These are hyper-efficient markets processing big data and transacting in infinitesimally small amounts. In tandem, they create an autonomous marketplace pulling from a decentralized feed of real world oracles. This is where machines-to-machine (M2M) micropayments begin.

Machines are constantly chatting today, processing data faster than ever before. Intelligent machines will become the predominant market participants in these hyper-efficient markets. Eventually they may become the only agents to refine, process, and barter the new oil. As a result, human intervention will be rendered obsolete. Protocols of the old internet lay the foundation for this communication network. As the blockchain evolves, intelligent machines will be able to converse, compete, and transact with one another. Mobius implements the mathematical canon of how machines will talk, negotiate, and trade data from a decentralized network of oracles. The ERC20 landscape cannot securely and cheaply handle the high-throughput processing efficiency required to handle increasingly sophisticated M2M interactions devoid of human intervention and oversight. This is why the future of decentralized commerce will not belong to P2P interactions but M2M interactions.

If data is the new oil, then blockchain Smart Markets are the new refinery. Mobius is paving the way to mathematically define and implement these markets into cryptographically secure and robust code.

Smart Markets are periodically clearing auctions that coordinate trade between pools of participants: AI-driven smart contracts that are limited to fixed values. Clearing the market means maximizing the gains from trade. It is integral to efficiently aggregate information that participants supply in the form of bids and asks. Mobius creates a mathematically defined Smart Market protocol that is blockchain agnostic. This often requires the ‘market translator’ to solve complex optimization problems with arbitrary constraints.

Since the blockchain is an immutable transaction hyper-ledger, it provides a great way to coordinate trustless trade. These are hyper-efficient markets between decentralized real world data feeds and machines.

Imagine a blockchain Smart Market for electricity: Let smart devices in households directly buy electricity from a decentralized network of generating units. Such a system would have an AI mandated to reduce power consumption. Whenever prices are low enough a smart contract would power mundane electrical devices. It could be truly decentralized by incorporating micropayments with digital assets. Individual devices with independent smart contracts would directly participate in the Smart Market using Mobius. With this in mind, it is easy to envision unprecedented Smart Markets trading data between decentralized oracles and smart contracts.

Blockchain Smart Markets would reduce transaction costs significantly and eliminate negative externalities. All the while allowing for competition not possible in more traditional settings. Barring myopic regulatory intervention, it’s possible to see coordination between diverse smart contracts, at levels that usually require monopoly conditions. This is achievable and will require R&D.

These and other features make the blockchain ecosystem an exciting avenue to implement the concept of Smart Markets.