A network of interconnected computers seems mundane today. People use servers handling terabytes of data, running high-speed protocols to relay information across the world every day. It’s called the Internet, and it has revolutionized the way we communicate.
The Internet of Things (IoT) brings this technology to physical objects, allowing for smart fridges that restock food as needed, driverless vehicles, and smart-home security systems.
Blockchain has the potential to impact the way we trade in the same way.
IOTA’s goal is to bring the power of blockchain to an interconnected web of physical objects, so everything from research instruments to simple home appliances can explore secure economic interactions.
An Ambitious Task
IOTA celebrated its third founding in late-2020, and there are currently no other comparable projects working on this technology. IOTA was created so that networked machines could execute transactions with each other, but this dream is still far from a reality.
The IOTA Foundation built IOTA on its Tangle distributed ledger technology. If a blockchain is a string of blocks connected by chains, Tangle is a chaotic network of ‘tangles’ and is capable of scaling to handle any number of transactions with no fees. On paper.
While the development team has been hard at work, patching bugs and maintaining the blockchain, progress has been slow for one reason or the other. In March 2020, David Sønstebø, founder of the IOTA project, announced that he would repay the $1.97 million owed to victims of a hack that had taken place one month prior.
The vulnerability, which was found in a flawed integration with IOTA’s Trinity wallet software, had been exploited by attackers to the account of over 8.5 million mIOTAs in stolen funds.
The project is making headway towards its anticipated Coordicide stage and has deployed phase one of the penultimate Chrysalis phase in August. Chrysalis phase 2 is currently in development.
Don’t Judge a Token by its Price
The IOTA ICO, held in 205, was a resounding success and raised over $400,000 at a $0.001 per token. IOTA grew to a token value of nearly $5 by late 2017, marking an appreciation of roughly half a million percent.
While the token has been hovering between $0.20 and $0.45 for the last year or so, it’s important to remember that this technology is being built years ahead of its time.
A Better Blockchain
IOTA doesn’t run on a ‘traditional’ blockchain platform. Instead, it runs on the Tangle network, which is purportedly more efficient than most payment networks out there.
Touting immediate confirmations and energy-efficient consensus mechanisms, there’s certainly some powerful technology under the hood. The main cryptocurrency on the platform is mIOTA, a token designed for the Tangle system that allows machines to transfer value with each other.
Fragmented, but Persistent
It’s been a rough year for IOTA. In an attempt to prevent attackers from stealing even more funds during the hack mentioned above, the IOTA team shut down the entire network for nearly two weeks.
This put the network’s decentralization into question, sparking concern and debate from the community as a whole. The founders of IOTA don’t seem to get along too well either.
In February this year, just before the hack, lead developer and founding member Sergey Ivancheglo declared that he’d fallen out with co-founder David Sønstebø. In spectacular fashion, his tweets claimed he was owed no less than 25 million mIOTAs.
This wasn’t Ivancheglo’s first rodeo and has historically attracted the spotlight with his dramatic takes. Conflict surrounded the IOTA team, with calls for foundation head Dominik Schiener to step down from his position.
The project has since recovered from these setbacks and is steadily working towards its Chrysalis interim-phase launch.
The Type to Tangle
Despite the relatively poor performance of the mIOTA token, the community seems to have a positive outlook. The technology may not be where it needs to be today, but it could inspire some genuinely spectacular products when it gets there.
IOTA’s technology is still in its early stages and isn’t compatible with most products available today. This makes it challenging to present a growing, developing platform even though the team claims they are on track to releasing the Coordicide upgrade on time.
One of a Kind
IOTA is quite a unique project – so unique, in fact, that there’s really nothing else like it out there. IOTA is a project that’s still in its nascent stages and is a technology being developed far ahead of its time.
In an industry where most people look for short-term gains, IOTA is attempting to innovate. With no competitors in the space, IoT is free to innovate in whatever direction they see fit. The sooner they figure it out, the sooner we’ll have our hands on it.
With more adoption, the network will be capable of handling much more than is currently possible. As more users adopt IoT products and integrate them into their lifestyles, this could be the money of the future.
The (Not Too) Distant Future of IOTA
Besides the upcoming Chrysalis phase, the IOTA development team has been quite active, posting monthly updates on patches and maintenance improvements. Just recently, the project announced its partnership with the Japanese government on an industrial infrastructure project.
The collaboration will allow them to predict which parts of an industrial complex require maintenance using DLT and artificial intelligence systems. Other big-name partnerships include a patent recently filed by MasterCard for a Tangle-based payment system.
Blockchains may be capable of a lot, but people won’t use something that has no use-cases. IOTA is a project working on the future now so we can have the future sooner, and as the platform grows and expands to find its place, our world of things might soon get its hands on some money.