The newest member in the decentralized currency family namely IOTA is one that embraces the future like none before. It seems to have solved important issues of the current front runner Bitcoin such as unlimited scalability and the elimination of transaction fees which constraints its feasibility of high volume micro transactions required in many future visions associated with the internet of things (IoT) and shared economies. The evolution away from the blockchain where each block must be verified by miners to IOTA’s tangle is revolutionary and forward looking with its superior security to any of its counterparts due to the integrated quantum resistance algorithm. When I think about IOTA, the person who always comes to my mind first is Elon Musk, not because he has a stake in the IOTA project but because it might be him who is transforming the world into a place where IOTA will play an important role, especially in the energy markets. In a perfect world, people are able to produce electricity to power their households and cars, store unused power in efficient batteries to be consumed when production levels are low and preferably feed the grid with excess energy in order to help meeting the energy demands not only of private households but industries as well. This is where IOTA’s full potential comes into play by facilitating the sale of electricity effectively bypassing energy companies as middlemen and ensuring instantaneous payment for each kWh delivered. While IOTA and Bitcoin both are P2P transaction enabler, when it comes to the machine economy and machine to machine (M2M) transactions, IOTA benefits of its unlimited scalability and non-existent transaction fees since billions of machines could easily create trillions of micro transactions per day. An interesting question that immediately seems to point out a critical flaw of this vision is: who owns the electric grid, and what effect would those M2M transactions have on them? Nowadays the electric grid is owned by various profit oriented entities ranging from generator operators to transmission owners and system operators but in the future the grid may become “economically independent”. The grid itself would make decisions based on real-time information about repairs and accumulate retained earnings to expand its reach and ideally maximize the good it can do to society instead of its owner profit.
It may not be tomorrow or in the next couple of years, but eventually people like Elon Musk will give people all the tools they need to become energy independent and IOTA with its ecosystem will play a key role in changing the ways societies function. Successful firms like Uber and Airbnb showcase that decentralization is not just a trend but a logical step towards a sustainable future and I am optimistic that machine economies are becoming reality sooner than we expect and for what it is worth, we better get ready!