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The Biggest Risk to Investing in the Internet of Things

By Tim Beyers – Jan 24, 2014 at 4:09PM

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Suddenly, hackers are targeting the appliances in your home.

Investing in the Internet of Things may be more problematic than investors would like to believe, Fool contributor Tim Beyers says in the following video.

Why? Your fancy new fridge is just as vulnerable as the average PC. According to security firm Proofpoint, cyber crooks have already hacked more than 100,000 smart appliances in the U.S. for sending out some 750,000 spam emails.

If the problem gets worse, it's because we're going to see more of these sorts of appliances. Look at Google (GOOGL -1.30%), which recently spent $3.2 billion to acquire Nest. The company's smart appliances are governed via apps, and software can always be hacked. Research firm Gartner expects upwards of 30 billion devices plugged into the Internet of Things by 2020.

In Google's case, we can fairly surmise that the intent is to collect data about power usage, peak hours, living conditions, and other such trivia that might reveal a disruptive opportunity. Not much use to a hacker, right? Perhaps. But what if your thermostat is smart enough to contain information about your local service provider, who also has your account name and address? Clever thieves don't need much more to begin stealing your identity.

Of course, every time a paradigm shifts, new risks are revealed. Will you plug your home's smart appliances into the Internet of Things? Are you investing in the promise of the technology?  Please watch the video to get Tim's full take, and then leave a comment to let us know what you think.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Google at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool recommends Google. The Motley Fool owns shares of Google. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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