Can FinTech Benefit From The Things Network Initiative?
Article originally posted on Fintechist.com
Crowdsourcing is becoming a new trend these days, as both communities and business see the added value of cutting out the middleman. Whenever funds need to be raised, it should be raised by the people close to the project. Waiting for government officials to attribute funding to these projects can take months, if not years, which is no longer a viable option.
Meet The Things Network
Even large cities such as Amsterdam — in The Netherlands, not the US — are facing internet connectivity issues. While it may seem normal for every city to have some “dead areas” regarding connectivity, there is an easy solution to this problem. Consumer Wi-Fi electronics will not be sufficient to improve overall wireless connectivity, though.
Innovative ideas are often born out of frustration, especially when a group of like-minded people come together to tackle a common goal. This is how The Things Network was conceived, as a few bright minds came together to solve Amsterdam’s wireless internet connectivity issue.
Data connectivity through mobile is very expensive, and companies have to invest tons of money to upgrade speeds and connectivity. For example, mobile provider Mobistar had to invest 600 million EUR to bring 4G connectivity to Belgium. Keeping in mind how much larger The Netherlands is regarding surface, costs were exponentially higher than that.
After crowdsourcing an “Internet of Things” mobile data network in Amsterdam, wireless connectivity will improve dramatically. The Internet of Things is an intriguing concept regarding connecting things to the Internet. Bluetooth is, by definition, not Internet of Things enabled, as all it does is create a hub to connect local devices. Furthermore, Bluetooth connectivity does not extend beyond the borders of your own home.
Due to all of these imperfections and invisible walls, the Zero Friction World seemed to be a utopia. Until four months ago, when LoRa was discovered. LoRa supports a long range for internet signals and requires little battery power to operate. By harnessing the power of LoRa technology, connectivity for up to 100,000 devices in a 5km range can be achieved, at the price of 1,000 EUR. Combining the low bandwidth requirement with the lower operational costs make LoRa a perfect solution for The Things Network.
The Things Gateway Kickstarter Campaign
Making the entire network decentralized can be done by contributing to this network in the form of a LoRa device. The Things Network is hosting a crowdfunding campaign for network equipment, infrastructure and the software to make the network work on a larger scale. Building an open source community was the right way to go, after attending an Internet of Things meetup in Amsterdam. Giving everybody access to the software used will open the door to innovation and improvements in the future.
Convincing the people of Amsterdam to build such a network is a different matter, though. This is an abstract concept relying on technology most consumers have never even dreamed about. Most people will even argue the need for this new technology although most of them will agree that improved wireless connectivity is always welcome.
The main goal is creating a global network, as the Amsterdam initiative was a testbed to see if this concept was even viable on a larger scale. It didn’t take long until this project took the world by storm, and with all of the sources and software being open source, launching local initiatives will be rather straightforward. So far, there has been a decent amount of interest from other international cities.
Hardware costs for LoRa devices are quite high, though, so a cheaper alternative had to be created while making the software even more consumer-friendly. A Kickstarter campaign was launched by The Things Network team, which offers a smaller-size hardware kit for the price of 200 EUR.
Through this Kickstarter campaign, our society comes one step closer to created a distributed, open-source, crowdsourced Internet of Things data network. The Things Gateway, as this hardware kit is called, has a range of up to 10 kilometers, and can serve up to 10,000 simultaneously connected nodes.
Impact On The FinTech Industry
Not only could The Things Network prove to be valuable for the Internet of Things movement, but the entireFinTech industry could reap the rewards from a global network as well. Depending on what type of innovation stems forth from the FinTech startups around the world, new devices might be created who use sensory input and output to process payments.
Furthermore, even though The Things Network is mostly aimed at providing internet connectivity for various types of devices, similar technology might be created which allows for smart mobile devices to connect to these networks as well. Imagine walking around in your city, and have free and open Internet access regardless of where you are.
Such a powerful tool would truly help the FinTech sector disrupt the financial ecosystem as we know it. Anyone would be able to send and receive payments through any device, as any piece of hardware can connect to the Internet at any given time.
Source: Crowdsourcing Week Europe 2015
