Let’s say in the near future you’re the owner of a car that has the ability to gather reams of personal data every time you use it. It knows where you’ve gone, how long you’ve been there, what days you use the car, and how far you’re willing to drive to go to the movies or the mall. This data is valuable to marketers and researchers, and you’ve taken advantage of a blockchain-based system that lets you own that data and control who sees it.
Your insurance company is interested in how fast you drive. But the numbers are useless to them without knowing where you’ve driven. Were you doing 60 mph on a freeway or in a school zone? This is where the current system breaks down because verifying location depends on believing in the integrity of whoever—or whatever—is doing the measuring. Location is typically determined by GPS readings, and GPS is fairly easy to fool.
This is a problem that has preoccupied a segment of the blockchain community since at least 2016, when the subject was discussed at Ethereum’s DevCon 2 event. “Proof of location,” Ethereum developer Matthew Di Ferrante wrote in a Reddit post around that time, “is honestly one of the most difficult things to implement.”
San Diego-based XYO has developed a kind of workaround to solve this problem. “GPS can say ‘I’m at latitude x and longitude y,’ but it’s easy to make that say whatever you want it to say,” says Arie Trouw, the company’s cofounder and CEO. “But if someone can report that they were near another device, and that device can also report that it was near that person, that’s something with a lot more credibility.”
This “proof of proximity” concept is the crux of XYO. The idea is to forego “absolute data,” which relies on technological determinism—I’m at these coordinates because my GPS readings say I’m at these coordinates—with “relative data.” “If I take a selfie with you, I can prove I was somewhere with you,” Trouw says. “But to place that in the physical world, with a latitude and longitude—or even to say ‘I’m in New York right now’—I can assert that. But there was no way to prove that’s necessarily true.” Even if we’re both in, say, Times Square, Trouw explains, the “relevant data point” isn’t that claim, which is essentially unprovable, but rather that we are near each other.
The XYO Network is built around “sentinels” that witness these transactions and set into motion a chain of verification tools that prove their truth value.
XYO exploits a singular characteristic of location data. Typically, when we measure something, it is a one-way transaction. I can measure the lead content in drinking water, but that lead content can’t measure me back. Measuring location is a different kind of heuristic—especially when treated relatively. I can use a device to measure where another device is, and that device can do the same to my device. They can talk to each other, and through mutual agreement, determine where they are.
The XYO Network is built around “sentinels” that witness these transactions and set into motion a chain of verification tools that prove their truth value. (Trouw says the foundation of the network is the thousands of physical tracking devices—used to keep track of personal items, such as luggage—already placed into the world through XY Findables, a consumer-facing company Trouw launched in 2012.) If a location query is placed in the vicinity of a sentinel, the sentinel is rewarded with XYO tokens, which also function as payment method for those requesting the query. Similar to Ethereum Gas, the cost of a location verification depends on the complexity of the query.
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Trouw compares the process to two people who each take a selfie. How might they prove they were near each other? Each prints out a copy of their respective selfie, autographs it, and hands it to the other. We can’t say with any absolute certainty where the two people are located, but their signed copies demonstrate their proximity. A chain of relationships, abetted by XYO, could connect a sensor in a UPS package, the delivery driver’s handheld device, and even the doorbell of the house where the delivery must occur, offering demonstrable proof that the package made it inside the house. A more complex web, linking sentinels across larger distances, could verify where the entire UPS fleet is at any given moment.
Like many creative blockchain applications, XYO’s depends on a world with increasingly complex IoT networks. But Trouw is also betting that location data will increasingly be a kind of lingua franca that will underlie all kinds of data collection. Like the car doing 60, a lot of data is useless—or at least, worth considerably less—without a location component.
We all give off “data” all the time, he points out, and the world is becoming increasingly adept at gathering that data. If we can control smart contracts that manage how location data is doled out, we have a better chance of maintaining control—and even seeing some kind of personal profit—from that data.
Trouw mentions home DNA kits as a prime example of the fluorescence of data collection. Trouw was born in South Africa, and spoke only Afrikaans until his family migrated to the U.S. when he was seven. He recently took a DNA test and discovered that his varied lineage included some Pacific Islander ethnicity—not surprising, considering how South Africa’s proximity to the Cape of Good Hope made the area a crossroads over the centuries. One of the cornerstone concepts of ancient Polynesian navigation was the idea that location was contingent, only definable in relation to other locations. If the XYO approach takes off, it will be a link to the past as much as a bridge to the future.