In the 2010s, IOTA was one of the most interesting European blockchain startups, especially for anyone interested in industrial IoT like me.
But today, its co-founder is embarrassed by blockchain’s reputation, There is a graveyard of pilot projects never commercialized and a shift of attention to other regions.
Today, IOTA is a tokenbut it is also a non-profit organization founded in Germany in 2017 to advance IOTA technology. I spoke to IOTA Foundation co-founder and chairman Dominik Schiener to discover more.
IOTA’s Vision Collides with Reality
IOTA was co-founded in 2015 by David Sønstebø, Dominik Schiener, Dr. Serguei Popov and Serge Ivancheglo. It was designed as a distributed ledger technology to facilitate — as the name suggests — transactions in the IoT ecosystem.
At the heart of it all was machine-to-machine trading, with a zero-fee transaction base, tamper-proof data, and low resource demands.
Imagine, for example, a self-driving car that can not only detect a service failure, but also schedule a repair appointment at a service center equipped with autonomous robots, drive there and pay, all without human intervention in the transaction.
Or electric vehicles that generate revenue through peer-to-peer charging or by sending electricity back to the grid.
However, today Schiener sees industrial IoT as adjacent rather than central to IOTA’s mission:
“It’s not something we’re really focusing on anymore. We have type of I stopped doing these IoT use cases.
We have Really more focused on these higher level ecosystem creation projects, which include commerce, digital identity and asset organization.“
As I wrote in an article on mobility and blockchainThe problem with industrial blockchain use cases is not the technology itself—there are many successful pilots—but their transition to commercialization. It didn’t help through fundamentally different innovation cycles.
Schiener admits: “It’s always Good to give the machines a wallet and allow them to trade, but the economic uses weren’t there.
Because why should a car have a wallet? It makes so much conceptual sense. But from a business point of view, it was just very difficult to get it off the ground because there were problems In fact “by integrating it into the car.”
In addition to the standards and interoperability challenges that have plagued IoT and blockchain since the dawn of time, the COVID influx has led to a decrease in OEM investment in emerging technologies (can IOTA still be called an emerging technology?), and that meant a nail in the coffin of many innovation projects.
Schiener concedes that “blockchain was also a solution to try to find problems.”
“But it was the same with AI. AI was like an incredible solution, trying to find the RIGHT Problems. NOW, with GPT CatWe have I experienced this unique moment when it became a global knowledge base.
I think with blockchain technologywere I’m still looking for that GPT Chat moment.”
But twelve years is a long time. to wait for for the ideal use case to be adopted en masse.
IOTA Co-Founder Admits Blockchain Credibility Crisis
He also admits that blockchain has credibility issue
“There is a 100% credibility problem. I am sometimes ashamed to call myself an entrepreneur in this field.
You start with, “Hey, how can this technology be used to Really ‘drive positive change in the world?’
And then you realize, “Hey, this technology was used to launch new coins so people could get rich. fast.
It’s like a modern lottery, and it’s fair type of sad.”
Schiener also admits that he would personally distance himself from consortium structures such as GAIA-X And the moveID project — a group of interconnected projects creating a basis for the future of data infrastructure in Europe, such as vehicle-for-all communication and transaction standards.
“Because, quite frankly, the results are never really what we hoped for. The failure rate is just too high.”
It takes a long time to move away from the use cases you build your foundation on, your name and your regional orientation.
A strong pivot from Europe to the MENA region and Africa
In recent years, the IOTA Foundation has focused on making its mark outside of Europe, with a particular focus on Africa, the Middle East and the UK, as part of a broader strategy to establish itself as a global digital infrastructure and innovation ecosystem.
It’s a deliberate pivot away from Europe, where Schiener says overregulation and slow innovation have pushed the foundation to focus on other regions.
Schiener said:
“The support in all these other regions was just much better. Europe is very much focused on regulation rather than innovation. I remember applying to innovation groups where 25 percent costs would be allocated only to compliance with the subsidies. Innovation at this level just “It doesn’t make sense.”
He notes that when the company came to Germany, “we never really had any real production cases.” it’s happening thereNo one is willing to take these risks. It is deeply rooted in culture.
