IOTA Co-Founder Admits Blockchain's Credibility Crisis, Pivots Away from Europe to MENA and Africa

In the 2010s, IOTA was one of the most exciting European startups in blockchain tech

IOTA, a distributed ledger technology (DLT) project founded in 2015, began its journey with the goal of facilitating transactions within the Internet of Things (IoT) ecosystem. However, as Dominik Schiener, IOTA co-founder and IOTA foundation chairperson, reveals in an interview with Tech.eu, the company's focus has shifted over the years. Schiener now considers industrial IoT to be "adjacent" rather than central to IOTA's mission.

Instead, the IOTA foundation is pivoting towards higher-level ecosystem creation projects that encompass trade, digital identity, and asset organization. Schiener points out the challenges encountered in transitioning industrial blockchain use cases from successful pilots to commercial applications.

According to Schiener, the problem lies not with the technology itself but with the lack of economic use cases. He cites the example of equipping cars with wallets to enable machine-to-machine trading, an idea that makes sense conceptually but faces difficulties in practical implementation.

Along with the challenges of integrating blockchain into IoT devices, the COVID-19 pandemic also led to reduced original equipment manufacturer (OEM) investment in emerging technologies such as IOTA. As a result, many innovation projects faced cancellation. Schiener acknowledges that blockchain was initially seeking problems to solve, a situation that has yet to be fully resolved despite advances in artificial intelligence (AI).

While Schiener admits to being "sometimes ashamed" to identify himself as an entrepreneur in the blockchain space due to its credibility problems, he emphasizes IOTA's efforts to showcase real-world use cases and dispel the notion of blockchain being used solely for launching new coins and quick enrichment schemes.

Schiener also expresses skepticism towards consortium structures like GAIA-X and moveID, which aim to establish a foundation for the future of data infrastructure in Europe. He believes that the high failure rate and lack of substantial results from these projects make him personally inclined to distance himself from them.

Over the last few years, the IOTA foundation has shifted its focus from Europe to regions such as Africa, the Middle East, and the UK, as part of a broader strategy to establish itself as a global digital infrastructure and innovation ecosystem.

This pivot is driven by Schiener's observation that over-regulation and a slow pace of innovation in Europe have hindered the foundation's efforts. He notes that a quarter of the costs in some innovation groups were earmarked for grant compliance, rendering innovation at that level impractical.

In contrast, Schiener highlights the better support and faster adoption of emerging technologies in other regions. He points to pilot projects in Kenya, where IOTA's Trade Logistics Pipeline (TLIP) platform is being used to streamline cross-border trade operations for flower exports, tea exports to the UK, fish exports to Belgium, and textile exports to the US.

Another pilot project in the UK involves Mobius Technology, which is utilizing IOTA's TLIP to manage chilled poultry shipments. Schiener expresses fondness for the UK, stating that they are "standing up to Europe."

In July this year, the IOTA Foundation also launched the I3-Lab at Imperial College London, a research facility dedicated to the circular economy. The lab aims to advance the circular economy through the development and application of digital tools.

Despite the foundation's focus on new regions, IOTA hasn't completely left Europe. It recently announced a partnership with Eviden and the launch of the Eviden Digital Passport solution (EDPS), which is powered by IOTA technology. The passport integrates IOTA's open-source, scalable and regulatory-compliant DLT and is a part of the EU's broader circular economy action plan.

Similar to battery passports that verify the provenance, chemistry, and identity of batteries and measure their environmental impact without risk of data tampering, the EDPS can be used across various industries, such as manufacturing, fashion and textiles, and food and beverages.

In late 2023, the IOTA foundation also launched the IOTA Ecosystem DLT Foundation in Abu Dhabi as part of broader efforts to digitise global trade and make trade finance solutions more accessible. The Foundation recently released a Shariah-compliant token.

While partnerships fueled by substantial contributions from foundations like IOTA can catalyse innovation, they differ significantly from traditional commercial ventures.

For instance, the IOTA Foundation invested $1.2 million in Imperial College London's lab and committed $100 million in IOTA tokens to the Abu Dhabi initiative, with plans for additional investments. Does such financial backing equate to the same level of legitimacy or commercial value as a traditional business partnership, or is it simply IOTA giving something back?

Let's face it: there's no shortage of IoT pilots and R&D efforts. Are we going full circle? Further, many companies, including Circularise, Circulor, and Everledger are already heavily embedded in digital product passports and circularity.

Schiener attributes IOTA's securement of these government partnerships in new

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