Debunked: XYO Device Replacing GPS, Saving $2 Million a Day

[Mick West]

I've been seeing a lot of these ads recently, probably because I clicked on one of them a few months back. The headlines accompanying the ads have become increasingly incredible. Taking on an $11.2 Trillion market? Quite impressive when the entire US GDP is less than twice that at $18.5 Trillion.

Clicking through takes us to an article at decentric.org, which says:

THIS TINY DEVICE COULD REPLACE GPS AND SAVE US
$2 MILLION PER DAY

Called XYO, this exciting project has built over 1 million location beacons and is set to disrupt the $11 Trillion dollar location-reliant market
...
Unlike some digital projects out there lacking any real substance, XYO sits behind a company called "XY" who's been in business since 2012.

This San Diego-based company has built over 1 million tiny Bluetooth and GPS devices that help you find and track your lost items.

What the brilliant minds at XYO are building is the software to connect together these 1 million+ devices (and counting) to replace GPS.

The result is the world's first location-based, trustless, decentralized oracle network that isn't reliant on GPS, which costs American taxpayers a staggering $2 million per day.

To cut to the chase, these devices (which are actually far larger than the unrelated stock photo used in the ad) are NOT replacing GPS. In fact they rely on GPS to actually work in a useful manner.

But what are these miracle devices? What's that thing on the finger supposed to be? The Decentric article describes it as a "bridge component", which is one of four components that XYO says makes up their system.

Sentinel components are heuristic witnesses. They observe heuristics and vouch for the certainty and accuracy of the heuristic by producing temporal ledgers. The most important aspect of a Sentinel is that it produces ledgers that Diviners can be certain came from the same source by adding Proof of Origin to them.

Bridges are heuristic transcribers. They securely relay heuristic ledgers from Sentinels to Diviners. The most important aspect of a Bridge is that a Diviner can be sure that the heuristic ledgers that are received from a Bridge has not been altered in any way. The second most important aspect of a Bridge is that they add an additional Proof of Origin.

Archivist components store heuristics in a decentralized form with the goal of having all historical ledgers stored, but without that requirement. Even if some data is lost or becomes temporarily unavailable, the system continues to function, but just with reduced accuracy. Archivists also index ledgers so that they can return a string of ledger data if needed. Archivists store raw data only and get paid only for retrieval of the data. Storage is always free.

A Diviner answers a given question by analyzing historical data that has been stored by the XYO Network. To accomplish this, heuristics stored in the XYO Network must have a high level of Proof of Origin to measure the validity and accuracy of the heuristic by judging the witness based on its Proof of Origin. Given that the XYO Network is a trustless system, Diviners must be incentivized to provide honest analysis of heuristics. Unlike Sentinels and Bridges, Diviners use Proof of Work to add answers to the blockchain.

Impressive sounding? But what is it talking about? What's a "heuristic witnesses?" Google the term and you'll find that only XYO have ever used this term before. What's a "heuristic" then? "Heuristic" is a term for an ad-hoc rule or procedure - basically something that you made up that seems to work well. In the XYO context they are using it in the way it's sometimes used in blockchain and cryptocurrency technology, which is an algorithm for doing something with multiple pieces of data. But instead of referring to the algorithm as a heuristic, they refer to the pack of data that results from that algorithm.

With that in mind, let's try translating XYO's description of "Sentinel components"

Sentinel components are heuristic witnesses. They observe heuristics and vouch for the certainty and accuracy of the heuristic by producing temporal ledgers. The most important aspect of a Sentinel is that it produces ledgers that Diviners can be certain came from the same source by adding Proof of Origin to them.​

Translation:

Sentinel components record their location and their location based interactions with other sentinals. They digitally sign their GPS or bluetooth derived location records with a device-unique key, they including the time stamp, and call that a "heuristic". They record these heuristics in order in a "ledger" and send it to the servers ("Archivists") via a "bridge".
​

The small yellow device there is an XY4+ Key Finder, a bluetooth device that connects to your phone. It does not record anything itself, just connects to your phone and the phones records the location (of the phone), so it can track when the Key Finder was last within range of the phone. It can also make the device beep if within range.

