- IOTA Foundation
- Dominik Schiener is the cofounder of IOTA, a cryptocurrency that’s worth $5 billion and is designed for the internet of things.
- Schiener heads up the IOTA Foundation, which is trying to build out the IOTA network and ecosystem.
- Cryptocurrency markets have been swinging wildly in recent weeks, creating headaches for people trying to build businesses off the back of them.
- “You have to constantly adapt and change things,” Schiener said.
LONDON – How can you make plans for a business when you don’t know how much it has in the bank?
“Today it’s like $300-400 million or so – probably less so now,” says Dominik Schiener when I spoke to him on Monday.
Schiener is the chairman of the IOTA Foundation, the not-for-profit set up to develop the IOTA network. IOTA aims to be a cryptocurrency for the internet of things (think cars and petrol stations communicating with each other over the internet – that kind of thing). As machine-to-machine contact grows, IOTA wants to be the currency that powers their transactions.
When it launched in 2015, the project raised 1,300 bitcoins through an “initial coin offering”, a portion of which went to the foundation. IOTA’s crypto token, the MIOTA, is now the 11th biggest cryptocurrency, with $5 billion-worth in circulation.
The project has a significant war chest. But on Monday, as Schiener was speaking to Business Insider, that war chest was diminishing. Bitcoin tanked as much as 10%, taking the rest of the cryptocurrency market with it. That followed a whirlwind session on Friday that saw bitcoin dive 15% before rebounding to make gains later in the day.
“Me and David [Sønstebø, IOTA cofounder] always joke: we are really f—— good at freestyling this, because the crypto market is just too insane right?” Schiener, 22, said.
“You have to constantly adapt and change things because all of your assumptions are constantly being proved wrong. You just really have to be very agile and just move forward. We don’t make 12-month plans.”
Schiener has been in the crypto world since 2011 and has already lost it all once. He set up a cryptocurrency exchange in 2013 but said the business went under and he “ended up losing all my money” in a past crypto market crash.
“If there’s a huge market crash like over the last few days, you really have to revamp your strategy because you can’t make major investments,” he said. “For example, right now, we are really thinking about making a major investment in property to set up a kind of IOTA Lab. Now it’s: ‘Hey, does this even make sense now?’ You have to prioritise.”
Schiener said that the IOTA Foundation liquidates a portion of its bitcoin holdings each month so that it has “stable money that we can work with.”
“The best way to plan in this space is just to set your top priorities and really focus on those,” he said. “Then the other stuff is less important.”
IOTA’s 2018 plans
Schiener and his colleagues have spent the last few months setting up the IOTA Foundation, which is now a fully regulated German entity.
As for its current priorities, he said: “The first one is definitely to get the technology right, to get it to a stage where it’s production ready. That is kind of our main focus on 2018.
“The second thing is to really engage with the ecosystem, which means developers that build products. Apart from this community, we also have a big corporate ecosystem where we really focus with them on, hey, how can we introduce the technology to you and more importantly, how can we do projects together?”
Schiener said: “The stage that we’re at right now is we’re crossing over from doing proof of concepts to doing larger case studies like really out in the field. We’re working together with some bigger companies on a larger research project as well.”
IOTA has faced some criticism for the speed and capacity of its network. Schiener countered: “What we always say is everything is a proof of concept and we have been very blunt about this since the beginning of IOTA. We always say that IOTA is a beta product right now. In 2018, we want to make it production ready.
“The network being slow is really also us figuring out: how can we make the IOTA network very reliable? For us, the problem now is to close the gap between what research does – we have more than 10 mathematicians on board right now – and what engineering does. That’s exactly what we’re doing right now.”
‘100% of my net worth is in IOTA tokens’
MIOTA, the cryptocurrency that the foundation holds, hit a high of over $5 per token in early December but is now trading around $1.80.
“Right now, 100% of my net worth is in IOTA tokens,” Schiener said. “It may be good, it may be bad.”
We don’t want to be rich millionaires sipping some champagne and see IOTA fail
Neither he nor Sønstebø earns a salary from the IOTA Foundation and Schiener says they spent around $500,000 of their own money setting it up. (They were unable to access the crypto war chest until that was done.)
“Me and David are very entrepreneurial,” Shiener said. “We were just like: f— it, either we go all in or nothing right? For us, it’s very personal. We want to get s— done, we want to make this big. We’re the ones that are fully committed.
“We always said, this is an all or nothing situation for us. We don’t want to be rich millionaires sipping some champagne and see IOTA fail.”