IoT is an entirely new concept for me, and I am just now reading the GadgetCoin white paper. I have not had time to study the W3C working group or any other resources on this topic. Note I did make a supportive comment early on in this thread, commending the attempt to create user level apps utilizing crypto-currency.

Some initial thoughts on IoT/WoT:

• Why have IoT private databases? Use encryption instead, which is more secure. Network intrusion is impossible to 100% prevent, even if you use a sneakernet, e.g. the Stuxnet attack.
• Reputation/trust systems for consensus are not advisable because they are not anti-fragile (see Taleb's math). Thus they trend to centralization over time.
• Low-power, resource constraints favor Winternitz signatures over ECDSA for authentication in terms of the CPU cost although the bandwidth cost rises exponentially compared to ECDSA as bit-security increases. For encryption, a Diffie-Hellman exchange will be required to establish a shared encryption key, but this will not be a real-time requirement.
• Afaics, smart contracts incur the multiplicity of verification cost. The only solution I thought of is zk-snarks, but then the proving cost is very high, which isn't applicable to low, resource IoT/WoT. Seems contracts for IoT will need to be hard-coded efficient scripts, unless another technical solution can be devised.