The Grey medium sized sentinel is an XYGPS

This uses GPS to determine its location, and then sends that location back to you via a the cellular network and the internet. As it's essentially a small cell phone its main problem is a short battery life of just a few days, compared to the bluetooth tracking device, which can last over a year. Inside it looks like this:

XY describe the largest (teal colored) sentinel as a "Super location miner", which I'm guessing has a bigger battery and more peer-to-peer connectivity (so it can record the locations of other nearby sentinels)

So the basic claim that "THIS TINY DEVICE COULD REPLACE GPS AND SAVE US $2 MILLION PER DAY" is obviously false. The XYO network relies on the GPS network. It does add another layer on top of that, recording locations, and recording when one device is near another device. But location reporting with any accuracy still needs GPS. You could not, for example, replace the GPS in your car with something that was not GPS (or an equivalent satellite triangulation service, like the Russian GLOSNASS). Unfortunately one of the XYO co-founders seems to imply that your could in this video, saying it could be used in self driving cars (although he may mean in addition to GPS, to provide additional trust, but it's not clear how that would work).

But what's that device on the finger? It's nothing directly to do with XYO or GPS, in fact it's a stock photo:
https://www.dreamstime.com/modern-e...component-rf-transformer-human-image111096974

The device show on the finger is a transmission line transformer, used in wired network connections, not wireless.

So if that's not a bridge component, then what it? A bridge here just connects the sentinel devices (like the key tracker) to the internet. So your phone could be one (it could also be a sentinel). A clue is the icon the XYO use:

That's the Raspberry Pi logo.

These are just small general purpose computers. You can add a Bluetooth adapter and then stick it in a location you think a bridge might be needed. It's small, but quite a bit larger than the stock photo suggests.

 

[Mick West]

Now I've been clicking around researching this, I get EVEN MORE of the ads. Sometimes two at once! They must figure me for a good investing prospect.

11,000% Bigger than BTC, and taking on an $11 Trillion dollar market? Presumably they Divided $11 Trillion by the (approximately) 100 billion market capitalization of BitCoin.

This speculative valuation of XYO is 10% of the entire planet's GDP.

 

[Mick West]

The ads are following me around and getting bigger.

Replace GPS? False.
People powered GPS? False.
Zero drinks the only safe drinks? False.

 

[deirdre]

This speculative valuation of XYO is 10% of the entire planet's GDP.

That's an awful lot of money for a device to help me find my car. I'm assuming it will help me find my car.

 

[Mick West]

That page actually had FOUR Decentric ads, there was this at the bottom:

Better alternative? False.

Now "cryptographic location tech" might actually be useful. The problem is it requires quite a large critical mass of "sentinels" and "bridges". It also (in this imagining) requires a viable XYO cryptocurrency that people will trade to incentivize people to set up and run the Archivers and Diviners (servers).

 

[Mick West]

That's an awful lot of money for a device to help me find my car. I'm assuming it will help me find my car.

No more than your phone does now.

 

[Mick West]

Oh, it seems the Decentric might actually be the same people as XYO. I though Decentric was just some kind of investment promoting newsletter. They have the same office address.


View attachment 34342

http://decentric.org/about/ http://archive.is/qAQGT
View attachment 34343

They do say this:
https://featured.decentric.org/top-list21749160

OK, so we're admittedly biased with this one because a core group of our team is behind XYO. But we're not excited about XYO for that reason alone.

 

[Mick West]

Not sure if this means anything, but it's a bit odd. The XYO Article on Decentric is written by Marg Teixeria, who is listed as a "Staff Writer".

However she does not mention this on her resume
https://www.margteixeiraconsulting.com/resume

or on her Upwork profile
https://www.upwork.com/o/profiles/users/_~0169fc40cc1f2ae601/

It seems like she's a freelance writer based in Portugal, and not a staff writer at Decentric.

