Berlin-based startup Moeco, a startup with plans to build a blockchain-based “internet of things” support network, today announced it has received $5 million in funding led by full-service blockchain provider Bitfury Group Ltd.

Moeco uses digital ledger technology, also known as a blockchain, to provide a solution to bridge different networks with decentralized, scalable communication. Blockchain technology works on a decentralized protocol that provides secure communication between distant entities. That’s ideal for internet of things because it involves many peers – some of whom work as hops or nodes between others – that must communicate privately.

“Moeco’s goal is to ‘uberize’ IoT connectivity by delivering data to the right place in a secure way and making sure the gateways are compensated fairly,” said Dmitry Gorilovskiy, Moeco’s founder and chief executive. “The peer-to-peer nature of the underlying blockchain technology will help us scale the system quickly and efficiently.”

The Moeco platform provides a way for disparate internet of things networks to communicate without the need for extra equipment. Smartphones and mobile devices can also act as part of ad hoc networks to extend that platform, which the company said will bring people on board by providing incentives to run on the protocol.

This can be done easily with a blockchain solution because the technology also provides a way to create and distribute currency. For example, the biggest blockchain in the world is the bitcoin blockchain, the basis of the cryptocurrency bitcoin.

Users who purchase a Moeco base station or install the software on their mobile devices to extend the network will receive tokens on the network as compensation. The tokens could then be used to operate the service, but users would conceivably be able to trade them in for money as well. With this incentive-based system, Moeco hopes to expand its network into spaces that otherwise would not have coverage, as it would follow the users wherever their devices go.

Many other blockchain-based currencies exist and companies that use blockchains often raise funds by selling tokens. Moeco also intends to raise funds with an initial coin offering, a type of token crowdsale, in the coming months.

Aside from receiving funding from Bitfury, Moeco plans to use Bitfury’s Exonum protocol to build and scale the internet of things network. Exonum is Bitfury’s enterprise-grade blockchain service designed as a framework for businesses and governments to rapidly bring such networks online. The service, launched in August, would become the underlying blockchain used by Moeco’s network and it is anchored on the bitcoin blockchain, the most robust and popular blockchain in the world.

“Moeco is a service platform that enables customers to deploy citywide IoT networks using blockchain technology, and the Bitfury Group provides a full range of blockchain services and solutions that can help them do just that,” said Valery Vavilov, CEO of Bitfury Group.

According to Statista, the internet of things global market is forecast to be valued at more than $1.7 trillion by 2019. The total number of connected devices is expected to reach 20.35 billion in the same year. In the same report, Statista noted that smart city hubs and internet of things solutions to address connectivity and urban problems remain the most important internet of things subsystems.

Aside from providing a decentralized platform for scaling internet of things communication, Moeco also builds toolkits for internet of things applications.

The first of two kits is the Moeco LR tooklit, designed for business and industrial applications using low-power wide-area networking. This equipment would be good for smart city applications, such as smart buildings and smart meters, or for a factory campus in order to coordinate equipment and supply lines. Supermarkets could also use this technology in order to track inventory, learn what’s in demand and keeps the shelves stocked.

The second kit, coming soon, is the Moeco BLE toolkit, a big-data solution designed to network smartphones and mobile devices with a beacon base station using a Bluetooth low-energy connection. The beacon provides a gateway into the network and the smartphones act to flow data into the network, from internet of things devices or themselves, which can be analyzed later.

Image: Moeco