“Italian entrepreneur Dominik Schiener, a co-founder of the IOTA Foundation, was a speaker at Autonomy, an October 19–20 urban mobility conference in Paris. He recently spoke to The Innovator about how the foundation aims to help big corporates use blockchain technology to create new business models and new revenue streams.
Q: What is the IOTA Foundation and who is behind it?
DS: The IOTA Foundation is a non-profit foundation registered in Germany with the purpose of bringing distributed ledger technologies and ecosystems to maturity. We bring large conglomerates, as well as startups together in a collaborative environment that fosters permissionless innovation. With the Foundation we intend to develop and standardize new distributed ledger protocols, and make it easy for anyone to build production-ready applications with it.
The IOTA Foundation was founded by me and David Sonstebo. Right now we are working on a framework that makes it possible for companies all around the globe to join, contribute and benefit from products and services offered.
Q: Who are the members?
DS: The members are mostly individuals that have joined the IOTA Foundation to give advice on domain-specific topics such as mobility, energy, healthcare, etc. For example Oliver Bussmann, who is the ex-CIO of UBS and SAP, is part of the Foundation.
When it comes to corporates joining, we are right now fully finishing up the membership structure of the Foundation, and will make it possible for corporates to join beginning inDecember this year. We already have more than 10 letters of intent from some of the largest multinationals in the world, so I’m confident that we will establish the IOTA Foundation as one of the leading entities when it comes to permissionless innovation and distributed ledger technologies.
Q: What is the motivation and criteria for joining?
DS: Blockchains and distributed ledgers are still in an experimentation phase. We have to determine what works and what doesn’t before we will see production-ready applications go live. The IOTA Foundation is there to help corporates and startups to move away from Proof of Concepts, towards production-ready applications by having a framework that enables different parties to collaborate on use cases, and to contribute towards the development of the base protocols themselves. We want to go beyond the typical alliances that center around a specific technology, and instead offer joint-collaboration opportunities for use cases across all industries. There are key sectors that we will initially focus on, but the IOTA technology has vast potential across all industries.
Q: What technology problems need to be solved before businesses can take full advantage of the IoT and leverage data from it?
DS: There is still a lot of work to do before distributed ledgers are production ready and can run on embedded systems. Right now, the entire ecosystem is in a Proof of Concept stage, where we are still trying to figure out what works and what doesn’t. This is true for the distributed ledger protocols themselves, but also for many of the applications and business models that run on top.
We need to develop a framework that makes it possible to determine what application stack to chose for which IoT environment. The best way to get there is to start experimenting and to actually share the learnings and the “do’s and don’ts” from these use cases.
Q: You’ve said that IOTA is planning a new data exchange which will allow corporates to exchange data. What sorts of data streams are your corporate members interested in capturing?
DS: What we’re developing is the first digital ledger-based data marketplace that makes it possible for users to buy and sell data with micropayments. The data marketplace makes it possible for sensors to sell their data, either by selling access to a data stream itself, or by selling each individual data packet. What’s very unique about this data marketplace is that it fully runs on IOTA: with our micropayment capability, machines can easily pay each other for small data sets while being able to fully verify the authenticity and integrity of the data.
This data marketplace is incredibly powerful, as it offers entirely new possibilities for corporates and startups to acquire new revenue sources. With this data marketplace we want to showcase what new business models are possible with IOTA.
Because this is a Proof of Concept initially, where we want to experiment and offer corporates an opportunity to learn more about IOTA itself, we offer only non-sensitive data (e.g. weather and environmental data, current states of machines, etc.). For the actual data marketplace, corporates will have an opportunity to sell any kind of data, whether it’s structured or unstructured, raw or analyzed.
Q: And what sorts of services might they launch with the data they buy?
DS: The really powerful component of the data marketplace is the ability to make smarter decisions. Any kind of machine learning, big data and analytics algorithm will greatly benefit from the ability to acquire fine-granular and diverse data sets. Even smart contracts will be able to acquire data from sensors, and then make automated decisions with that data. Because this will be an open marketplace, we will see different roles be filled by certain service providers. For example one company is specialized in analyzing and re-packaging datasets for a certain industry, while another one is only interested in selling raw data. Through this we enable a variety of companies to participate and contribute directly with their internal resources.
How do you get companies interested in sharing their data to get enough volume on the network?
DS: Initially this is a Proof of Concept where companies can participate by simply deploying sensors in their offices or innovation labs. All of the data which is being submitted is non-sensitive, which obviously makes it incredibly easy to participate. Once we start rolling this out as a full-fledged product, we will work closely with some key partners to fill buy- and sell-side demand.
Q: When will cars be able to act as their own autonomous agents and pay for their own gas and charge for their own services?
DS: The major bottleneck is to determine where and how to integrate distributed ledgers inside the vehicle. There are different approaches that we’re currently working on, but our goal is it to have the first IOTA-based Car eWallets ready by 2018 with a mobile phone integration. Integrating IOTA into an ECU is a bit more challenging and will take time to fully develop, but I think that by 2020 we will see the first cars produced that have a wallet integrated during production.
Q: How do you see mobility as a service evolving?
DS: Instead of a single entity owning an ecosystem, we will see the network participants (i.e. cars / drivers) collectively owning the ecosystem and being able to decide on certain outcomes. This gives drivers the ability to fully participate.
Q: IOTA is not just focused on the transportation sector: you are also focusing on supply chain integration, energy and other areas. What sort of blockchain applications do you foresee for these sectors?
DS: Many of the applications that we are building with corporates today are around IOTA’s core capabilities: to secure data and the ability to transact on a micropayment basis. In the energy sector, we for example are working on several transactive grid concepts as well as securing smart meter data; in supply chain we are working together with some of the largest logistics companies in the world on securely tracking goods along the supply chain and to digitize important trade documents (e.g. Bill of Lading); and in the industrial sector we are securing machines in the shopfloor to have a secure audit trail.
Q: What advice do you have for corporates who want to explore what they can do with blockchain technology? Should they believe the hype?
A: We have to look beyond the hype and understand the potential and most importantly, the limitations of the technology. Many of the use cases that are being proposed today don’t need a blockchain and are better off without it. There is tremendous potential, but the only way to start benefiting from this technology is by co-creating and co-learning.