Ah, it seems like that's an older version of the article, from 2018.07.07, it was still linked from a drop down menu
https://featured.decentric.org/top-list21749160

OK, so we're admittedly biased with this one because a core group of our team is behind XYO. But we're not excited about XYO for that reason alone. Actually, some of blockchain's most influential names are more excited about XYO than we are!
XYO came onto the scene out of nowhere in 2018. In fact, it's still flying a bit under the radar compared to where it could be next year.
Charlie Shrem, Bitcoin pioneer and founder of the Bitcoin Foundation, sits on their board of advisors.

Then the same article was posted the next day, July 8, 2018, under the byline of "Scott Scheper" - this is the one that is mostly linked on the front page. They just forgot to fix one link
http://decentric.org/this-tiny-device-brings-the-power-of-blockchain-to-the-real-world/

XYO came onto the scene out of nowhere in 2018. In fact, it's still flying a bit under the radar compared to where it could be next year.

Charlie Shrem, Bitcoin pioneer and founder of the Bitcoin Foundation, sits on their board of advisors.

Notice the text in bold was removed. The new writer, Scott Scheper is the head of marketing at XYO
https://www.linkedin.com/in/scottscheper/

So presumably they just used a freelance writer for the first draft, mislabeled her as a staff writer, then Scott took over the article, and removed the bit about "core group of our team is behind XYO," because that would be him.

 

[Mick West]

I seems like several the articles on Decentric were originally attributed to Teixeria

https://featured.decentric.org/top-list21749161
https://featured.decentric.org/top-list21749157

Also some by a "Petra Markos"

https://featured.decentric.org/top-list21749163

You will typically find a ton of Github Repositories with dozens of Issues created. Yet they collect cobwebs and won't get fixed for months, even years.
And that's where Gitcoin comes in!
Gitcoin's platform enables one to create bounties for each Github Issue. For instance, say you're a Github project owner and want a certain bug fixed. You can set a bounty in Ether, such as 1 ETH to fix the bug. That Issue gets broadcasted across the Gitcoin network of developers who will then work on the issue for that bounty!

Markos does freelance blockchain and Cryptocurrency writing on Upwork.
https://www.linkedin.com/in/petar-markoski/

 

[Mick West]

Actually it's slightly more confusing than an old page being left laying around. The ads with the ridiculously small unconnected device and the "staff writer" are linked to the live ads that are currently on many web pages I visit. The slightly more reasonable version with an actual key finder is what you get from visiting the web page directly.

The version for the ad has a long additional section how to invest.

 

[qed]

With that in mind, let's try translating XYO's description, first with "Sentinel components"

Sentinel components are heuristic witnesses. They observe heuristics and vouch for the certainty and accuracy of the heuristic by producing temporal ledgers. The most important aspect of a Sentinel is that it produces ledgers that Diviners can be certain came from the same source by adding Proof of Origin to them.​

Translation:

Sentinel components record their location and their location based interactions with other sentinals. They digitally sign their GPS or bluetooth derived location with a device-unique key, they including the time stamp, and call that a "heuristic". They record these heuristics in order in a "ledger" and send it to the servers ("Archivists") via a "bridge".
​

As @Mick West notes, this is standard block-chain/distributed-ledger technology, and everything described in Mick's translation can be achieved with a *software-only* solution, because the GPS and bluetooth hardware is already on the phone. I can see nothing that cannot be done already with software without this "magic" device.

 

[Mick West]

The investment page is a bit odd.
https://invest.xyfindables.com/xyo-equity-splash-page

There's a constant stream of "sales" that pop up in one corner, an a countdown timer in the other. This timer is repeated through the page. But the price "lock" resets to 48 minutes if you refresh the page, and the price per share stays fixed at $8

The code that stores the random sales has a disclaimer.
https://d1yih35rrbebx.cloudfront.net/counter/xy-counter.js

