• Security , Privacy and Scalability of DLT systems : DLTs provide decentralized financial market infrastructures for tokenizing , trading and settling asset transactions . The security of assets and transactions is paramount and should be carefully implemented [ 5 ]. Applications with privacy concerns should apply certain privacy-enhancing technologies such as homomorphic encryption 1 ( HE ), zero-knowledge proof 2 ( ZKP ), secure multi-party computation 3 ( MPC ), and confidential computing 4 ( CC ). Moreover , the scalability of DLTs should be properly addressed to accommodate the large volume of transactions from IoT devices .
2.3.2 BUSINESS PERSPECTIVE
The machine economy represents the new paradigm shift in IoT-related businesses . The more the IoT stack has a predominant position in the business model , the more significant the disruption can be . To embrace the machine economy successfully and build a reliable and sustainable position in the future , business owners should consider the following factors :
• Fairness and transparency of business models : The fair and transparent distribution of business values among all the value chain stakeholders is the key to building a thriving machine economy . It should be able to align the stakeholders ’ benefits , and encourage participation in the ecosystem to create the flywheel effect .
• Effectiveness of customer engagement strategies : An effective customer engagement strategy is important to increase customer stickiness and loyalty . Emerging Web3 technologies such as Decentralized Finance 5 ( DeFi ), Non-Fungible Tokens 6 ( NFTs ), and Decentralized Autonomous Organizations 7 ( DAOs ) provide a set of tools for building innovative and robust customer engagement strategies in the machine economy . While DeFi could be leveraged to increase inclusivity in global supply chains [ 6 ], NFTs , for example , have become popular choices by brands for enhancing their customer relations programs [ 7 ] but also as a new way to address IP protection issues when data are flowing between multiple stakeholders . DAOs , on the other hand , aim to offer customers an opportunity to participate in the decision process of certain brand-building activities [ 8 ].
• Robustness of token economy models : A robust token economy model is critical for incentivizing all the stakeholders in a machine economy ecosystem to continue participating business activities , thereby ensuring the long-term sustainability and steady growth of IoT businesses .
January 2023