We sat down with the founder of IOTA, Dominik Schiener to talk about how the foundation came to be, their new partnership with Jaguar Land Rover, and more.
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Dom Schiener was just 14 when he was first introduced to crypto and blockchain. The young entrepreneur was, as he describes, “online hustling,” and looking to create a PayPal account to run his business when he realized the age restriction was 18. Not willing to accept defeat, he went looking for a different way to transact. Enter Bitcoin.
“I immediately grasped this concept, and this power of permissionless innovation - a person like myself was able to start accepting [Bitcoin] and transferring money globally without any restrictions. I was also able to start contributing to this new economy that was being created. After that, I became so convinced of it that I started doing it full-time,” said Schiener.
In 2013, Schiener launched his first crypto business, Bithaus GmbH, a crypto exchange. He was immediately faced with the obstacles of running a business in the premature space. “Every time I spoke with a bank, for example, they said, “Hey, please never contact us again.”
Though Bithaus ultimately failed to take off, building a crypto company exposed Schiener to the early innovators in the space, including his fellow co-founders of IOTA; David Sønstebø, Serguei Popov, and Sergey Ivancheglo. The experience also ignited his passion for the technology behind cryptocurrencies, leading him and his team to start IOTA.
The group had a deep understanding of blockchain and its shortcomings, so when they created IOTA, they decided to forgo the blocks, chains, miners, and fees to create a new kind of distributed ledger that was scalable. They created the Tangle Network, which uses a DAG instead of a Blockchain to store its ledger. According to the IOTA Foundation, blockchain has an inherent transaction rate limit, because all participants agree on the longest chain, and discard forks and side branches. The Tangle, on the other hand, allows different branches of the DAG to merge, resulting in a much faster overall throughput eventually.
With the Tangle Network as the foundation, the team was able to pursue their ultimate goal – connecting all Internet of Things (IOT) devices on one trusted and distributed ledger. Why focus on IOT? According to Schiener, it’s simple, “IOT is going to be everything. Everything will be connected. Everything will be smart, and everything will need to be able to transact with each other.”
“IOT is going to be everything. Everything will be connected. Everything will be smart, and everything will need to be able to transact with each other.”
This digital infrastructure would make it possible for all internet devices to speak to each other. For example, your car will pay for parking for you. It will also pay the electric charging station, so you don’t have to get out of your vehicle. It will report traffic, accidents, and road conditions to authorities, rewarding you for your data.
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If Schiener has his way, IOTA will serve as the backbone of a new automated machine economy, and their recent partnership with Jaguar Land Rover is taking him one step closer to this goal. With Jaguar Land Rover, IOTA is building the first rewards based system where drivers earn IOTA tokens in exchange for information collected by their vehicles. This information is delivered directly to local authorities to help them improve the infrastructure of their cities. The smart car wallet will also enable payments without drivers ever having to take their eyes off the road.
According to Schiener, the partnership is part of a larger goal to give people more control over their value. “Many people have realized that the internet and data gathering companies have caused a digital divide in our society. We need to think radically different about we manage data, how we give access to data, and how we monetize data.”
IOTA has built a digital identity platform on top of the IOTA protocol that encrypts and secures information, giving people full custody over their data. “Technologies like ours make it possible for people to own their data and make decisions with who they share it with,” said Schiener.
IOTA’s mission doesn’t come without challenges – both in regard to regulation and also building the technology, but Schiener is confident that their project will drive real utility and help people understand the full potential of crypto as an asset class.
Music by Patrick Jessop