T he Internet of Things (IoT) is a complex, often poorly understood phenomenon. The term is more than a decade old, but interest has grown considerably over the last few years as applications have increased. The impacts of the IoT on the economy and society more generally are expected by many to grow substantially. This report was developed to assist Congress in responding to some commonly asked questions about it: " What Is the Internet of Things (IoT)? " " How Does the IoT Work? " " What Impacts Will the IoT Have? " " What Is the Current Federal Role? " " What Issues Might Affect the Development and Implementation of the IoT? " " What Actions Has Congress Taken? " " Where Can I Find Additional Resources on This Topic? " When people talk about the Internet, they are usually referring to the electronic network that permits computers around the world to communicate with each other. What, then, is the IoT? There is no universally agreed-upon definition, but generally, the term is used to describe networks of objects that are not themselves computers but that have embedded components that connect to the Internet. "Things" may include, for example, smart meters, fitness trackers, personal vehicles, home appliances, medical devices, and even clothing used by individual consumers. They may also include embedded devices in roadways and in other components of infrastructure such as electric grids, manufacturing plants and other buildings, farms, and virtually any other object, element, or system for which remote communications, control, or data collection and processing might be useful. While fixed and mobile computing devices such as desktop computers, smartphones, and tablets are generally not considered to be IoT objects, smartphones in particular have features such as motion and position sensors that blur the distinctions. Some smartphone applications, for example, enable them to be used in fitness tracking and other health monitoring. In other words, the IoT potentially includes huge numbers and kinds of interconnected objects. In practice, IoT refers not to a simple or uniform network of objects but rather to a complex collection of objects and networks. Specific dimensions of the IoT may be referred to by terms such as smart grid, connected cities, and Industrial Internet. Other terms may also be used in the context of IoT to denote related concepts such as cyber-physical systems and the Internet of Everything. The IoT is often considered the next major stage in the evolution of cyberspace. The first electronic computers were developed in the 1940s, but 40 years passed before connecting computers through wired devices began to spread in the 1980s. The first decade of the 21 st century saw the next stage, marked by the rapid spread of smartphones and other mobile devices that use wireless communications, as well as social media, big-data analytics, and cloud computing. Building on those advances, connections between two or more machines (M2M) and between machines and people are expected by many observers to lead to huge growth in the IoT by 2020. The IoT is not separate from the Internet, but rather, a potentially huge extension and expansion of it. The "things" that form the basis of the IoT are objects. They could be virtually anything—streetlights, thermostats, electric meters, fitness trackers, factory equipment, automobiles, unmanned aircraft systems (UASs or drones), or even cows or sheep in a field. What makes an object part of the IoT is embedded or attached computer chips or similar components that give the object both a unique identifier and Internet connectivity. Objects with such components are often called "smart"—such as smart meters and smart cars. Internet connectivity allows a smart object to communicate with computers and with other smart objects. Connections of smart objects to the Internet can be wired, such as through Ethernet cables, or wireless, such as via a Wi-Fi or cellular network. To enable precise communications, each IoT object must be uniquely identifiable. That is accomplished through an Internet Protocol (IP) address, a number assigned to each Internet-connected device, whether a desktop computer, a mobile phone, a printer, or an IoT object. Those IP addresses ensure that the device or object sending or receiving information is correctly identified. What kinds of information do IoT objects communicate? The answer depends on the nature of the object, and it can be simple or complex. For example, a smart thermometer might have only one sensor, used to communicate ambient temperature to a remote weather-monitoring center. A wireless medical device might, in contrast, use various sensors to communicate a person's body temperature, pulse, blood pressure, and other variables to a medical service provider via a computer or mobile phone. Smart objects can also be involved in command networks. For example, industrial control systems can adjust manufacturing processes based on input from both other IoT objects and human operators. Network connectivity can permit such operations to be performed in "real time"—that is, almost instantaneously. Smart objects can form systems that communicate information and commands among themselves, usually in concert with computers they connect to. This kind of communication enables the use of smart systems in homes, vehicles, factories, and even entire cities. Smart systems allow for automated and remote control of many processes. A smart home can permit remote control of lighting, security, HVAC (heating, ventilating, and air conditioning), and appliances. In a smart city, an intelligent transportation system (ITS) may permit vehicles to communicate with other vehicles and roadways to determine the fastest route to a destination, avoiding traffic jams, and traffic signals can be adjusted based on congestion information received from cameras and other sensors. Buildings might automatically adjust electric usage, based on information sent from remote thermometers and other sensors. An Industrial Internet application can permit companies to monitor production systems and adjust processes, remotely control and synchronize machinery operations, track inventory and supply chains, and perform other tasks. IoT connections and communications can be created across a broad range of objects and networks and can transform previously independent processes into integrated systems. These integrated systems can potentially have substantial effects on homes and communities, factories and cities, and every sector of the economy, both domestically and globally. The IoT may significantly affect many aspects of the economy and society, although the full extent and nature of its eventual impacts remains uncertain. Many observers predict that the growth of the IoT will bring positive benefits through enhanced integration, efficiency, and productivity across many sectors of the U.S. and global economies. Among those commonly mentioned are agriculture, energy, health care, manufacturing, and transportation. Significant impacts may also be felt more broadly on economic growth, infrastructure and cities, and individual consumers. However, both policy and technical challenges, including security and privacy issues, might inhibit the growth and impact of IoT innovations. Several economic analyses have predicted that the IoT will contribute significantly to economic growth over the next decade, but the predictions vary substantially in magnitude. The current global IoT market has been valued at about $2 trillion, with estimates of its predicted value over the next 5 to 10 years varying from $4 trillion to $11 trillion. Such variability demonstrates the difficulty of making economic forecasts in the face of various uncertainties, including a lack of consensus among researchers about exactly what the IoT is and how it will develop. The IoT can be leveraged by the agriculture industry through precision agriculture, with the goal of optimizing production and efficiency while reducing costs and environmental impacts. For farming operations, it involves analysis of detailed, often real-time data on weather, soil and air quality, water supply, pest populations, crop maturity, and other factors such as the cost and availability of equipment and labor. Field sensors test soil moisture and chemical balance, which can be coupled with location technologies to enable precise irrigation and fertilization. Drones and satellites can be used to take detailed images of fields, giving farmers information about crop yield, nutrient deficiencies, and weed locations. For ranching and animal operations, radio frequency identification (RFID) chips and electronic identification readers (EID) help monitor animal movements, feeding patterns, and breeding capabilities, while maintaining detailed records on individual animals. Within the energy sector, the IoT may impact both production and delivery, for example through facilitating monitoring of oil wellheads and pipelines. When IoT components are embedded into parts of the electrical grid, the resulting infrastructure is commonly referred to as the "smart grid." This use of IoT enables greater control by utilities over the flow of electricity and can enhance the efficiency of grid operations. It can also expedite the integration of microgenerators into the grid. Smart-grid technology can also provide consumers with greater knowledge and control of their energy usage through the use of smart meters in the home or office. Connection of smart meters to a building's HVAC, lighting, and other systems can result in "smart buildings" that integrate the operation of those systems. Smart buildings use sensors and other data to automatically adjust room temperatures, lighting, and overall energy usage, resulting in greater efficiency and lower energy cost. Information from adjacent buildings may be further integrated to provide additional efficiencies in a neighborhood or larger division in a city. The IoT has many applications in the health care field, in both health monitoring and treatment, including telemedicine and telehealth. Applications may involve the use of medical technology and the Internet to provide long-distance health care and education. Medical devices—which can be wearable or nonwearable, or even implantable, injectable, or ingestible —can permit remote tracking of a patient's vital signs, chronic conditions, or other indicators of health and wellness. Wireless medical devices may be used not only in hospital settings but also in remote monitoring and care, freeing patients from sustained or recurring hospital visits. Some experts have stated that advances in healthcare IoT applications will be important for providing affordable, quality care to the aging U.S. population. Integration of IoT technologies into manufacturing and supply chain logistics is predicted to have a transformative effect on the sector. The biggest impact may be realized in optimization of operations, making manufacturing processes more efficient.