Page 256 - Artificial Intelligence for the Internet of Everything
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234   Artificial Intelligence for the Internet of Everything


          the rapidly growing IoT environment that Gartner has predicted to include
          26 billion devices by 2020 (Gartner, 2013).
             In 2014, Levine stated (Levine, 2014):

             Simple and easy to write contracts appear to be sufficient for many entirely digital
             transactions. But as these systems start to interact with the physical world, there is
             likely to be a need for greater intelligence and real-world knowledge in making
             decisions. AI systems will be needed to translate information from a wide variety
             of sensors into precise terms that smart contracts can act upon. In the other direc-
             tion, contracts that lead to physical actions (such as delivery of items) will need to
             interface with human and robotic agents. For example, owner and operators of
             critical energy infrastructure might want insurance contracts against cyber-attacks
             and harmful weather conditions and a smart contract would need to determine
             when the payout event is triggered.
          The aforementioned grid optimization, automation, and resilience improve-
          ments are essential operation and design criteria needed to modernize our
          powergrid.However,cybersecurityisoftenanafterthoughtbecausevendors
          and end-users prioritize functionality and cost, leaving the power grid—the
          backbone of our economy—potentially vulnerable to a cyber-attack. This
          vulnerability is especially true at the grid’s edge, which continues to increase
          the size and speed of data being collected and exchanged in absence of clear
          cyber security and IoT standards and regulations. Thus, the grid lacksthe nec-
          essary defenses to prevent the disruption and manipulation of DERs, grid-
          edge devices, and the associated electricity infrastructure. Moreover, as the
          smart grid increases its connectivity and communication with buildings,
          cybervulnerabilitieswillextendbehindthemeterintosmartbuildings,which
          also have a host of documented cyber-security vulnerabilities.
             Blockchain technology can also be applied to the smart grid to help
          reduce costs by cutting out third parties and increasing the arbitrage oppor-
          tunity for individuals to produce and sell energy to each other. Smart con-
          tracts facilitate peer-to-peer energy exchanges by enabling energy
          consumers and procurers to sell to each other, instead of transacting through
          a multitiered system in which distribution and transmission system opera-
          tors, power producers, and suppliers transact on various levels (Mylrea &
          Gourisetti, 2017). In April 2016 one of the first use cases was
          demonstrated—energy generated in a decentralized fashion was sold directly
          between neighbors in New York via a blockchain system. This use case
          demonstrated that energy producers and energy consumers could execute
          energy supply contracts without involving a third-party intermediary,
          thereby effectively increasing the speed and reducing the costs of the trans-
          action (PWC, 2017).
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