Internet of Things (IoT) Meaning

A network of physical objects-"things"-that are embedded with sensors, software, and other technologies to connect and exchange data with other devices and systems over the internet. This includes everything from smart fridges and thermostats to industrial "connected" machinery.

The challenge for IoT is "micro-payments" and security. If a smart car needs to pay a toll or a smart meter needs to pay for electricity, it needs a way to send tiny amounts of value automatically without high transaction fees.

Traditional banking is too slow and expensive for these "machine-to-machine" (M2M) transactions. Decentralized ledgers are often seen as the perfect "layer" for IoT.

By giving every device its own digital wallet, they can trade data and value with each other autonomously. This allows for a "sharing economy" for machines, where your solar panel can sell excess energy directly to your neighbor’s battery without a central utility company.