Scalability, Security, Trust: IOTA Offers Solutions to Key Blockchain Challenges
More from the Author Cal Evans
The IOTA Foundation, once a leading blockchain startup, is shifting focus from industrial IoT to broader ecosystem projects and expanding into regions like Africa and the Middle East due to better support and less stringent regulations.
Despite blockchain’s credibility issues, IOTA aims to prove its real-world utility through global partnerships and innovative projects.
In the 2010s, IOTA was hailed as one of the most promising European blockchain startups, especially for those interested in the industrial Internet of Things (IoT). However, the journey since then has been turbulent. Today, IOTA’s co-founder expresses embarrassment over blockchain’s reputation, with numerous pilot projects failing to commercialize and a shift in focus away from industrial IoT.
IOTA, established in Germany in 2017 as a non-profit to advance its technology, is now navigating new directions. Co-founder and chairperson Dominik Schiener reflects on these changes and the challenges faced.
From Vision to Reality
IOTA was co-founded by David Sønstebø, Dominik Schiener, Dr. Serguei Popov, and Serge Ivancheglo in 2015. It aimed to create a distributed ledger technology facilitating transactions in the IoT ecosystem, with machine-to-machine trading, feeless transactions, tamper-proof data, and low resource demand at its core.
Imagine an autonomous car booking its repair at a service center, driving there, and paying—all autonomously. Or electric vehicles earning through peer-to-peer charging. Yet, Schiener acknowledges that these industrial IoT applications are no longer the primary focus.
“We’ve really focused more on these higher-level ecosystem creation projects, which include trade, digital identity, and asset organization,” says Schiener. The difficulty in transitioning successful pilots to commercial applications, coupled with different innovation cycles, has stymied progress.
The Credibility Conundrum
Schiener admits blockchain faces a significant credibility issue. “It has a 100 per cent credibility problem. I’m sometimes ashamed to call myself an entrepreneur in this space,” he confesses. The technology’s potential for positive change has often been overshadowed by speculative investments and get-rich-quick schemes.
Moreover, Schiener criticizes consortium structures like GAIA-X and the moveID project, where high failure rates and unmet expectations prevail.
A Strategic Pivot to MENA and Africa
The IOTA Foundation has shifted its focus outside Europe, prioritizing regions like Africa, the Middle East, and the UK due to better support and less stringent regulations. “Europe is very focused on regulation rather than innovation,” Schiener notes, adding that high compliance costs stifle innovation.
New Horizons and Partnerships
Despite setbacks, IOTA is making strides in global partnerships. Collaborations with TradeMark Africa, the World Economic Forum, and the Tony Blair Institute for Global Change aim to enhance cross-border trade efficiency through the Trade Logistics Pipeline (TLIP) platform. In the UK, Mobius Technology is piloting TLIP for chilled poultry shipments.
IOTA is also making headway in academia and industry. The I3-Lab at Imperial College London focuses on the circular economy, while the Eviden Digital Passport solution integrates IOTA’s technology into the EU’s circular economy action plan.
The Road Ahead
The IOTA Foundation remains committed to proving blockchain’s real-world utility, working on solutions like the European Blockchain Pre-Commercial Procurement to streamline intellectual property rights management.
While IOTA’s journey has had its ups and downs, the foundation’s efforts to address blockchain’s credibility crisis and pivot to regions with more supportive environments could herald a new chapter for this pioneering technology. The success of these initiatives will determine whether IOTA can finally realize its vision of a connected, decentralized future.
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