Learning about blockchain; starting with some ICO events

I’ve decided to dive deeper into blockchain and Etherium. Because I’m a transportation guy, I did a search for ICOs in the transportation space and came up with TrafficX, ZeroTraffic, and DOVU. I’ve ranked them from sucktastic to slightly silly.

TrafficX

TrafficX looks like a complete scam. I can’t see anything solid anywhere, and their development plan seems to say “Pay us a lot of Ether and we’ll hire some developers. Get in early!” Their initial offering has closed and they raised some money. If it isn’t a scam, we should see some results soon. If it is a scam, I guess the value of the ICO will eventually drop to zero.

ZeroTraffic

ZeroTraffic at least has people behind it who have been in the transportation space for years, but I think their idea is weak. From my read-it-once-through, not super-careful reading of their whitepaper, they are basically using their ICO to allow people to buy “deputy mayor of traffic” positions for their local areas. They will use the funds from their ICO to pay for further development of a website and apps for the gamification of traffic choices, and will use the (hopefully relevant and insightful) input of the local traffic mayors to get people to travel in off-peak times. In my opinion, this is a dumb idea, will not at all result in “Zero Traffic”, and is a bad investment on the part of the ICO investors. On the other hand, the team is honest about their idea, and will make a good faith effort to move the idea from concept to reality. This ICO certainly isn’t a scam.

DOVU

Finally, DOVU has big rhetoric but more prosaic (and achievable) goals. Their slogan is “Blockchain powered mobility”, but in their whitepaper it turns out they are just trying to monetize the sharing of traffic information. I get the feeling they were casting about for a good idea in the mobility space, and came up with this after several brainstorming sessions. But I also get the feeling that they have mostly computer scientists on their team, rather than transportation economists. They are correct that their technology will likely make it possible to monetize sharing data about one’s trips, but I think they are incorrect in their presumption that this information will have any intrinsic value.

This blind spot arises because we as a society are still transitioning from a world of scarce traffic information to one of plenty. Just ten years ago it would have been unthinkable for a transportation engineer to expect to have accurate, up to the minute estimates of travel times on city streets. Major highways have been well instrumented for decades using loop detectors, but even that data can be spotty and is notoriously bad at estimating speeds and travel times. In the early days of intelligent transportation systems (ITS) there were many business ideas floated based on the idea that specially instrumented probe vehicles with wireless data transponders could be used to collect traffic data. That travel data could then be sold to travelers who wished to know the latest and greatest traffic conditions and the best routes to their destination. Today it is possible to view current traffic conditions for both highways and the major surface streets, and services like Google maps will (for free) provide turn by turn navigation that includes advice about traffic incidents, the expected severity of traffic incidents, and whether a better alternative route exists.

(As an aside, I never believed any of that was necessary, and I wrote a paper back in 2002 in which I argued that regular people could just post traffic conditions on roads much like bloggers post reviews of restaurants. It was rejected even for presentation at TRB that year with a scathing review. I was pissed because the review was so obviously biased towards the current status quo (big top-down ITS projects), and so after that I just gave up on writing papers and publishing in transportation. Ironically, I also kinda described how Waze works with that paper, which would make me feel vindicated if I had gone on to found Waze and now had millions of dollars in the bank, but I didn’t and I don’t, so I’m just bitter instead!)

Anyway, back to the critique of DOVU, now that every vehicle with a cellphone is a traffic probe data collector, DOVU looks at that as an opportunity to “get paid to drive” by selling the information you collect. Unfortunately, I think they are unintentionally mixing up both the past and the present. In the past, traveler information was scarce and therefore valuable. Today, when every cellphone is broadcasting location data to the wireless provider, to the phone’s OS itself, and to any app that is running with permission to track location, traveler information is abundant, not scarce, and therefore is worth very little.

The downsides for DOVU are two-fold. First, even if DOVU operated in a vacuum, if everybody were to participate in their system, the basic rules of competitive markets dictate that marginal cost pricing will hold, and the marginal cost of one additional traveler’s information is next to zero. Second, DOVU does not and will not operate in a vacuum. It is trying to break into a space in which many players are already collecting a wealth of traveler information, with no way to force the current market players to use their system. There is nothing in the DOVU setup that will in any way prevent the many actors who are already gathering traveler information to continue to do so. All that information that is currently circulating without DOVU will continue to do so outside of the DOVU walled garden, keeping the same arrangement that providing that information is part of the cost of using a phone, getting turn by turn directions, and so on. DOVU participants will be competing to sell their traffic information with each other as well as with everybody outside of the DOVU ecosystem (who are basically giving their information away for free). Thus there will be next to zero benefit to any purchaser for any DOVU user’s travel data, and so the market clearing price of all this collected and monetized information will be zero.

To their credit, DOVU seems to be thinking about information beyond just travel times and speeds. In presentations and in the white paper, they imply accessing the vehicles’ information systems to gather data such as using windshield wipers, emergency braking activation and so on, and suggest that those secondary measurements can be used to reveal hidden truths such as weather conditions and traffic hazards. In practice, I don’t think so. We have weather stations for the former, Waze users for the latter. There might be some facet of travel that could be measured that might be interesting, but I doubt very much that anything would be valuable enough to satisfy DOVU’s implied promise that drivers could get paid to drive.

All those criticisms aside, I actually like their plan a little better than the ZeroTraffic idea. Whereas ZeroTraffic claims that they will solve traffic, DOVU sticks to the more prosaic claim that you can get paid to reveal your data. It could be in the future that cellphones will no longer report faithfully back to their corporate sponsors, perhaps because anonymous, blockchain-based payment systems have made it possible to conduct a phone conversation or data transaction without needing to keep tracking the mobile device. Or perhaps because some other bit of information will become as valuable as what DOVU believes transportation data bits are now. I’m not a fan of their tag line “blockchain powered mobility” as they do not directly provide mobility at all, but in the future DOVU could pivot based on an opportunity that presents itself and they could have a winning proposition. In contrast, ZeroTraffic is stuck on its path once it has sold its “deputy mayor of traffic” positions.

Me me me

My interests in applying blockchain techniques to transportation are based more in transportation economics than in engineering or computer science, and I haven’t yet seen anybody trying to implement my thoughts, so there’s still hope for my startup idea. Unfortunately, my idea will likely end up being an over-planned scheme like ZeroTraffic, and less a generic enabling technology like DOVU. Without giving anything away, I’m interested in dealing with that marginal cost pricing problem. I’m not going to blab about my ideas until I get more clue about blockchain and Etherium and all the other related tech. Maybe in a few months I’ll float my own ICO with my own team, and face my own round of critical blog posts pointing out how clueless my ideas are.

PS, If anybody from DOVU reads this and is interested in collaborating, shoot me a message and I’ll share more of my ideas. Or just recruit Professor John Polak from Imperial College London for your advisory board.

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