What the PoC is about
IOTA enables the way for a machine economy. In a perfect machine economy machine-to-machine payments are possible. This will become more and more important when the number of autonomous machines and vehicles working together increase. Which steps have to be realized to reach this goal?
Let’s take a look on production: Nowadays machine shops are organized along the needs of production flow. Lean production techniques focus on the reduction of waste and concentrate the process on value adding. But the value added and the costs of each operation are still not really transparent. The reason is that financial accounting and machine operations are usually devided.
To realize true machine-to-machine payments, all production steps need to be able to charge a certain amount of money.
Pay-on-Production / Pay-per-Use Business models
Recent developments in payment and business models for machines which are used for production can be an important milestone for reaching a machine economy. These models are called Pay-on-Production (PoP) or Pay-per-Use. In these business models every production step will be charged to the customer.
In the domain of manufacturing but also for medical equipment these models are already successfully introduced into the market and will certainly become more popular. Usually the machine producer installs the machine at the client’s site and than charges per use. Reasons for this model from a client’s perspective are a lower upfront capital investment and that the people who actually developed and produced the machine will keep an eye on maintenance and equipment optimization.
The following link gives an example of a PoP model for compressed air.
By realizing these models the basic requirements for a machine economy, where machines pay machines, are fulfilled. Hence an efficient payment model has to be found, which enables the machine itself to charge for every piece of production.
Pay-on-Production realized with IOTA
Current PoP models are realized with the machine counting the number of pieces produced. The customer will be charged on this basis at the end of the month in the agreed currency.
In our eyes IOTA delivers exactly the right characteristics to improve this model: micro payments, data integrity and no transaction costs.
Our aim is to create a true Pay-on-Production model, where payments are done for every production step. In order to achieve this we will use our own machines, which will be described below.
Preview on PoC realization
Our machines are able to produce and place huge sand filled geotextile tubes as flood barriers directly onsite. Some people describe these tubes as “large, endless sandbags”. Besides being really quick in laying these tubes, which makes the method interesting for quick reaction forces, there are good reasons for the main application which is constructing embankments, dams and levees: there are no erosion processes (safety effect) and a higher stability (reduces space and material needed: cost effect). Our developed machines are technologically world wide unique and asked for a variety of constructions.
For the PoC realization two of our machines can be used. Both machines are introduced in the linked description of our company and our IOTA project Team.
Payments with IOTA
The IOTA token transfer is illustrated in the following picture. Three wallets are involved, the ownership is given and there is a description who has access to the wallet. The wallet 1, the machine wallet, is funded by the customer, based on his plans for the next production period.This can be e.g. the amount for one day of production.
The machine has full access to wallet 1 and is monitoring its funding. An algorithm will be implemented for the transfer of IOTA token after “one meter produced” to wallet 2. The transfer will be done right after the meter is produced and while the machine is still in operation. Every coin transfered to wallet 2 by following this systematic is truly earned and belongs to the machine owner (in this case: topocare). The machine will lock down, if the funding on its wallet is depleted.
If any amount of tokens remains in wallet 1 after the agreed production period has ended, the customer will be refunded with this amount.
To ensure that the token transfer is done when the meter of tube is really produced, machine parameters will be monitored. These data, which is the basis for the payment, will be attached to the tangle to increase visibility and controllability. There are different sensors for production monitoring, which can be used. The following picture gives an overview about three possible sensors.
Within the project a decision will be made about which sensors to take, to ensure the data reflects the true production process. This can be a data set of different sensors, to detect mistakes in the data and chose the right value.
To write the data into the tangle has two benefits:
- Customer: Access can be given to the customer to disclose the data basis which results into the payments. The customer can be sure about the fact that there is no manipulation, because he can directly compare the data to the real production process.
- Machine owner: The fact, that the data is directly inserted to the tangle makes the process tamper-proof. This is important, because the machine is operated at the customers site and there is no other way of proof. Also the data can be used for other purposes, such as maintenance and machine improvements.
One important point to ensure that the production results meet their requirements, is that the right production material is used.
In the case of our machines this is the textile and the filling. We want to integrate this proof prototypically in the monitoring process. The textile needs to be marked with an unique ID, which gives the chance to trace its origin back to the supplier.
In this way, we hope to be able to prove that the right textile has been used by giving the chance of tracking the following chain: supplier — production — product.
Use of Outcome
The outcome of the PoC will be published open source and free to use. It can be used in a number of different cases. The production step defined to charge the customer could also be a welding spot, a bending operation and so on.
Here are just some ideas:
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Beyond production, there are a number of other possible applications. Two examples: