Ethyl - The Future of the Internet of Things


The future of the internet of things.

For the investor with little time on their hands, shortened versions of each section are marked as “In Short”. Ethyl puts you, as a nember, first.

We would also like to provide translations of this document. If you are able to translate (for a few XEMs), please contact us in our telegram chat.

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The Problem

The internet of things is too centralized. Every single device from a manufacturer is often connected to a single point of failure. At some point, the manufacturer may want to stop supporting perfectly working devices due to their age. A single service outage can leave homes without light, even though electricity is still flowing. Or even worse, these servers get hacked (not infeasible and happens often).

At the same time, the internet of things is too decentralized. Buying devices from multiple manufacturers is nearly impossible. Every single new protocol involves a brand new hub to be placed somewhere in the home, an additional point of failure.

In short: The internet of things is an extremely important societal change being done in an extremely risky / “move fast and break things” way.

Luckily, this can be solved without replacing every IoT device that already exists today.

The Solution

Ethyl decentralizes the internet of things using the NEM blockchain. Every building or household installs a single hub that also acts as a decentralized server. As long as electricity is flowing in the home or building, the IoT devices will keep working without relying on internet access or centralized servers. (Except, of course, when chain functionality is required to communicate with or read data from other devices.)

Ethyl supports offerings from a wide variety of vendors. It supports open standards such as Z-Wave, ZigBee, and general RF, as well as IP-based APIs for existing smart home devices.

Note that even though Ethyl is primarily based on the blockchain, most communication happens off chain to eliminate fees during day to day use.

In short: Ethyl safely and securely moves the internet of things onto the NEM Blockchain.


Of course, most people see blockchain as a way to make money, unaware of its actual use cases. As such, marketing Ethyl as a blockchain platform is likely not a good idea.

Instead, Ethyl gives privacy and security to users of the internet of things. Many companies have shown time and time again that they are willing sell or abuse data. By using a blockchain as an encrypted datastore and local networking for the majority of communication (only using “dumb” servers where necessary to circumvent firewalls and NAT, and blockchain for trustless transactions) - the internet of things becomes much less of a privacy issue.

In the United States, 93% of adults say that being in control of who can get information about them is important; 74% feel this is “very important,” while 19% say it is “somewhat important.” (Pew Research)

Only 2% of adults say that they are “very confident” in companies like Google keeping their data secure. (Pew Research)

And not only that, but people are very touchy when it comes to their homes.

People in the US care more about a smart thermostat sharing information than being tracked using facial recognition at work.

The story is similar elsewhere, with 89% of Europeans wanting to keep their calls, messages, and more secure and encrypted.

In Short: Most people care about privacy, almost no major IoT company is willing to give it to them. Ethyl is.

Why not use IOTA?

  1. Use of Ternary Number System: Computers use something called the binary number system (as in, 10100010). IOTA uses the ternary number system (202001002). As such, every single time you want to do something on IOTA - an IOT device must convert back and forth between binary and ternary (this slows everything down).
  2. They Use PoW: Right, but they require proof of work to be done on IoT devices (yes, small, underpowered IoT devices) instead. Ethyl has no fees for daily use AND no proof of work, period.
  3. Custom Crypto: The number one thing any good cryptographer will tell you is not to “roll your own cryptography”. Due to the use of the ternary number system, IOTA has had to build its own new, potentially insecure cryptography.
  4. Poisoned Open Source: The source code of IOTA had vulnerabilities on purpose in order to kill copycat projects. In this clear act of hostile intent against the community, it is clear that IOTA is not something that can be recommended to anyone as a good project.

In Short: Inefficient, flawed, potentially insecure, developers have proven themselves to be malicious.


In Short:

  1. Make it easy for programmers to use.
  2. Make it easy for non-programmer, but still tech minded people to use.
  3. Make it easy to the level of setting up a new game console or a new PC.

