Today I woke up to the most positive cryptocurrency news I think I may have ever heard.
But this is not only positive for crypto. It’s also positive for electric cars, self-driving cars, and, perhaps most importantly, how we will control and monetise our own data going forward.
I wrote yesterday about Tesla’s plan to let its owners hire out their cars as self-driving taxis while they’re not using them – which could earn owners an estimated £23,251 a year while they sleep.
Well, now Jaguar is going one better, with the help of IOTA.
If you’re a regular reader, you’ll know IOTA has partnered with many industry leaders, including BOSCH, Volkswagen Group (VW) and Fujitsu.
Last year, IOTA and VW made a proof of concept (POC) to show how self-driving VW cars could make money, pay for tolls, pay for servicing and even pay for automated charging, all through the IOTA tangle.
IOTA was supposed to begin being integrated into VW cars in quarter 1, 2019. But it later transpired that this POC was only a POC. For the time being at least.
Fast forward to last week, and Tesla’s announcement. In my article yesterday, I asked you to write in with your comments on buying a Tesla as an investment, rather than as a depreciating asset.
It was one of the biggest responses I’ve had, so clearly it’s an interesting idea.
The main objections people had to it were the costs of servicing, the mess the car could be left in and the insurance headache.
IOTA is solving the problems of self-driving cars
That’s where crypto comes in. Or more specifically IOTA. As readers pointed out, things like insurance, tolls, charging and maintenance would be a real headache if you wanted to send your car out as a self-driving taxi.
The bad passengers problem would sort itself out fairly simply. Passengers would be given a rating in the app like you get in Uber. You could just set it so your car only picked people up with a rating above a certain level.
New Teslas also have internal cameras. So it would be very easy for the app to work out if someone damaged the car and bill them appropriately.
The problem of servicing, charging and tolls is harder. And that’s where crypto comes in. (Not in Tesla’s vision as far as I can see. But certainly in VW, BMW and Jaguar’s.)
Each car would have an IOTA wallet. This wallet would earn payments for things like automatically reporting traffic, potholes, weather conditions, etc.
It could also be topped up by the user, or in the case of a self-driving taxi, it could convert a certain percentage of each fare.
The IOTA would then be used to pay for tolls, automatic charging and even servicing. This is the vision that Jaguar revealed on Monday.
Drivers will be able to earn cryptocurrency and make payments on the move using innovative connected car services being tested by Jaguar Land Rover.
Using ‘Smart Wallet’ technology, owners earn credits by enabling their cars to automatically report useful road condition data such as traffic congestion or potholes to navigation providers or local authorities. Drivers could then redeem these for rewards such as coffee, or conveniently use them to automatically pay tolls, parking fees and for smart charging electric vehicles. ‘Smart Wallet’ removes the need for drivers to hunt for loose change or sign up to multiple accounts to pay for a variety of everyday services.
‘Smart Wallet’ uses the latest cryptocurrency technology and Jaguar Land Rover has partnered with the IOTA Foundation to harness ‘distributed ledger’ technologies to make and receive these payments. Unlike other similar systems, due to its structure, it requires no transaction fee to operate and over time transactions will get faster across the entire network, forecast to include some 75 billion connected devices by 2025*. Drivers could also top-up the ‘Smart Wallet’ using conventional payment methods.
As you can see, Jaguar chose IOTA because unlike traditional crypto assets and blockchains, its transactions are free. Not only that, but these transactions can carry data – for free.
If you want to know more about why IOTA transactions are free, you can read my essay on blockchains vs DAGs from back in January 2018 here.
So these cars can make thousands of micro transactions a day, and not incur any costs for sending them. IOTA’s tangle takes care of all the legwork – for free.
Say a car collects the equivalent of £0.01 for every event it sends to the network. If this was done through a traditional system, it would end up costing more than that to send and receive the money. That’s the issue with “micro transactions”.
And that’s essentially why IOTA was created – to enable the machine economy: the Internet of Things (IoT). Hence the name IOTA.
And not to get too technical here, but the IOTA system can even enable pay-as-you-go insurance. This insurance is paid by the car, and contracted to the car, not the driver. And so it solves the insurance issue of hiring out your car as a self-driving taxi.
So, this is clearly very big news for crypto, and for the self-driving car revolution. But what about for personal data ownership?
Crypto is turning Facebook’s business model on its head
Well, if you read that statement by Jaguar above, you’ll see that it’s the owners that earn money for sharing data. This is the opposite of how most tech companies work today.
Most of the tech scandals that have come out over the past couple of years have come as a result of corporations selling on our data for profit.
The promise of blockchains (or tangles in IOTA’s case) is to turn this model on its head. You own your data and – if you choose – you can make money by selling it on.
Would I like to earn money from my car sending on traffic, weather and road conditions? Of course I would. But if I didn’t, I could turn it off.
Think about that model for a second and then think about how Facebook, Google, et al operate. They don’t give you a choice, and they certainly don’t give you a cut of the profits.
This is s game-changing announcement. And that’s probably why, unlike most crypto stories is was broken by major news outlets: first Reuters and then The New York Times.
So you’d think the whole crypto community would be happy, right? This is a major endorsement from a major industry. And it legitimises crypto as a whole.
And on the whole it has been received positively by the community. But it has also caused a lot of controversy.
On the news of this announcement, IOTA jumped 24%. As I write this, it’s still up 18%.
People who hold IOTA are happy. But, this being crypto, people who hold rival projects are not.
The fact that IOTA could seemingly obsolete whole swaths of the other top 100 cryptos with its arguably superior technology gets a lot of other project’s backs up.
Especially as IOTA is aiming to become the IoT protocol standard. From IOTA’s co-founder, Dominik Schiener:
“The smart wallet technology … can be easily adapted into all new vehicles. IOTA wants to enable interoperability with all these different players. So there is no Jaguar coin, no BMW coin, but one universal token for this machine economy.”
This infighting is one of the biggest problems in crypto today.
While prices are low, if a project you don’t hold starts making headway, it’s tough. The tribalism takes over. You want to bring that project down because yours isn’t in the limelight.
There isn’t enough money to go around right now. And many crypto communities are bitter. Hopefully as prices continue to recover the bitterness will fade and in-fighting will die down.
I ranked it in my first issue of Crypto Wire around this time last year, and I’ve been writing about it, and a number of other promising cryptos, every month ever since.
So, if you’d like to know more about IOTA, and get my in-depth research and ranking on it, as well as on those other promising cryptos, including BAT, VeChain, NEO and Ethereum, you can get a trial to Crypto Wire here.
Not only that, but you’ll get a free copy of my publisher Nick O’Connor’s tech investment book The Exponentialist, and a trial to Eoin Treacy’s Frontier Tech Investor, too. I think it’s a pretty good deal. Click here to find out more.
Either that, or maybe only the projects with real merit will succeed, which wouldn’t be so bad either.
And if you’re interested in making money from the electric car revolution, you’ll want to keep an eye out next week for Eoin Treacy’s latest research.
He’s been preparing a special report that could make early investors a massive potential return. I’ve already had access to it, and I can tell you, it’s pretty explosive.
I’ll tell you more about it in the coming days.
Until next time,
Editor, Exponential Investor