Simran Kaur Arora | 31 Mar, 2023

What is IoT? Definition and How does it work?

IoT is influencing our lifestyle from the way we react to the way we behave. From air conditioners that can be controlled by smartphones to smart cars providing the shortest route or the smartwatch that tracks our daily activity.

What is IoT?

IoT is a giant network with connected devices. The devices gather and share data about how they are used and the environment in which they are operated. Sensors are embedded in every physical device. It can be a mobile phone, electric appliances, vehicles, barcode sensors, traffic lights, and more.

These sensors continue to emit data about the working state of the device. How do they share this vast amount of data? IoT provides a common platform for devices to dump their data and a common language for all the devices to communicate with each other. Data is emitted from various sensors and sent to the IoT platform securely. IoT platform integrates the collected data from various sources. Further, analytics is performed on the data, and valuable information is extracted as per requirement. Finally, the result is shared with other devices for better user experience automation.

How Does It Work?

Sophisticated sensors and chips are embedded inside the physical devices that surround us, each transmitting valuable data that let us better understand how these things work together. Here, the question arises that how do we put the information to

How IoT Works

Work? The answer is a universal IoT platform that brings us diverse information together and provides a common language for the devices and apps to communicate with each other. The process starts with devices that safely communicate with an IoT platform, integrates the data from many devices, and apply analytics to share the most valuable data with applications that address industry-specific needs.

How is IoT Changing the World?

IoT is reinventing every industry by its ability to enable device-to-device communication; it provides automated support and communication between devices.

  1. No more traffic jams: Sensors in the car connect with the environment, the information is processed, and a message is sent back to the car, letting drivers and people know which way to go to avoid traffic.
  2. Saving Lives: Doctors have better access to more information, allowing for better and faster diagnosis and few errors.
  3. Smart Cities: Sensors are placed all over the city, and because of IoT technology; thus, there is more space and better maintenance.
  4. Greener Homes: Homes nowadays are equipped with automated devices that are intelligent enough to make decisions and maintain themselves, such as:
    • The thermostat knows when to increase or decrease temperature.
    • The water needed is by the house is easily maintained.
    • Optimal lighting is also maintained by the system.
    • The appliances that are not in power are shut down automatically, thus saving energy and money.
  5. Pay with your Clothes: Clothes are made with conductive threads and are embedded with a microchip tied to your identity. It allows you to get offers, pay, know when to recycle, unlock your phone, get recommendations, and more.

Why is IoT Important?

In recent years, IoT has become one of the most critical technologies of this century. We can now connect everyday objects such as kitchen appliances, cars, thermostats, baby monitors to the internet via devices embedded with sensors, seamless communication is possible between people, processes, and things.

The internet of things technology helps people live and work smarter as well as gain complete control over their lives, using low-cost computing, the cloud, big data, analytics, and mobile technologies, things collect and share data with minimum human intervention. In this hyperconnected world, Digital systems record, monitor, and adjust each interaction between connected things, thus the physical world the digital world and they cooperate.

Also, IoT provides businesses with a real-time look into how their companies' systems work, delivering insights into the performance of machines to supply chain and logistics.

IoT reduces labor costs by enabling companies to automate processes. It improves service delivery, thus making it cheap to manufacture and deliver goods as well as offering transparency into customer transactions.

IoT is becoming popular in several industries, including finance, healthcare, retail, manufacturing, and more.

IoT is one of the essential technologies of our lives and would continue to pick up as more organizations realize the potential of connected devices to keep them competitive.

What Technologies Have Made IoT Possible?

Following technologies have played a crucial role in implementing the IoT practically:

1. Cloud Computing

A massive amount of data is gathered from the device's sensors. Therefore, some considerable space is needed to not only process but also store this data, and this is where Cloud computing plays its role. Cloud computing allows the potential to quickly and faultlessly process a significant amount of data. Identity management platforms are one such example that uses the IoT solution to offer data security. The advantage of using the cloud is that it is more scalable and efficient.

