Create the Economy of Things By Banking The Unbanked IoT

Bank­ing the Unbanked always refers to human beings and their enable­ment to par­tic­i­pate in the glob­al finan­cial sys­tem by pro­vid­ing them with bank accounts. In this post, I sug­gest cre­at­ing the Econ­o­my of Things by bank­ing the unbanked IoT — i.e. machines, devices, and tools with­in the Inter­net of Things IoT.

Glob­al­iza­tion has made our world a small­er place: through the inter­net, we know every­thing that hap­pens some­where with­in min­utes, through air trav­el we can per­son­al­ly expe­ri­ence the other side of the world with­in hours. We, in this case, means the rich world. The major­i­ty of peo­ple, how­ev­er, may have access to the inter­net but is far from being able to trav­el around the world. How­ev­er, there are other means of enabling them to par­tic­i­pate in and get a fair share of glob­al­iza­tion — by bank­ing them; i.e. by pro­vid­ing peo­ple with­out access to the finan­cial sys­tem with either prop­er bank accounts, or with alter­na­tive means of pay­ment, such as the Libra project that Face­book has announced this summer.

This idea orig­i­nates from my col­league with Bosch, Nik Schar­mann, who leads the Econ­o­my of Things project, and from a Datarel­la project in the field of bank­ing. As so often, evo­lu­tion­ary devel­op­ment is the result of com­bin­ing ideas from dif­fer­ent indus­tries, — or — a “cross-sectoral” approach.

Machine-to-Machine Trans­ac­tions

Hav­ing been active in the field of machine-to-machine com­mu­ni­ca­tion (M2M) for quite a time, and work­ing in sev­er­al projects includ­ing machine-to-machine trans­ac­tions, such as pric­ing nego­ti­a­tions and set­tle­ments between machines auto­mat­ed by smart con­tracts, I‘d like to point out the huge impact bank­ing the unbanked IoT will have on the glob­al econ­o­my. As Julian Simon claimed in his )con­tro­ver­sial) the­sis to the „Ulti­mate Resource“ (The “ulti­mate resource” is not any par­tic­u­lar phys­i­cal object but the capac­i­ty for humans to invent and adapt), that there is no resource cri­sis since when a par­tic­u­lar resource becomes more scarce, its price rises. This price rise cre­ates an incen­tive for peo­ple to dis­cov­er more of the resource, ration and recy­cle it, and even­tu­al­ly, devel­op substitutes.

Trans­ac­tion Costs Minimized

And as Ronald Coase defined and described trans­ac­tion costs in his „The Nature of the Firm“: the lower the costs of orga­niz­ing and the slow­er these costs rise with an increase in the num­ber of trans­ac­tions, the less like­ly the human being is prone to erro­neous behav­ior and the small­er the increase in human errors with an increase in the num­ber of transactions.

The ulti­mate mod­ern way of bring­ing down trans­ac­tion costs is to have machines man­ag­ing all trans­ac­tions, with­out any inter­fer­ence of human error. That said, the Econ­o­my of Things EoT will most prob­a­bly be the best descrip­tion of our future glob­al econ­o­my, with inter­con­nect­ed devices man­ag­ing all eco­nom­ic hag­gling, nego­ti­a­tion, and set­tle­ments — even dis­putes will be han­dled by machines, sup­port­ed by auto­mat­ed dis­pute res­o­lu­tion pro­ce­dures, such as smart contract-based arbi­tra­tion.

Devel­op­ment Of World Pop­u­la­tions vs Con­nect­ed Devices

Let­ting devices, machines, or things par­tic­i­pate in eco­nom­ic trans­ac­tions can be described as Bank­ing the Unbanked IoT. From the per­spec­tive of the actu­al­ly acces­si­ble install base and future growth, the eco­nom­ic impact of bank­ing unbanked peo­ple is neg­li­gi­ble com­pared with the impact of bank­ing unbanked devices, as can be seen in the two charts above and below:

Cre­ate the Econ­o­my of Things By Bank­ing The Unbanked IoT

Look­ing at Facebook‘s Libra project and com­par­ing its eco­nom­ic impact with Bank­ing the Unbanked IoT described here, we can con­clude that it makes much eco­nom­ic sense to work on the future Econ­o­my of Things. In my next post I will elab­o­rate more on our plans with Datarel­la of being an active part of this fas­ci­nat­ing jour­ney togeth­er with our great part­ners in the field of mobil­i­ty infra­struc­tures. And I will explain, why and how my Enter­prise Evo­lu­tion Pro­to­col model is a good frame­work for build­ing a sus­tain­able, eth­i­cal Econ­o­my of Things.

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GOOD READS

The Mind­ful Rev­o­lu­tion, Michael Reuter

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The Great Men­tal Mod­els II, Shane Parrish

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The Secret Lan­guage of Cells, Jon Lieff

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Grasp: The Sci­ence Trans­form­ing How We Learn, San­jay Sarma

Essen Ändert Alles, Hol­ger Stromberg

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The Oxy­gen Advan­tage, Patrick McKeown

Rewire Your Brain , John B. Arden

The Way of the Ice­man, Koen de Jong

Soft Wired — How The New Sci­ence of Brain Plas­tic­i­ty Can Change Your Life, Michael Merzenich

The Brain That Changes Itself, Nor­man Doidge

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What Does­n’t Kill Us, Scott Carney

Suc­cess­ful Aging, Daniel Levithin

The Body Builders, Adam Piore

Der Ernährungskom­pass, Bas Kast

The Way We Eat Now, Bee Wilson

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Denken: Wie das Gehirn Bewusst­sein schafft, Stanis­las Dehaene

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100 Plus: How The Com­ing Age of Longevi­ty Will Change Every­thing, Sonia Arrison

Think­ing Like A Plant, Craig Holdredge

Die Glück­shy­pothese, Jonathan Haidt

Mind Over Med­i­cine, Lissa Rankin

Das Geheime Wis­sen unser­er Zellen, Son­dra Barret

The Code of the Extra­or­di­nary Mind, Vishen Lakhiani

Alt wer­den ohne alt zu sein, Rudi Westendorp

Altered Traits, Daniel Cole­man, Richard Davidson

The Brain’s Way Of Heal­ing, Nor­man Doidge

The Last Best Cure, Donna Jack­son Nakazawa

The Hour Between Dog and Wolf: Risk-taking, Gut Feel­ings and the Biol­o­gy of Boom and Bust, John Coates

The Inner Game of Ten­nis, W. Tim­o­thy Gallway

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Sleep — Schlafen wie die Profis, Nick Littlehales

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