In the 2010s, IOTA was hailed as a groundbreaking European blockchain startup, particularly for its potential in the industrial Internet of Things (IoT). However, the ambitious vision of revolutionizing machine-to-machine transactions with feeless technology has faced numerous challenges over the years. Today, IOTA co-founder Dominik Schiener candidly expresses embarrassment over blockchain’s tarnished reputation and reflects on the turbulent journey of a company once considered a beacon of innovation.
The IOTA Vision – Revolutionizing IoT
Founded in 2015 by David Sønstebø, Dominik Schiener, Dr. Serguei Popov, and Serge Ivancheglo, IOTA aimed to create a distributed ledger technology (DLT) that would facilitate seamless transactions in the IoT ecosystem. Its core promise? To enable machine-to-machine trading, feeless microtransactions, and tamper-proof data exchange, all with minimal resource demand. The technology envisioned scenarios like autonomous vehicles booking and paying for their own repairs or electric cars earning income through peer-to-peer charging.
Yet, despite these bold ideas, Schiener acknowledges that the industrial IoT applications that once defined IOTA’s mission 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,” Schiener says, highlighting the shift in IOTA’s strategic direction.
Blockchain’s Credibility Crisis
Schiener’s frank admission of blockchain’s credibility crisis is a stark contrast to the hype surrounding the technology in its early days. “It has a 100 percent credibility problem,” he admits, lamenting the prevalence of speculative investments and get-rich-quick schemes that have overshadowed the technology’s real potential. This credibility issue has made it difficult for IOTA, and the blockchain sector more broadly, to transition successful pilot projects into fully commercialized applications.
The co-founder also criticizes the consortium-based innovation models, such as GAIA-X and the moveID project, for their high failure rates and unmet expectations. According to Schiener, the disconnect between innovation cycles and the demands of commercialization has stymied progress across the blockchain industry.
Facing regulatory hurdles and innovation fatigue in Europe, IOTA is now shifting its focus to more supportive regions, such as Africa, the Middle East, and the UK. Schiener is critical of Europe’s regulatory-first approach, which he argues has stifled innovation by imposing high compliance costs. In contrast, regions like MENA offer a more favorable environment for blockchain projects, encouraging innovation over regulation.
IOTA’s strategic pivot has also led to several promising partnerships. The foundation is working with organizations such as TradeMark Africa, the World Economic Forum, and the Tony Blair Institute for Global Change to streamline cross-border trade through the Trade Logistics Pipeline (TLIP) platform. In the UK, Mobius Technology is piloting TLIP for chilled poultry shipments, further showcasing IOTA’s global reach.
Despite its challenges, IOTA is forging ahead in both academia and industry. The I3-Lab at Imperial College London is leveraging IOTA’s technology to advance the circular economy, while the Eviden Digital Passport solution integrates IOTA into the European Union’s circular economy action plan.
Additionally, IOTA’s involvement in the European Blockchain Pre-Commercial Procurement project demonstrates its continued commitment to real-world applications. By focusing on intellectual property rights management, IOTA hopes to showcase blockchain’s utility beyond mere speculation.
Also Read: IOTA’s Stellar Year Continues – European Commission Trial and DeFi Growth
Can IOTA Regain Its Momentum?
While IOTA’s journey has been filled with ups and downs, the foundation’s ability to adapt and pivot to regions with more supportive environments could mark the beginning of a new chapter. Whether it’s through collaborations with global partners or its growing academic presence, IOTA’s efforts to rebuild trust in blockchain technology will play a crucial role in determining its future success.
As Schiener and the IOTA Foundation continue to push the boundaries of what blockchain can achieve, the next phase of IOTA’s evolution will reveal whether this once-promising startup can finally deliver on its vision of a decentralized, connected future.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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