// DISCLAIMER: THIS DATA IS HISTORICAL AND ANONYMOUS; WE INTEND TO UPDATE IT REGULARLYs

$(document).ready(function () {
	var hover = false;
	var numItems = 215; //this will be total number
...
	// Below put headline text such as name or title for example: 'Jon Tim','ABC XYZ' separate by ,
	var titles = [
'Someone in Auckland Auckland',
'Someone in Auckland UTAuckland',
'Someone in Leominster MA',
'Someone in Andover MA',
'Someone in SAUGUS MA',
'Someone in franklin MA',
...
	// Below put Description that's means it's goes below name or title for example: 'he bought lens','he is my awesome clients' separate by ,

var link_titles = [
'purchased $1000 USD worth of shares',
'purchased $5000 USD worth of shares',
'purchased $2000 USD worth of shares',
'purchased $1500 USD worth of shares',
'purchased $2000 USD worth of shares',
'purchased $1000 USD worth of shares',
...
];
	var i= Math.floor((Math.random() * numItems) + 1);
	var flag= true;
	$('#someone-purchased img').attr('src',images[i]);
	$('#someone-purchased a').text(link_titles[i]);
	$('#someone-purchased span').text(titles[i]);
	function changeClass(){
		if(!hover){
			$('#someone-purchased').toggleClass('fade-in fade-out');
			if($('.fade-in').length == 0) {
				flag= true;
			}else{
				flag= false;
			}
			if(flag){
				setTimeout(function myFunction() {
					$('#someone-purchased img').attr('src',images[i]);
					$('#someone-purchased a').text(link_titles[i]);
					$('#someone-purchased span').text(titles[i]);
					i = Math.floor((Math.random() * numItems) + 1);
				},5000);
			}
		}
	}
	$('#someone-purchased').mouseover(function(){
		hover = true;
	});
	$('#someone-purchased').mouseout(function(){
		hover = false;
	});
	setInterval(changeClass,7000);

Looks like they repurposed some code that was supposed to show client testimonials.

 

[Mick West]

As @Mick West notes, this is standard block-chain/distributed-ledger technology, and everything described in Mick's translation can be achieved with a *software-only* solution, because the GPS and bluetooth hardware is already on the phone. I can see nothing that cannot be done already with software without this "magic" device.

You'd still need the "Sentinel" devices (bluetooth key finders, and cellular GPS devices) if you want to track something.

But those devices exist already. I don't see the use cases as being viable. Tracking is a niche market for expensive deliveries. To have ledger entries for every step of the way using a bluetooth tracker would require the existence of millions of nodes, and you would STILL not have full coverage. So you are going to still be relying on a GPS tracker with cellular data sending regular signed GPS positions - which would not need this network.

The idea is not without merit, as an extra layer of position verification would be useful in avoiding or detecting spoofing. But it's always going to be a piecemeal hit-and-miss verification. A more viable system is likely to come from future developments in trusted GNSS receivers, and maybe some kind of mesh verification from the telecoms.

 

[Mick West]

I think this is going to be hard to top in terms of number of ads on one page.

 

[tadaaa]

Looks like an example of Betteridge's law of headlines which is an adage that states: "Any headline that ends in a question mark can be answered by the word no."

"could this replace GPS" - NO

 

[Nth]

Fascinating little investigation here; there's a part of me that's always wondered a bit what the deal is with these pop-up ads promising to topple multi million billion trillion dollar industries.

Thanks for tracing this stuff back so the rest of us don't have to.

 

[Flavio Bonilla]

Thank you for the great research! I was searching for a device (GPS+RF?) to help me track a bunch of rental bikes and obviously got this ad all over the place. On that topic @Mick West is there any legit products you have seen out there worth considering? Thanks!

 

[Mick West]

Thank you for the great research! I was searching for a device (GPS+RF?) to help me track a bunch of rental bikes and obviously got this ad all over the place. On that topic @Mick West is there any legit products you have seen out there worth considering? Thanks!

I've not really looked into it, so unfortunately your guess/google is as good as mine.

 

[Mick West]

Actually it's slightly more confusing than an old page being left laying around. The ads with the ridiculously small unconnected device and the "staff writer" are linked to the live ads that are currently on many web pages I visit. The slightly more reasonable version with an actual key finder is what you get from visiting the web page directly.
View attachment 34350

The version for the ad has a long additional section how to invest.

