Tired of sharing your data with car manufacturers or web giants for free? Jaguar Land Rover is partnering with a cryptocurrency network to help drivers to earn money from the data their cars generate and then to spend it on a variety of everyday services.
Jaguar Land Rover says its new technology, developed with the IOTA Foundation, will reward drivers for sharing information on traffic congestion and road conditions. The potential purchasers of such information include local authorities and providers of navigation services, the firm says.
The reward will be paid to drivers in the form of a cryptocurrency called IOTA. IOTA, launched in 2016, is designed to work across the internet of things (IoT): the network of physical devices and everyday objects, such as cars, with their own connections to the internet.
The IOTA foundation says that it hopes its network will support 75 billion connected devices by 2025.
“We endeavour to make cars safer, cleaner and smarter”
After earning IOTA tokens from sharing their driving data, Jaguar Land Rover drivers will be able to redeem these tokens for rewards such as coffee, or use them to pay tolls, parking fees and to charge electric vehicles.
The tokens will be held in a new in-car ‘smart wallet’, removing the need for drivers to hunt for loose change or to sign up to multiple accounts to pay for a variety of everyday services, IOTA said in a press release.
Jaguar Land Rover says it is trialling the new technology at its engineering base in Shannon, Republic of Ireland.
Nick Rogers, executive director of product engineering at Jaguar Land Rover, said:
“Jaguar Land Rover is embracing autonomous, connected, electrified and shared mobility technology as we endeavour to make cars safer, cleaner and smarter for everybody.”
Holger Köther, director of partnerships at IOTA Foundation, said:
“Our distributed ledger technology is perfectly suited to enable machine-to-machine payments for smart charging, parking and tolls, in addition to creating opportunities for drivers to earn their own digital currency.”
IOTA’s network relies on a central coordinator
By contrast with a decentralised, permissionless blockchain like bitcoin, which relies on the expenditure of electricity by miners to ensure its network’s security, IOTA uses a different technology to process and record data.
Whereas each block in the bitcoin blockchain references all previous blocks (and all previous transactions) through a cryptographic linking technique called hashing, in IOTA each transaction references two previous transactions, forming not a linked list, but a complex structure called a Directed Acyclic Graph, or DAG for short.
This DAG structure, says IOTA, allows transactions to be issued continuously, as opposed to the discrete time intervals and linear expansion of a blockchain. Bitcoin blocks, for example, are produced every ten minutes.
Blockchain (bitcoin, ethereum) vs. IOTA tangle
Source: IOTA Foundation
In practical terms, compared to bitcoin’s key selling point of decentralisation and the absence of a single point of failure, this also means that IOTA’s network relies on a central coordinator to maintain the integrity of its data.
“The IOTA people are charlatans”
IOTA has come under attack by cryptographers in the past for failing to disclose its technical model.
“The IOTA DAG whitepaper does not even have a definition of security, the most basic prerequisite in modern cryptography,” Dionysis Zindros, an Athens-based cryptographer, tweeted last year.
“Even if we break [their network] completely, they come back and say it wasn’t in their model. But they never explained what their model is,” said Zindros.
“The IOTA people are a shame to the crypto community and charlatans,” Zindros told New Money Review.
“IOTA has been good at getting partnerships and funding–it’s been their modus operandi since the beginning,” Matt Odell, co-founder of FinalMessage.io, told New Money Review.
“I doubt we will ever see anything IOTA-related in a production vehicle.”
In 2017 IOTA announced it would partner with Microsoft to help monetise data from the internet of things.
IOTA argues its network will become safer as adoption levels increase.
“The more transactions which occur, the more secure the network becomes,” the IOTA foundation says on its blog.
IOTA’s tokens in issue have a collective value of $860m, placing the network 16th in a ranking of cryptocurrency tokens by size, according to data from cryptocompare.com. Bitcoin, the largest network, has a value of $92.4bn, over 100 times larger than IOTA.
The price of an IOTA token jumped by 16 percent in value to $0.312 following the release of news of the Jaguar Land Rover tie-up. The price remains nearly 95 percent below an all-time high of $5.69, recorded in December 2017.
The share price of Indian conglomerate Tata Motors, the owner of Jaguar Land Rover, has fallen 37 percent in the last year.
In February, Tata Motors posted the biggest-ever quarterly loss in Indian corporate history, about £3.1bn, triggered by falling Chinese demand for Jaguar Land Rover’s cars.
“This new fine-granular sharing economy has profound implications”
The IOTA/Jaguar Land Rover tie-up indicates continuing interest in single-enterprise or single-sector token networks. Facebook is rumoured to be introducing its own payment coin for use by the users of its three messaging networks. Various banks are also launching in-house payment tokens to help overcome obsolete technology.
In addition to helping drivers, IOTA says it has broader ambitions—to restructure economic activity on a more sustainable basis.
“This new fine-granular sharing economy has profound implications for business models and ownership itself,” the IOTA foundation says.
“Individuals and machines pay for exactly what they consume, when they consume it. [This] incentivizes manufacturers to construct products that last and are easily recyclable. IOTA plans to make planned obsolescence obsolete. The result of this is entirely new value chains and a more sustainable supply chain and accompanying economy.”
Sign up here for New Money Review’s monthly content updates