“For the country to change and move forward, it is necessary needs adopt and embrace this technology Finally.“
Our goal is to use blockchain in the real world, to have it adopted by governments and by companies for their different use cases.
And so we’ll continue to carry that flag and make sure that blockchain doesn’t have this credibility problem, that we Really shows that There is “Real-world use cases, like this digital product password, that will have a positive impact on people’s lives.”
IOTA is currently working in partnership with Trademark AfricaWorld Economic Forum (WEF), Trademark Africa and the Tony Blair Institute for Global Change will develop THE Trade Logistics Pipeline Platform (TLIP).
TLIP aims to significantly reduce transaction costs and improve the efficiency of cross-border trade operations. The IOTA Foundation has partnered on a pilot project in Kenya focused on the country’s flower exports. as well as working in exporting tea to the UK, fish to Belgium, and textiles in the United States.
In the UK, Mobius Technology is conducting a pilot project use IOTA’s TLIP to manage refrigerated poultry shipments.
Schiener likes the UK. “They stand up to Europe.”
In July of this year, the IOTA Foundation launched the I3 Laboratory at Imperial College London, a research lab dedicated to the circular economy. The lab aims to develop and use digital tools to advance the circular economy.
However, IOTA has not completely left Europe, recently announcing a partnership with Evidence and the launch of the Eviden Digital Passport (EDPS) solution, “powered by IOTA technology”.
The passport integrates IOTA’s open-source, scalable and regulatory-compliant DLT and is part of the broader EU system. Action plan for the circular economy.
Similar to battery passports that verify the provenance, chemical composition and identity of batteries and measure their environmental impact without the risk of data falsification. The EDPS may to be used in various sectors of activity, such as manufacturing, fashion and textilesas well as food and drinks.
At the end of 2023, IOTA launched the IOTA Ecosystem DLT Foundation in Abu Dhabi as part of broader efforts to digitize global trade and make trade finance solutions more accessible. The Foundation recently launched a Sharia-compliant token.
However, while partnerships fueled by substantial contributions from foundations like IOTA can catalyze innovation, they differ significantly from traditional commercial ventures.
For example, the IOTA Foundation invested $1.2 million in the Imperial College London lab and committed $100 million in IOTA tokens to the Abu Dhabi initiative, with plans for additional investments. Is such financial support the same thing? level of legitimacy or commercial value as a traditional business partnership, or is IOTA simply giving something back?
Let’s face it: there’s no shortage of IoT pilot projects and research and development efforts. Are we closing the loop? And many companies, including Circularize, CirculatorAnd Everledger are already strongly anchored in digital product passports and circularity.
Schiener attributes to IOTA securing of These government partnerships in new regions to the foundation’s non-profit status:
“We are not obliged generate profits And We have been in the market for a long time.“We are here to solve a problem for them. We are not here to sell them something.”
However, despite their laborious documentation, he admits that previous Horizon 2020-funded projects have contributed to the brand’s reputation abroad.
Furthermore, the IOTA Foundation is not saying goodbye to Europe anytime soon. It has also developed a prototype solution within the European pre-commercial blockchain purchasesfunded by the European Commission, to streamline the management of intellectual property rights using distributed ledger technology and smart contracts for media.
The prototype replaces traditional negotiations with automated and transparent digital contracts. Will the prototype become a commercial product? Or Can we add it to the innovation graveyard?
Can IOTA be the backbone of a more inclusive world?
Schiener admits that he is has been in the blockchain for a third of its life life, since 2011.
“I Really I grew up with it. For me, it’s all about making sure that we finish what we started with IOTA, because I believe IOTA is one of those transformational technologies.
We want to make it more transparent, more efficient and powerful enough for people to participate in the global economy.
We started with financial inclusion, who was one of the Bitcoins main use cases at the time.
And that’s what I Really I want to do more. This That’s why we work in regions like Africa, to give people new access to the global economy. SO We Really think Blockchain is here as the foundational trust infrastructure to erase barriers and ensure the world is less divided than we are. In fact able to collaborate and coordinate more closely with each other.“