"Decentric" also has a similar site "Fast Growing Tech", which seems to be another XYO marketing outlet.

https://fastgrowingtech.com/tiny-device

 

[cauri]

XY does RELATIVE positioning and GPS does ABSOLUTE positioning. That means that XY overlaps a lot of GPS use cases doing something that GPS cannot do. So they can actually put a dent in the current industry.
You're saying that because they use modern marketing tactics that we should not trust them, but it's the same tactics and methods as every other company out there. If I visit websites on puppies, I start getting ads about dog toys and adoption shelters, but that does not mean that I should not get a dog.
I admire the depth of your research but your derived conclusions do not hold together at all.

 

[Mick West]

XY does RELATIVE positioning and GPS does ABSOLUTE positioning.

If you have absolute positioning then what do you need relative positioning for? Especially when that relative positioning is simply proximity to a GPS location.

What they are selling is trusted proximity records. It's not a replacement for GPS, it's a different thing that relies on GPS and also relies on there being a huge existing XY network, which does not exist.

What's an actual use-case here? Consider exactly what would be needed for this use-case to work, and what benefits it gives you over what we have currently.

 

[NoParty]

XY does RELATIVE positioning and GPS does ABSOLUTE positioning. That means that XY overlaps a lot of GPS use cases doing something that GPS cannot do. So they can actually put a dent in the current industry.
You're saying that because they use modern marketing tactics that we should not trust them, but it's the same tactics and methods as every other company out there. If I visit websites on puppies, I start getting ads about dog toys and adoption shelters, but that does not mean that I should not get a dog.
I admire the depth of your research but your derived conclusions do not hold together at all.

Every company? Costco does this?

The whole "disrupting the x industry" is a common con that essentially concedes that a company's sales would be
laughed at if they honestly revealed the numbers...so they hide behind unfalsifiable terms like "disrupting."
Is that a bad sign, re. trusting someone? I'd say so. Just like a generic photo to make it seem real.

Worse yet, here: this claim isn't even about mythical "disrupting": The 'XYO' is only "set" to disrupt.
The advertising alone makes me extremely suspicious.

 

[benotto]

My smartphones all have GPS like capability with a simple program installed.

Why do I need to buy into amazing new tech when a 30 dollar used phone has it? I already carry that phone daily for phone and WWW use anyway.

 

[Pixie]

Hi Mike, sorry to resurrect a post so many months old. I just discovered your site today, the work you do is amazing.
When I read that paragraph about heuristic witnesses, my spidey sense detected a scam in the making.

There is no way for a legitimate tech company to attempt to attract customers with such convoluted language. It is written like that to keep away anyone who knows about blockchain, and to catch the unwary, mesmerized by flashy words.

So first, I wanted to see if the company was real. Being an American startup, I looked it up on crunchbase. It is real, and its CEO is named Arie Trouw. Now it became interesting. I found his github account, watched some interviews on Youtube (his focus is always on blockchain technologies). I found that his company was called Ength Degree LLC. He tried to raise 10 million in StartEngine but failed (he started to raise capital on his own website).
When I googled XYO, the second result was from coinmarketcap.com. So XY Findables' actual product is not a gadget, it's a cryptocurrency. There are tokens in circulation worth 14 million (probably from the ICO).

Mr. Arie Trouw has a past ("allegedly" because I can't confirm it's the same Arie Trouw)

A past as Ad hijacker. Forbes / Wired / Adweek

Now the fact that you get so many ads starts to make a little more sense, doesn't it?

XY describe the largest (teal colored) sentinel as a "Super location miner", which I'm guessing has a bigger battery and more peer-to-peer connectivity (so it can record the locations of other nearby sentinels)

Well, reading miner already makes me think someone's gonna mine something. I guess the devices are too small to mine, but since a smartphone is required, it wouldn't be far-fetched to think that phones are the ones doing the heavy lifting.
But mining what, and for whom? I don't want to think wrong.

I think the implications here are more serious than a company exaggerating the importance of its technology, or making ridiculous projections about its market share. I'm talking about the possibility of everything being a fraud (but not because of what they say -that you so well debunked) but because of what they are not saying.