If you thought about an IoT collaboration, a bank might not be the first type of business that springs to mind. However, today the IOTA Foundation announced it is collaborating with DNB ASA, Norway’s largest financial services group.
IOTA is the leading brand for the Internet of Things (IoT) in the blockchain space. Though IOTA is not a blockchain, technically it’s a type of distributed ledger technology (DLT) called a ‘Tangle’ or ‘DAG’. The non-profit is based in Germany and has inked several collaborations across numerous sectors.
It has a top ten cryptocurrency which has a market capitalization of more than $5 billion today. Many blockchains and DLTs are immature. However, feedback to Ledger Insights by people experimenting with IOTA is that it’s more immature than others.
There have also been some highly publicized technical issues, for example, relating to cryptography. There are industry standard cryptographic algorithms widely used for securing computers, data, and the internet.
Using your own ‘innovative’ cryptography is generally not a good idea and frowned upon. That’s unless it’s been around for years and hundreds or thousands of experts have tested it and tried to break it. Because you think it’s great doesn’t mean it is. IOTA decided to use its own cryptographic algorithms. Surprise, surprise they were flawed.
IoT blockchain activity
Two sectors that are active in blockchain that are particularly interested in IoT are insurance and supply chain. For ‘parametric’ insurance, connected sensors enable automatic payouts for broken windscreens or weather events. There’s no need to make a claim. The supply chain application is more obvious, to track goods in transit.
The reason why blockchain is so appealing is because of the fear of ‘big brother’ watching all these devices communicating with each other. A distributed ledger replaces the need for a trusted third party.
Why collaborate with a bank?
DNB has experience with blockchain via the R3 banking consortium. Working with IOTA is its first foray into a public permissionless DLT.
The DNB-IOTA announcement sounds like a low-key collaboration. The Memorandum of Understanding is to collaborate on exploring innovations with IOTA’s technology.
IOTA has a data marketplace. Millions of people could connect weather sensors and when someone uses their data get paid a tiny amount. It’s these sorts of micropayments that interest DNB.
Lasse Meholm, Head of DLT at DNB said: “As Internet of Things (IoT) and Machine to Machine (M2M) communication and payment for microservices seem to escalate in the future, we think engaging in a Distributed Ledger based technology like IOTA gives us valuable experience and know-how on future revenue streams and business models. We are looking forward to dive into the IOTA space”.