ASX-listed IOT Group partnered with Hunter Energy through a binding agreement to develop a Blockchain Application Center adjacent to a power station. The Initiative is to explore and gain exposure to the rapidly growing area of the Internet of Things (IoT).
Blockchain Application Center Initiative
Hunter Energy is currently working to recommission a Redbank power plant near Singleton, Australia with the aim to start in the first quarter of 2019. If it goes according to plan, the IOT Group can receive wholesale rates for power, without having to pay for grid costs, poles, and wires.
The project can, therefore, cut significant operational costs for international blockchain activity. Hunter Energy and IOT Group are announcing more information about the project over the next 90 days.
By reducing the costs of any blockchain-based activity, the IOT group can operate its blockchain business using more cost-effective means. According to SmallCap, Hunter Energy will grant the IOT group the right to construct its Blockchain Application Centre (BAC) in the proposed site in consideration for ten percent of the net profits of the IOT BAC.
“This will be a first in Australia and has good prospects of attracting interest from Australian and international blockchain operations looking to locate where they have surety of sovereignty and the benefits of low cost power,” said Sean Neylon, IOT Group executive director, and founder.
Additionally, the IOT Group mentioned that it also has plans to build a new data center at the site. The company is in the process of negotiation with a “major data complex builder/developer” to make the center’s construction a reality.
To be specific, Hunter Energy will provide the power for blockchain-based operations, and IOT will provide its blockchain-powered services to users. However, the deal is currently incomplete, and there are many points of consideration to be agreed by both parties.
Nevertheless, the public responded positively to the news. Following the announcement, IOT Group’s shares rose by 20 percent and traded at $0.06 in early morning trade on the ASX.
Blockchain Technology with the Internet of Things
IOT Group is thinking about integrating both blockchain and the Internet of Things into its strategic vision for the future. According to Neylon, the “IOT Group needs to follow the [IOT] trends and develop IOT businesses and opportunities to benefit IOT Group shareholders.”
Furthermore, the company believes it has a competitive advantage regarding operational costs for blockchain-based activities. “To make crypto mining work you need cheap power and IOT will change that. IOT has created the biggest and only opportunity for global crypto miners to come to Australia,” said a spokesperson from the company.
It is, however, uncertain whether the combination of these technological trends will pan out in the future since they are still in early stages. Whether the approach is feasible or not, however, remains highly questionable.