Machines that pay each other using digital wallets
People use digital wallets such as Venmo and PayPal and, more recently, cryptocurrencies such as bitcoins to make frictionless payments, peer to peer. What if machines could use digital wallets to make frictionless payments, machine to machine?
Autonomous vehicles — such as cars, fork lifts, trucks or any industrial machine — could pay for their own energy or fuel, maintenance and insurance. Moreover, in a shared economy, vehicles (or industrial machines) could earn money by renting themselves to other machines and being paid by those machines based on usage.
Although cryptocurrency payments between people and organizations have been powered by distributed ledger technologies (DLTs) such as Ethereum Blockchain, these distributed ledger technologies are not suitable for machine-to-machine (M2M) transactions because M2M transactions happen much more frequently, and these distributed ledger platforms carry transaction fees. Moreover, M2M transactions have high data volumes, have very low resource requirements and demand low latency.
An electric vehicle that pays for its energy
At DXC Labs, we are exploring no-fee M2M micropayments with a solution that uses IOTA. We built a smart, decentralized solution to show how electric vehicles can make fast, secure, frictionless payments to charging stations — and power up the future of the M2M economy.
In our smart charging station solution, a prototype electric vehicle plugs into a charging station. The electric vehicle and the charging station each have their own digital wallet. Payments between these wallets happen automatically after the vehicle is fully charged. A smart meter tracks usage for calculating payments, which are made with IOTA’s cryptocurrency, MIOTA. Our electric vehicle can also pay for its maintenance and insurance via M2M transactions.
IOTA is based on a new distributed ledger technology called the Tangle. An emerging technology being developed by the open source community, IOTA is a no-fee transaction and payment settlement platform. It is highly scalable, provides secure data transfer, is quantum immune (secure against quantum computer attack), and is designed for the low network resource requirements common in many machines. With IOTA, we are able to distribute and synchronize ledgers of data and money in secure, decentralized environments.