Translated article from Belgian business and economics newspaper De Tijd, May 22nd 2018
A Dubai-based subsidiary of the Flemish blockchain company SettleMint has already raised 4 million dollars with the sale of digital tokens, an amount that could still rise. The tokens will become the payment method on DataBroker DAO, an online marketplace for the trade in sensor data.
You don’t see them, but within a few years they will populate our globe with tens of billions: the tiny digital sensors that are built into all kinds of objects and buildings, and that transmit their data via the internet or other specialized networks. With these data, organizations can gather insights and thus improve their services. Just think of sensor networks with which we can predict the weather more accurately, or that allow us to manage traffic in real time in order to combat traffic jams.
Because a lot of third parties can be interested in this information as well, a flourishing trade has already emerged in sensor data in recent years. According to estimates, this market was worth more than 600 billion dollars in 2016 and will double that amount by 2019.
Marketplace on blockchain
Leuven-based start-up SettleMint responds to that trade with blockchain technology. The company developed the online marketplace DataBroker DAO, which brings sellers and buyers of sensor data into contact with each other. Transactions on their marketplace will not be settled with traditional currencies, but with a specially created ‘token’, a digital payment method. It is called DTX (short for DaTa eXchange), and it is a derivative of the better known crypto coin Ethereum (ETH).
One token corresponds to the average value of the data that a sensor produces during one week. A total of 225 million tokens are created, which corresponds to the expected number of sensors that will be connected to DataBroker DAO in the year 2024. The trade via the platform will amount to around 2.5 billion dollars in that year, the initiators think.
Almost half of the tokens (48 percent, or 108 million) are currently being sold publicly to interested parties. A token costs 0.00025 ETH, which at the current rate of the Ethereum corresponds to about 18 dollar cents.
If all tokens were to be sold, that would yield around 19 million dollars. Although it seems unlikely that the maximum amount will be met. The sales process runs for a month, until next Saturday, and over a quarter of the available tokens have already been sold, accounting for around 4 million dollars.
“In any case, we have already achieved our objective”, says Roderik van der Veer, co-founder of SettleMint and the technical brain behind DataBroker DAO. “At this stage of the project we focused on a limited number of strategic sectors, so we are very happy with this result.”
Data Broker DAO is trying to persuade large telecom operators, amongst others, to sell certain sensor data on the platform. “Many are considering it because it can be an extra source of income for them, but it takes some time to record this contractually”, says Van der Veer, who hopes that those big operators will in turn convince their own business customers to use the platform.
On the demand side, Van der Veer sees a wide range of interested parties, “from academics and the government to every start-up that is engaged in artificial intelligence and big data. Moreover, the platform will not only be able to trade raw data, but also complete datasets that have already been processed by other parties.”
Trading on DataBroker DAO starts at the end of this month. From then on, organizations that want to buy data on this platform will also be able to purchase tokens — which they can pay in classic currency. DataBroker DAO itself takes a ten percent commission on each transaction.
The sale of digital coins and tokens is experiencing explosive growth worldwide, but it is an economy that remains largely under the radar of the media and the classic banking and stock exchange world. According to data from the Estonian marketplace Funderbeam, digital coins worth 2.6 billion dollars were issued last year, eleven times more than in 2016. The largest operations were for the US start-ups Tezos (platform for smart contracts) and Filecoin (decentralized data storage), each of which raised more than $ 200 million.
“We have paid a great deal of attention to complying with regulationsworldwide, also with the Belgian financial regulator FSMA”, says Van der Veer. The reason why DataBroker DAO was established in Dubai is partly due to the fact that the Gulf State offers more legal certainty for the issuance of digital coins, just as countries like Switzerland, Malta and Estonia. “What’s more, Dubai was interesting because it is easy to get in touch with important customers.”
Wim De Preter
News manager Tech & Media