2. Sensors

Sensors are considered as the main component of IoT as they collect and gather the data from the devices and then broadcast it to the IoT cloud platform to process the data. Sensors allow inter-device interaction as they use lithography procedures similar to how microprocessors work. Thus low cost and reliable sensors are making IoT technology possible for more manufacturers.

3. IPv6

IPv6 is the advanced version of the primary communication capable of identifying and locating computers and devices on the internet. It improves performance, provides a more efficient packet handling, and improves security.

There are three factors why IPv6 is relevant?

  1. Security: Provides end-to-end encryption and supports a more secure name resolution.
  2. Scalability
  3. Connectivity

4. Machine Learning and Analytics

With machine learning being the technology of the century, businesses can gather insights faster and more efficiently by accessing vast amounts of data stored in the cloud. The emergence of these allied technologies continues to push the boundaries of IoT, and the data produced by IoT also feed these technologies.

5. Conversational Artificial Intelligence

Neural networks have implemented natural-language processing (NLP) to IoT devices such as digital personal assistants Alexa, Cortana, and Siri and made the devices appealing, affordable, and viable for home use.

Complete Guide to Build IOT Things from Scratch to Market

What Kind of Industries Benefit from IoT?

1. Industry IoT (IIoT)

The application of IoT technology in the industry refers to as Industrial IoT(IIoT). The technology makes use of instrumentation and control of sensor devices that engage in cloud technologies. Industries nowadays use M2M (machine-to-machine communication) to achieve wireless control and automation. But with the emergence of cloud technologies, industries can achieve a new automation layer, thus creating business models. IIoT is referred to as the fourth wave of the industrial revolution, or Industry 4.0.

Below are some common uses for IIoT:

  • Smart cities
  • Connected and smart logistics
  • Smart digital supply chains
  • Smart manufacturing
  • Preventive and predictive maintenance
  • Smart power grids

The following industries make use of IoT technology:

1. Manufacturing

Manufacturers get an advantage by using production-line monitoring to enable proactive maintenance on equipment in the case of sensors detect an impending failure. Sensors are capable of measuring when production output is compromised. Thus manufacturers can quickly check equipment for the accuracy or remove it from production until repaired with the help of sensor alerts. It allows companies to reduce operating costs, get better uptime, and improve asset performance management.

2. Automotive

IoT offers a significant advantage in the automotive industry, by applying for its benefits from the production lines, sensors can detect equipment failure if any in the vehicles on the road and alert the driver with details and recommendation. Automotive suppliers and manufacturers learn about keeping the vehicles moving and owners informed by aggregated information data gathered by IoT.

3. Transportation and Logistics

Logistical and transportation systems make use of IoT applications. Fleets of lorries, cars, ships, and trains carrying inventory are rerouted based on factors like weather, traffic, vehicle availability, driver availability, and more because of IoT sensor data. The goods or the inventory could be equipped with sensors and could also be checked for temperature monitoring and tracking.

Temperature monitoring goods industries like food and beverages, pharmaceuticals, and more make use of IoT sensors to timely monitor the temperature of their goods and send alerts when the temperature rises or falls to the level that could be a threat to the product.

4. Healthcare

IoT technology offers enormous benefits to the healthcare industry. Patience assistance assets such as wheelchairs could be found easily with the help of IoT sensors. Similarly, many other hospital assets could be tracked, ensuring proper patient care.

Pros and Cons of Internet of Things(IoT)

Pros of IoT

Some of the advantages of IoT include:

  • Ability to access information at any time on any device from anywhere.
  • Improved communication between connected electronic devices
  • Transferring data packets over a connected network saving money and time
  • Automating tasks improves the quality of business services, thereby reducing human intervention.

Cons of IoT

Mentioned below are some disadvantages of IoT include:

  • The chances that a hacker could steal confidential information increases as the number of devices sharing the information increases.
  • Organizations may deal with massive numbers of IoT devices, and collecting and managing the data from all those devices can be challenging.
  • Every connected device becomes corrupted if there is a bug found in the system.
  • Devices from different manufacturers find it challenging to communicate with each other since there's no international standard of compatibility for IoT.

Applications of IoT

1. Smart Home

Smart homes are considered an essential part of the IoT application that is both essential and efficient. About 60,000 people every month search for smart homes. Databases of smart homes for IoT analytics include 256 companies and startups aiming to provide its customers with the best living experience. Prominent startup company names like AlertMe or Nest, as well as several multinational corporations, like Philips, Haier, or Belkin, are some of the organizations that provide smart home solutions.

2. Wearables

The release of the latest Apple smartwatch is eagerly awaited every year by its loyal consumers across the globe. Wearable devices that make our life easy are theLookSee bracelet, the Sony Smart B Trainer, the Myo gesture control, and more.

3. Smart City

Smart cities prove to be a significant innovation covering a wide variety of applications, like water distribution and traffic management, waste management, environmental monitoring, and more. The reason it is becoming popular is that it attempts to minimize the discomfort and problems of people who live in cities. IoT solutions in the smart city sector solve various metro-related issues like traffic, air and noise pollution, and making cities safer.

4. Smart Grids

Smart grids extract information based on the behavior of electricity suppliers and consumers in an automated way to improve the efficiency, economics, and reliability of electricity distribution.

5. Industrial Internet

Industries like power generation, oil, gas, and healthcare connect their machines and devices using IoT. System breakages and faults and unplanned downtime resulting in life-threatening situations are avoided with the help of IoT. Devices like fitness bands for heart monitoring or smart home appliances are embedded with IoT sensors and provide ease of use but are not reliable because they do not typically create emergencies if the downtime was to occur.

6. Connected Car

Connected car technology is an extensive and complicated network of several antennas, sensors, embedded software, and technologies that are assisting in communication to navigate in a complex world. These requirements become critical when humans give up control of the steering wheel and brakes to the autonomous vehicles that are tested on our highways right now. Therefore, the manufacturing of these vehicles should be efficient, accurate, and reliable.

For More Applications, You can visit here.

Future Scope

Internet of Things connected devices is embedded with sensors in various systems to the internet. When a device can be controlled from anywhere when they represent themselves digitally, the connectivity captures data from more places, which ensures ways of improving safety, increasing efficiency, and IoT security.

IoT technology helps companies improve their performance with IoT analytics and IoT Security to deliver productive outputs. Industries in the utilities, oil & gas, insurance, manufacturing, transportation, infrastructure, and retail sectors benefit from IoT by making informed decisions, aided by the torrent of interactional and transactional data at their disposal.

There are no shortages of IoT market estimations. For instance, a few include:

  • Annual IoT revenue of hardware and software is expected to exceed $450 billion by 2020 for Bain & Company
  • IoT would have an $11.1 trillion impact by 2025, estimates McKinsey & Company
  • The number of connected IoT devices is predicted to increase by12% annually to reach 125 billion in 2030.
  • Gartner assesses that 20.8 billion connected things would be in use by 2020, with total spend on IoT devices and services to reach $3.7 trillion in 2018.


As we know IoT technology has already made itself comfortable in our homes, public spaces, offices and factories, and with such a pace of development, the day is not far when the IoT phrase 'anything that can be connected would be connected' would be pretty closer to becoming a reality.

Therefore, the real question should be how the connections must be made to achieve the highest possible efficiency while retaining critical features like security and cost-effectiveness rather than be about when this would happen. Deployment of such devices requires a significant number of low-bandwidth, low-power devices. That would further require the use of LwM2M, a lightweight protocol designed especially for the management of such resource-constrained machines. Therefore, seen from such a practical perspective, the question of success in the case IoT applications boils down to the choice of appropriate IoT technology from the vast array of existing solutions.

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By Simran Kaur Arora

Simran works at Hackr as a technical writer. The graduate in MS Computer Science from the well known CS hub, aka Silicon Valley, is also an editor of the website. She enjoys writing about any tech topic, including programming, algorithms, cloud, data science, and AI. Traveling, sketching, and gardening are the hobbies that interest her.

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