The hidden goldmine: “No-coin DLT” and IOTAs feeless data-transactions
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Why crypto-adoption is moving at a snails pace Did you ever wonder what came out of these hundreds of announced “partnerships” of literally thousands of crypto-projects? Back in 2017 the vision seemed clear: Soon we will all have crypto-wallets in our cars and distributed ledger technology (DLT, for example blockchains or DAGs) as the backbone of the banking sector. We will pay our everyday expenses with certain cryptos and industry in general will soon use smart contracts to process their businesses. Four years later many of us sobered down: Not a single one of these crypto use-cases became true on a meaningful scale. The crypto-space grew both in size of the ecosystems and market-value, but it didn’t do so based of any real-world adoption. In fact, growth seems to be based simply on bigger players and rich influencers joining the zero-sum game of speculation. Reason 1 for lacking crypto-adoption: No regulations Real-world players, like industry or governmental bodies, have a very strong need for crystal clear regulations about crypto. As long as there are no state-sanctioned rules about how to buy, store, sell, account and tax cryptocurrencies, large-scale adoption will simply not happen from their side. The good news is that this problem will most likely be solved in another few years of time (for example, the EU is preparing MICA, an extensive legal-framework for crypto (https://digital-strategy.ec.europa.eu/en/policies/regulatory-framework-blockchain) ). Reason 2: Transaction Fees Many crypto-related use-cases rely heavily on high transaction numbers. Be it the processing of consumer payments, continuous micropayments for micro-services or even just efficient day-trading: Basically all use-cases, apart from long-term speculation, suffer immensely from piling up transaction fees. This problem is even worse in networks with variable transaction costs like Bitcoin or Ethereum – No company will ever rest an important use-case on unpredictable cost foundations. https://i.redd.it/6qnjbb2nkjf71.gif Getting the foot in the door: Feeless data-transactions – aka “no-coin DLT” Think about it: Any project, that can start TODAY with actual real-world adoption will benefit greatly from network-effects later on, when crypto-regulations are in place. There is one class of crypto-solutions especially suited to short-cut this waiting-period and strive for adoption today: No-coin DLTs (meaning, crypto-technologies that work without the use of ANY crypto-tokens). Use-cases, that can benefit from crypto-technology that DO NOT require to deal with crypto-tokens, automatically circumvent today´s most pressing adoption hurdles. To understand the full potential of no-coin DLT remind yourself of the most fundamental promise of DLT: Achieving trust in an otherwise trust-less environment Fact is, from a technical perspective it doesn’t matter if you write a number (aka a “crypto-token”) into a distributed database or if you write any kind of data into it. The idea to write arbitrary data into a distributed database is of course not new – in fact, many protocols allow for data to be written into their ledger. Even Bitcoin can be used in this way as a base-layer for, as an example, decentralized digital identity (DID) (see Microsofts open source project ION). To put it bluntly: DLT is much more than just a base-layer of currency. Instead, DLT enables the creation of a world-wide base-layer of trust. The central idea here is called data-anchoring: Once you write the hash of some data into the ledger, it is from that moment on immune to undetected tampering. Every single change of the data changes its hash-value, making it different from the one stored in the DLT and exposing it immediately. In a world with regular manipulation of important data by companies and governments, this data-anchoring enables thousands of interesting use-cases. Use-cases, that can be tackled TODAY, without the need for crypto-token regulations. IOTA enables no-coin DLT use-cases via feeless data-transactions While many DLTs allow for arbitrary data to be written into their ledger, this process is usually coupled to the payment of transaction fees. Fees however require the acting party on deal with crypto-tokens, making actual no-coin DLT use-cases impossible. Few other projects work without fees, most notably NANO. NANO however is designed to only process token-transactions and currently does not allow for pure data-transactions. Because of this, Nano also does not allow for no-coin DLT use-cases. IOTA is the only major project that allows both for feeless transactions and pure data-transactions – a unique selling-point towards real-world entities that want to dabble with the potential of crypto today. Reality check: Does IOTA have an edge in real-world adoption? Because of its unique position, IOTAs adoption and ecosystem development is steeply increasing – notably, while the IOTA core protocol is not even fully finalized yet. The value-transactions on the mainnet are still fully centralized, with only the IOTA 2.0 DevNet being fully decentralized as of today (you can watch the DevNet live here: https://v2.iota.org/visualizer). To showcase how IOTAs feeless data-transaction are picked up by industry and governments I compiled a very incomplete list of various no-coin DLT use-cases that are currently build on IOTA (not including speculation-based use-cases such as DeFi or NFTs). I selected projects to showcase the wide scope of use-cases, leaving out many more also interesting adoptions. Use-cases: Autonomous electricity market (EU Horizon 2020 project “CityXChange”) Machines that autonomously create a smart electrical grit. Electrical cars (here: Jaguar Landrover) negotiate with energy-positive buildings and autonomous solar-panels in order to re-charge their batteries. This use-case is planned to be extended towards token use-cases too. https://blog.iota.org/iota-cityxchange-community-update-85f43894bcca/ Data-confidence (Dell and Intel, Project Alvarium) Project Alvarium builds a data-confidence fabric. Once the hash of any given data is posted into IOTAs Tangle, it can in the future always be proven that this data was not altered. The processing of data by several independent partners can therefore be tracked transparently. https://blog.iota.org/together-iota-and-dell-technologies-demonstrate-project-alvarium/ Trustless document-exchange for Export/Import (Trademark East-Africa) Inter-continental trade is a paperwork-hell – mostly because parties don’t trust each other, which leads to multiplying work-load. With standardized documents posted on IOTAs Tangle all parties can verify that documents are unaltered. https://www.trademarkea.com/news/new-iota-partnership-eases-out-business-woes-in-east-africa/ Transparency for customers of green energy (Heliostorage) Customers of zero-carbon energy providers want transparency about the carbon-claims of the company. Heliostorage provides this transparency by posting all relevant data on the IOTA Tangle. https://www.np.reddit.com/r/Iota/comments/n8ywqp/heliostorage_energy_flow_controller_uses_iota/ Climate-gas emission monitoring (Canada, Chile) Improving transaprency in climate-gas monitoring by connecting sensors directly to IOTAs Tangle. Since centralized data-storage and centralized middle-men are omited, climate-fraud becomes much harder. https://www.climate-check.com/ Autonomous driving enables through smart reflector-posts (Germany “Projekt Alfried”) Smart reflector-posts communicate with autonomous cars in order to optimize traffic flow and help mitigate crashes. Every reflector-post becomes an acting entity, including its own decentralized identity on IOTAs Tangle. https://www.etogruppe.com/en/news/news-from-eto/project-alfried-will-be-built-on-iota-chrysalis.html (you might also want to see the EU2020 project ORCHESTRA for IOTA-based traffic-management https://blog.iota.org/orchestra-consortium-and-iota/) Supply-chain management (Zebra Technologies) World-marketleader for the production of barcode-scanners released a supply-chain tracking api for all their business-products, that anchors scanned data in IOTAs Tangle. https://developer.zebra.com/blog/introducing-zebra-savanna-and-iota-track-and-trace-ledger-api submitted by /u/Linus_Naumann |