Milestone One “Foundations” (Q1 2018) 150k XEM

  • Release Project Structure / Technical Reference
  • Release Apostille Tool
  • Develop Core Libraries
  • Develop Amazon Echo Compatibility
  • Develop MQTT Compatibility
  • Develop Z-Wave Compatibility
  • Test Compatibility
  • Release Protocol Documentation

In Short: The goal of milestone one is to create a stable base set of documentation and code that works with existing IoT devices. The end product (to show off) of milestone one is a cli app for the protocol that programmers will be able to configure.

Milestone Two “Rough Cut” (Q2-3 2018) 135k XEM

  • Release Raspberry Pi OS
  • Release RPi 315/433Mhz Support
  • Release RPi Z-Wave
  • Release RPi ZigBee
  • HomeAssistant Middleware
  • Implement all features from core.
  • Create, sell part kit for technical people.
  • Make setup reasonably simple.
    • (Flash SD Card, Plug it In, Config File Edits)
  • Potential support for other boards, time permitting.
  • Develop and Test Barebones Android + iOS support.

In Short: The goal of milestone two is to create a product that semi-tech oriented people will be able to install and play with. The end product is a $50-75 part list that someone can put together in a day to have a cheap, working home automation system on the NEM blockchain.

Milestone Three “Final Cut” (Q4 2018) 140k XEM

  • Create and refine the UI.
  • OpenHAB Middleware
  • Make setup easy.
    • (Plug in Card, Plug into Wall, GUI Config Tools)
  • Everything at this point is a GUI tool with sane defaults.
  • Full Android + iOS support.

In Short: The goal of the third milestone is to create the “real deal”. Anyone with the technical capability of setting up a game console or new PC should be able to get going with blockchain IoT.

Purpose for Funding

  • Salary (All team members have other income sources, and we have agreed to not sell for a reasonable timeframe.)
  • We are connecting the devices to the chain for free! This requires some XEM to pour back into the chain as fees. (This benefits harvesters, as well as all users of the NEM ecosystem due to increased activity.) We hope to do this for as long as possible.
  • Namespace/Mosaic related cost - with the release of catapult, some new features will have the best user experience when combined with namespaces and mosaics. Instead of directly using XEM, these mosaics can represent energy credits on a local grid or similar.
  • Website/Software/Hosting/etc costs, will not exceed $500/month.
  • Hardware Costs, if possible hardware can be purchased with XEM due to an agreement with the manager of a local (to our office) computer store. Ensuring compatibility with leading IoT products is a top priority for us, which requires the purchase of IoT devices to test with.

In effect, a large portion of the funding goes back to harvesters in the form of blockchain fees. Another large (but not as large) portion of funds stays within the network. What does need to be (unfortunately) sold for fiat to cover business expenses is strictly limited.

Future (Q1 2019+)

  • Past the milestones, Ethyl is prepared to put up a kickstarter-like page to sell ready to go IoT kits.
  • Partnerships with leading IoT brands for a secure ecosystem of smart things (all powered by the NEM blockchain).

How does this help NEM?

Although it has been touched on a little bit earlier, this is an easy to reference section describing how this project will help the NEM Ecosystem.

  1. Open Source Apps/Protocols: Anyone will be able to look at the code and build noncommercial implementations using it.
  2. NEM Marketing: We are built on NEM, the best blockchain platform, and we’re proud of it.
  3. Higher Transaction Volume: Less empty blocks, more transactions in the network.
  4. Partnerships: Ethyl encourages large IoT vendors, governments, homebuilders, and more to use our platform and further fuel the NEM Ecosystem.
  5. Case Study: We’re building a blockchain IoT platform without smart contracts? People who have only heard of Ethereum will begin to understand the superiority of the NEM blockchain.


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  1. Updated milestones to reflect community feedback. Thank you!

I fully support this project!
You can count on my vote! :+1:

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Me too!

Overall very reasonable. You’ll get my vote. :wink:

BTW have you had a look at KNX ( and how you maybe could incorporate that as well?

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This is awesome and they not asking much! Will definately vote yes.

How much capability and capacity does the NEM chain have for this type of activity?

A fully working and globally distributed IoT would probably want to be doing millions or billions of transactions per second.

