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What Is a Smart Home and How Does It Work?

Updated Jan 6, 2023

Updated Jan 6, 2023

Home > Maintenance & Renovation > What Is a Smart Home and How Does It Work?

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Part security system, part cost-saving investment, and consisting of advanced, interlinked appliances, smart home systems can feel like science fiction made real. If you’ve looked into investing in a smart home, it can be easy to become overwhelmed. There are dozens of smart home systems to choose from, all offered by a menagerie of companies, each that interacts with countless home appliances. We’re here to help flatten the learning curve for homeowners by answering the question, “what is a smart home,” by looking at how it works and explaining some of the main benefits. 

What Is a Smart Home? 

Smart home, home automation, smart home technology, and domotics are umbrella terms that all describe a home whose appliances (fridge, dishwasher, washing machine, etc.) and systems (HVAC, security, smart lighting, etc.) are connected through a network and controlled by remote devices (typically a phone, remote control, or tablet).

Smart homes come in many shapes and sizes, with some systems controlling everything from your refrigerator to your blinds, while others can be as small as a single smart thermostat. These systems are often referred to as the Internet of Things, or IoT, as they’re a system of things (appliances, devices, and systems) that all connect through a network. Interestingly, the term “Internet of Things” is a misnomer, as your smart home network doesn’t necessarily need an internet connection to work, only a functioning local network.

diagram concept showing smart home system interconnection
Image Source: Canva

With a smart home, you can have enhanced control and oversight of household appliances and systems. You can set schedules, monitor events while out and about, and keep track of important information from your phone or tablet. As such, a smart home allows you to save money in the long run by disabling electricity-consuming devices when you leave and regulating home systems for optimum efficiency. You also gain improved security, from cameras to window-break sensors, motion tracking, and live video feeds. A smart home offers a wide variety of comfort and convenience with voice activation, schedule management, and even machine learning so your system can adapt to your specific preferences and needs. 

What Is a Smart Device? 

A smart device is any appliance or system, like the Amazon Smart Plug, designed to connect to a smart home hub or integrated network. These devices can be connected and controlled directly through an app or integrated into a larger smart home system. They can also be third-party, like most smart TVs or refrigerators, or proprietary and part of a larger interconnected system, like the Google Nest Thermostat

What Is a Smart Home System? 

A smart home system refers to the specific medium in which your network communicates. Smart home systems come in one of three categories, wired, wireless, or hybrid. Each of these systems uses specific protocols (languages) to communicate.

  • Wireless smart home systems: These networks function over Wi-Fi, are easier to install, and are less expensive. However, they have weaker security and may require Wi-Fi extenders or additional access points if you have a larger home. 
  • Hardwired smart home systems: Wired systems are more expensive and challenging to implement, but they’re more secure, reliable, and expandable.
  • Hybrid smart home systems: Hybrid systems combine hardwired devices and wireless communication to create a diverse smart home system. Hybrid systems, while handy, can be complex to set up and may limit the type of devices you can connect. 

What Is a Smart Home Protocol? 

Smart home protocols, also called home automation operating standards, are the languages devices connected through a smart home system use to communicate. While not every device or system needs protocols to communicate with a smart home system (more simple installations like lights and power outlets typically don’t), most major appliances and devices do. Only certain protocols work with certain systems, and if your device requires a protocol, it must be able to communicate with a system’s protocol to be compatible with it. Many popular protocols are cross-compatible, making communication between devices relatively simple. 

Some of the most common protocols for each type of system include:

  • Wireless smart home systems: 
    • Zigbee: This protocol has strong security and a long transmission range and is widely popular among manufacturers and consumers.  
    • Z-Wave: Z-Wave protocols turn each device in the system into a node that transmits information throughout the network – this system is called a mesh network. While versatile, Z-Wave doesn’t play well with other brands like Alexa and Google Home, requiring a Z-Wave hub to connect them.  
    • Bluetooth Low Energy (BLE): While this protocol possessed range problems in the past, its recent adaptation to mesh networking has improved its capabilities and increased its popularity. It uses government-grade inscription, making it extremely secure. 
  • Hardwired smart home systems: 
    • X10: Invented in the 1970s by Pico Electronics of Glenrothes, Scotland, it was the first-ever home automation system standard. This system sends information through your home’s existing wiring. While many homes and systems still use X10, modern construction and devices are leaning away. 
    • Universal Powerline Bus (UPB): This protocol functions similarly to X10, turning your home’s wiring into a communication system, but it’s modernized and accepted by more devices. 
  • Hybrid smart home systems: 
    • Insteon: One of the first hybrid protocols, Insteon was created in 2005. It uses your home’s wiring system and a wireless band to create a complex mesh network that connects wired and wireless devices. While many devices and smart appliances can connect to this network, it’s primarily used for systems like lights, power outlets, thermostats, and security systems. 

What Is a Smart Home Hub?

A smart home hub, also known as a smart hub, home automation hub, bridge, gateway, controller, or coordinator, is your smart home system’s nerve center and core. A hub is a piece of hardware (or sometimes software, like the Apple Homekit) that interfaces with and controls communications between smart home devices. Software hubs often come as apps for your phone or tablet, while hardware hubs typically connect directly to the router.

smart home hub system
Image Source: Canva

Many systems have their own hubs dedicated to communicating with related devices, like the Vivint Home Security Smart Hub. Numerous other third-party hubs exist and are typically designed to communicate between multiple service devices, like the Samsung SmartThings Hub.

What Are the Pros and Cons of a Smart Home?

Pros: 

  • Energy savings: By turning off lights, computers, air conditioning, and other connected devices when not at home, you can increase energy efficiency and save on electricity bills.  
  • Enhanced home security systems: With motion sensors, smart locks, window break detections, security cameras, and subscription monitoring services, a smart home offers a suite of enhanced security options. You can even set up notification systems to alert you in the case of any at-home activity while you’re out and about.
  • Greater control of home systems: A smart home allows you to control appliances, systems, and entertainment devices from your mobile device or tablet, creating enhanced ease of use, convenience, and customization. Some systems even come with voice commands. Programs like Amazon Echo utilize smart speakers combined with a virtual assistant to create a hands-free voice control system.
  • Delegating certain tasks to AI or digital helpers: There are numerous AIs, like Amazon Alexa, Siri, and Google Assistant, that you can delegate tasks to, like controlling lights, answering questions, and even ordering deliveries. 
  • Certain smart home systems and features can increase resale value: Some installations, like smart thermostats, smoke detectors, integrated garage doors, and security systems, can increase resale value.

Cons: 

  • Security risks: Some networks and devices, particularly wireless ones, are vulnerable to hacking and other security threats. 
  • Expensive: Smart home products and systems can be extremely expensive depending on your setup and the size of your house. The average cost for a smart home system in a single-family home is between $2,000 and $5,000, but some systems can reach the tens of thousands. 
  • Product limitations: Depending on the type of system and protocol you use, you may be restricted or limited in the appliances and devices you can connect. 
  • Learning curve: Smart homes and smart devices can have a high learning curve depending on your experience with technology.

How Much Does a Smart Home Cost? 

One of the most attractive features of smart homes is their customization. Countless devices, services, systems, and programs can alter a smart home’s cost. Furthermore, the difference between DIY setups and professional installations is massive, with some DIY systems costing as little as $1,500 and high-end installations running upwards of $10,000. However, for a full suite in a single-family home, the national average runs between $2,500 and $5,000, averaging around $3,500. 

Final Insights on Smart Homes 

tablet showing smart home connectivity
Image Source: Canva

The world of smart homes can feel like a series of interconnected and increasingly complex rabbit holes. We recommend making sense of these systems on a brand-by-brand basis and looking at a company or service that you feel would improve the quality of your home. Do you want enhanced security features like smart front door locks and video doorbells? Vivint Smart Home Security is likely the best choice. But if you’re looking for a malleable system that “plays nice” with lots of devices, Google’s Smart Home could be better.

Disclosure: House Method participates in the Amazon Services LLC Associates Program. This affiliate advertising program is designed to provide a means for publishers to earn fees by linking to Amazon.com and affiliated sites.

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