Modelling New Business Models with IOTA

The full article was originally published by Jan Pauseback on Medium. Read the full article here.

People often ask me what Blockchain or Distributed Ledger Technology is. As a technical analyst, it is part of my job to explain it to them. However some technologies are extremely difficult to explain in a simple fashion.

DLT or Distributed Ledger Technology is one of those cases. Even for people with a software engineering or computer science background, it is sometimes difficult to understand the technology itself, and more so the implications for current and future business models.

Sometimes it really helps to show how it all fits together..

Inspired by Volkswagen@CEBIT

..something like Volkswagen’s miniature world showcase at CEBIT this year, which demonstrated how IOTA may be used in different automotive use cases, such as:

  • Vehicle identification. Allowing a vehicle to identify itself to parking garages, smart home systems, other vehicles, etc.
  • Over the air updates. Allowing verification that the software running in your car is correct and up-to-date.
  • Function on demand. Allowing payments to upgrade your car with features such as higher maximum speed or extended range.
  • Autonomous vehicles that earn money. Allowing autonomous vehicles to act as fee-earning taxis when not used by their owners.
  • Payment for tolls and EV charging. Allowing automatic, transparent and frictionless payment.

When I first saw the Volkswagen showcase I was taken aback, as were many others. This approach actually made people understand the implications of the machine-to-machine economy vision of IOTA.

Showcasing IOTA’s vision with the EV3

We saw that physical demonstrations help people to understand the vision. So how could we as a foundation model our vision? With Lego!

Many people have childhood memories of building their dreams with Lego. So we wanted to see if we too could build our dreams with it. Lego EV3 is a computing device / platform with which you can build programmable robots. Since its release in 2013, people have implemented some sophisticated applications on the platform.

In this project we installed ev3dev, a Debian-based operating system, on our EV3 and ran a simple shell script. This script checks whether the balance on a specific IOTA address has increased, indicating that someone paid the truck. If the funds on the address increase, then the truck starts its engine and drives for a set amount of time: 1Ki equals one second of driving. Below you can see the car start driving when money is sent to the right address.

To summarize: We built a toy truck that drives only when it gets paid and stops when it ‘runs out of money’. That is the most basic use case but it already has real world relevance. With this simple example it becomes clear that IOTA:

  • Decreases complexity. There are no middle men involved. Only you and the truck.
  • Has no transaction fees. What you send is what the truck receives.
  • Simplifies cross-country payments. No need to deal with foreign currencies any more.
  • Can enforce sanctions in case of a default. The truck will only drive as long as you are paying for it [1].

These features even today, could help to reduce fraud, reduce risks and reduce costs.

We believe that by bringing together IOTA and such elegant and familiar modelling tools, we can make our new technology more approachable, and help people to understand its possibilities and implications.

The next step could be towards supply chain tracking, eg by putting a Bosch XDK ( into a toy shipping container, and using the recently published xdk2mam ( code to stream environmental data to the Tangle. Furthermore one could let the shipping container pay the truck to start driving, which would bring this miniature world showcase even closer to IOTA’s vision of a machine-to-machine economy.

There is a whole world yet to be built from these components. So that everyone can see what the future will look like!

If you want to build this future together with us, then apply for our tech analyst positions! We are hiring! (

Please note:

IOTA does not have any partnership with LEGO to support this development. Other similar toys with embedded electronics can potentially be used for these demonstrations.

[1] In Brazil “… all new vehicles manufactured or imported to the country are required to be equipped with an electronic device enabling tracking and immobilization of the vehicle if stolen.” (

The full article was originally published by Jan Pauseback on Medium, where people are continuing the conversation by highlighting and responding to this story. Read the full article here.

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