Day to day use happens off chain using the encryption keys of the chain. As such, we can remain secure while only using the blockchain occasionally. Not much throughput is needed, but it’s nice to have.

Basic technical overview, more of it will be released later…

So Apostille > HD Account > IoT Device gets key of HD Account
HD Account is “owned” on chain by your personal account
Device accepts controls that are signed by your private key.

There are some catapult-only features we’re using for other things such as…

  • Real time negotiation and sale of resources (i.e. solar panels > electricity, in the format of grid credits).
  • Company pays fees instead of storing the initial registration cost on device.
  • Communication with businesses (e.x. your smart lawn sprinklers break, things happen on chain, someone comes to fix them after your approval.

The catapult features are expected to utilize the chain more, but they also provide cost savings so there isn’t a problem in paying the 10 cent fee once in a while.


Just from a quick first look, I think we should be able to support that too. They use all the protocols we plan on supporting - it’s just a matter of software.

That said we haven’t looked at it too much, so that may change later. ^

I am in

Thx. KNX has huge user base with all sorts of smart home automation and has been around since ages. :sunglasses:

Interesting! I was initially confused as it seemed a poor fit for the NEM network with its current fee structure, given the quantity of transactions typically involved with many IOT devices, but your follow-up posts helped me understand. It’s surely got to be difficult competing with free transactions a la Iota etc., but it looks like you’ve plenty up your sleeve to counter that (it seems Ethyl might involve some kind of Catapult-based sidechain, or something similar?).

Will you be adding new team members for Ethyl? Or is this a fairly central/core effort?

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Keep in mind that this is a community funding proposal, meaning the core team will not be working on this. We are a separate team from the core team with quite a bit of experience building applications on the NEM Blockchain.

Some other projects I’ve worked on can be found on the NEM Blog.


Nikhil / Reverse Cold: This could be an exciting project of an ioT use case at least.

In reading the goal, could you explain how one will benefit going on chain (private or public) in the end?

The last step reads: “In Short: The goal of the third milestone is to create the “real deal”. Anyone with the technical capability of setting up a game console or new PC should be able to get going with blockchain IoT.”

If I am intensively focus on solving the original business issue you have stated of not wanting to share my home data, how will your proposal help? Simple example, if I have an quasi ioT security camera that tracks videos at the perimeter of my home, will your project be able to secure my videos captured (or make it simpler just date, time and duration data, not videos) without using a third party cloud base vendor? How does this project help replace the third party cloud base vendor that I use now? I don’t mind paying to store the data on the chain but can I retrieve the data when I need to? Who owns my video or data? Thanks.

I support it too !

“Potential support for other boards, time permitting.”

Agree with @sheld0r you should definitely look to integrate with KNX

I have tinkered with Home Automation for a number of years and it is a great use case for IoT. I will support this project but have a few questions / points:

  1. Would you consider a change of project name “Ethyl” sounds like it is based on Ethereum. I’d prefer it to be either linked to NEM or generic
  2. Please consider integration with OpenHAB, this open-source project has a very large following and because of the add-in nature already hundreds of connections and integrations to other protocols or manufacturer hardware -
  3. Please consider supporting MQTT (pronounced Mosquito) a lightweight machine to machine messaging protocol used by a number of applications for interconnectivity and again open-source -
  4. As previously mention by @sheldor support KNX




Videos are one thing we aren’t supporting yet, because they require a quite a bit of storage space. The security camera market is also very fragmented it, making it difficult to support.

Someone could implement NEMid for authorization into camera feeds or a hard drive, but as of right now that is not planned for this project.

  1. Yes, definitely considering it.
  2. There are plans to support HomeAssistant plugins. OpenHAB is Java which is not part of our tech stack and would be hard to directly implement. That said, we could look into interfacing with an existing instance on the same machine.
  3. MQTT is supported, see the original thread :slight_smile:
  4. KNX will also be supported.

I believe this is the same team that developed ioNEM? If yes, I am very happy to see this solid proposal to bring it to full commercial development. You have my support!

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