Saving Money at the Cost of Privacy

The Concept of IoT


Ramil Jiwani

3 years ago | 7 min read

Imagine, only a decade ago we would have to get up to adjust the thermostat or would have to get up to turn the lights off. Yet now, with a few taps on our phones, or with the simple words “Hey Alexa!” we can do everything without moving an inch.

This is all done through the Internet of Things (IoT). IoT is being used commercially in major corporations and by the average person. This emerging technology is already larger than we know and it is only going to keep growing.

Smart home devices such as Google Assistant and Amazon Alexa are some obvious examples but did you know that many companies use advanced IoT systems to control lighting and heating automatically to reduce costs? No one needs to tell someone or something manually, it is automatically done based on data.

And that is what will drive IoT to grow at an incredible rate. The abundance of data that we as a civilization produce every day, will only continue to grow alongside IoT. As more IoT devices are put on the market, the capacity for further data collection also grows. They fuel each other to become bigger and bigger.

IoT has the capability to make our world faster, cheaper and better. Their essential features/capabilities are on the level of connectivity and network management, device management, data acquisition, processing analysis and visualization, application enablement, integration and storage. But where did the idea of IoT come from?

The Concept of IoT

The concept of adding sensors or ‘intelligence’ to everyday objects was conceived in the 1980s and 1990s. There were some early developments including an interconnected vending machine.

Yet progress in this new field was very slow. Why? The technology wasn’t ready yet. Computer chips and processing systems were too bulky to be effective and there was no efficient communication method. Smart devices needed chips that were cheap, power-frugal and small for a web of interconnected devices to be created.

The increase in the availability of broadband internet and cellular and wireless networking along with the implementation of RFID chips (low-power chips that can communicate wirelessly) solved some previous issues.

This coupled with the adoption of IPv6 (allowing humans to access enough IP addresses for every device this planet will ever see) allowed for IoT to take major steps in evolving from a previously disregarded idea into a reality.

The first IoT devices were fairly simple. Sensors were used to track the location of expensive equipment. IoT was fairly expensive at that time but since then, we have seen a rapid decline in the cost of sensors. Experts predict that in the near future, we have the possibility to have tracking systems implemented into anything for as little as 10 cents.

This rapidly decreasing cost is making IoT more and more accessible to the general public which will only further the expansion of this technology.

There are already more IoT devices than the number of people in this world. Experts are predicting that by 2025, there will be 41.6 billion connected IoT devices. This is an incredible rate of growth and this will translate into an incredible amount of data.

Photo by Living Smarter on Unsplash

How does IoT work

You may be wondering how IoT devices use data. To answer that, we need to do a quick rundown on how IoT devices work.

An IoT system consists of many sensors and devices which “talk” or relay data to the cloud through some kind of connectivity such as wifi.

Once the data gets to the cloud, software processes it and decisions are made based on that data, such as sending an alert or automatically adjusting the sensors/devices without the need for the user.

In some cases, machine learning models are used to influence the decisions made to make the user experience better. One example of this is collecting data points on when a user turns the lights off to a certain room.

This data can be used to automatically turn lights off without the user interacting with the system. These machine learning models learn and improve by training themselves on past data points. And this is why our data is so important to IoT companies and companies in general.

By collecting more and more data, companies can improve their models to improve their product and ultimately make their product more efficient hence earning them more money and helping us save money.

How IoT helps save us money

One of the biggest selling points of IoT is the fact that you can save money by buying these devices. How does it help? Well, let’s look at some examples.

Building and facility systems — IoT technology uses sensors and various devices to monitor factors such as air temperature and quality, energy usage and water consumption. This monitoring allows homeowners, building owners, and facility managers to build a system that can automate processes to adjust building temperatures based on the weather, turn off lights in rooms that aren’t being used, and to turn off water heaters when demand for hot water is low. This isn’t something that will happen in the future. It’s happening right now! An apartment complex in Sweden is using IoT technology to monitor hot water usage by each tenant and then billing them according to how much hot water they use instead of splitting the cost amongst all the renters. The result is a projected $42 million savings across 10 years. The cost to install these systems is a fraction of what they can save you in the long run.

Industrial inventory management — IoT technology can help businesses track inventory throughout multiple locations anywhere in the world by utilizing inventory sensors. As a result, they always know exactly how many inventory items they have and where they are, leading to greater efficiencies that save money in inventory management. An example of this can be in a restaurant. Restaurants can use IoT systems to track how much of each ingredient they have available. With this information, restaurants can promote certain orders to encourage customers to order something that has a greater stock.

Photo by BENCE BOROS on Unsplash

Smart homes and home automation — Using smart appliances allows you to conserve energy as they run because they save money and produce less waste. Many smart devices can also be programmed to function at times when energy is less expensive. These include smart lights, smart thermostats and smart plugs and switches. All these devices can help you save energy and money. By using these devices, not only are you doing yourself a favour, but you’re helping the environment.

This is all great. But unfortunately, as I wrote previously, efficient systems that will help you save money come at the cost of your privacy.

Is saving money worth our privacy

You might be thinking, it’s not that bad if our data is being used to improve our experience. You may also think that the companies will keep your data private and it will not be sold. In some cases this is true. But in many, it is not.

We’ve all seen Facebook in the news because of their many scandals related to their privacy policies and sharing of data. Google uses data such as your location and search history, to determine which ads to show you. Amazon says that Alexa only records when it is activated but there have been numerous reports of private information being sent to an unintended audience by Alexa even when it was not activated. This has lead to many lawsuits some of which being that Alexa records a child’s voice without consent from parents. This is similar to Google Home and Apple’s Siri.

But it’s not only large companies that can collect your data. Hackers can easily hack into many different smart systems. There have been many accounts of hackers hacking into smart cameras and spying on people. There was also one incident where a camera with a mic and speaker allowed the hacker to speak directly with a family.

Ken Munro did a Ted Talk in which he discussed how insecure Internet of Things products are and how easy it is to hack them.

He works for a security firm that tests IoT devices and consults with firms on how to make them stronger. In his talk, he mentions he was able to hack into a smart kettle.

Why is that important? It’s important because once he hacked into the kettle, he was able to gain access to the wifi password thus gaining access to someone’s wifi. Now with this access, he can control all other IoT devices connected to that network such as security cameras. And you can see why that might be an issue.

Over the years, IoT will get safer and harder to hack into. This technology is still new and many companies are still in the research phase. In the next few years, we will see breakthroughs in this field that will make our data more secure and ethical regulations will be established to protect consumers from companies misusing data. But for now, the world is not ready for a fully automated world.


Wrapping all of this up, IoT has the potential to make our lives more efficient while also saving money. And because of this, we will be able to spend more time with our families and doing things we love.

With this technology, we as a species will be able to start a new era in which we are able to maximize our efficiency and live our lives to our fullest potential. And while IoT has a long way to go in terms of security and privacy, once it is ready, it will revolutionize the world.


Created by

Ramil Jiwani







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