The Machine Economy offers us a tantalizing future, says Till Wendler , co-founder of peaq . Like when you are driving your electric car, the vehicle will not only find you a free space, but pay with its own wallet , ready for when you roll up.
From tiny devices to robots and drones, machines will drive 70% of GDP growth in the global economy between now and 2030, according to PwC . The number of connected devices, known collectively as the Internet of Things (IoT), is quickly growing . Interconnected machines are taking over more functions across industries and in our daily lives. The machine economy of things
The next stage of evolution for this interconnectedness is the Economy of Things (EoT). This is the point where machines’ economic agency rises to match their functionality – and blockchain offers the EoT the perfect home.
For example: In the IoT, a smart electric vehicle can monitor upcoming charging stations on its route and alert the driver if a space is free. In the EoT, the smart electric vehicle will provide the same alert to its owner, while also accessing its own digital wallet to pay for the charge… At least after it has jumped through all the hoops and loops associated with how fragmented the charging industry is, with suppliers preferring to provide services through their own designated apps.
Blockchain and other Web3 technologies are the perfect solution for that. They offer the EoT a neutral digital infrastructure alleviating a wide array of Web2 woes, from data privacy concerns to interoperability. In a Web3 Economy of Things, the connected electronic vehicle will pay directly to the digital wallet of the charging station, without the need for centralized financial intermediaries.
To achieve this vision, we need to turn to decentralized finance, or DeFi . Built on the blockchain, DeFi removes the need for middlemen from essential financial processes. It does this through the use of smart contracts written in computer code. It offers decentralized alternatives to traditional financial services, such as lending, borrowing, investing, and trading. While the total value locked (TVL) across DeFi protocols has plummeted amid the larger macroeconomic strain, a Web3 EoT is its best shot for a recovery. Decentralized protocols, identities, and tokens
DeFi empowers people to choose how to leverage their assets without any input (or significant fees) from intermediaries. The Web3 machine economy aims to give people this same freedom when it comes to machines. It’s widely appreciated that the machine economy must be based on the blockchain in order to be decentralized and fair.
Permissionless blockchains provide the decentralized infrastructure needed for us to transfer assets and data with near-instant settlement and with high standards of security . Built on top of this, DeFi’s many services offer the necessary technology to build the marketplaces for machines to exchange value and services on. Cryptocurrencies themselves can act as the lifeblood of this system. All of these are essential components of the Web3 Economy of Things. The machine economy: Other innovations
Many other Web3 innovations can add new value to the EoT. One example is the use of ‘self-sovereign identities’ (SSIs). These are tools designed to give internet users a portable identity which gives them complete control over their digital identities and any data they generate on the internet.
SSIs also have the potential to provide machines with unique identities that will enable a range of different capabilities. We call this concept Self-Sovereign Machine Identities (SSMIs), which serve as a global machine passport.
SSMIs are the digital identities we assign to machines and devices which identify themselves to people and to one another and to applications and dApps. We’ve seen in the past how Big Tech companies can collect all of our data to sell and turn a profit. This is with little recourse for individual users on their platforms.
Giving machines their own SSMIs allows them to communicate seamlessly with each other without the need for these intermediaries, thereby protecting our data from centralized entities. This in turn allows our machines to manage and share data and value faster, more freely, securely, transparently, and at a lower cost. The role of NFTs in DeFi
Another DeFi innovation is also proving to have applications in the machine economy is that of NFTs (non fungible tokens). NFTs are unique digital assets that act as tokenized versions of items with real worldvalue. The holder of an NFT has a digital, verifiable record of their ownership on the blockchain. Expanding on this, […]
source The Machine Economy Will Save DeFi – Because What is Coming Using Both is Just So Damn Cool
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