In the past weeks I heard a lot pros and cons about IOTA, many of them I believe were not true (I'll explain better). I would like to start a serious discussion about IOTA and help people to get into it. Before that I'll contribute with what I know, most things that I will say will have a source link providing some base content.
The pros and cons that I heard a lot is listed below, I'll discuss the items marked with *.
Many users claim that the network infinitely scales, that with more transactions on the network the faster it gets. This is not entirely true
, that's why we are seeing the network getting congested
(pending transactions) at the moment (12/2017).
The network is composed by full-nodes (stores all transactions), each full-node is capable of sending transactions direct to the tangle. An arbitrary user can set a light-node (do not store all transactions, therefore a reduced size), but as it does not stores all transactions and can't decide if there are conflicting transactions (and other stuff) it needs to connect to a full-node (bitifinex node for example) and then request for the full-node to send a transaction to the tangle. The full-node acts like a bridge for a light-node user, the quantity of transactions at the same time that a full-node can push to the tangle is limited by its brandwidth.
What happens at the moment is that there are few full-nodes, but more important than that is: the majority of users are connected to the same full-node
basically. The full-node which is being used can't handle all the requested transactions by the light-nodes because of its brandwidth. If you are a light-node user and is experiencing slow transactions you need to manually select other node to get a better performance. Also, you need to verify that the minimum weight magnitude (difficulty of the Hashcash Proof of Work) is set to 14 at least.
The network seems to be fine and it scales
, but the steps an user has to make/know are not friendly-user
at all. It's necessary to understand that the technology envolved is relative new and still in early development. Do not buy iota if you haven't read about the technology, there is a high chance of you losing your tokens because of various reasons and it will be your own fault. You can learn more about how IOTA works here
There are some upcoming solutions that will bring the user-experience to a new level, The UCL Wallet
(expected to be released at this month, will talk about that soon and how it will help the network) and the Nelson CarrIOTA
(this week) besides the official implementations to come in december.
We all know that currently (2017) IOTA depends on the coordinator because the network is still in its infancy and because of that it is considered centralized by the majority of users.
The coordinator are several full-nodes scattered across the world run by the IOTA foundation. It creates periodic Milestones (zero value transactions which reference valid transactions) which are validated by the entire network. The coordinator sets the general direction for the tangle growth. Every node verifies that the coordinator is not breaking consensus rules by creating iotas out of thin air or approving double-spendings
, nodes only tells other nodes about transactions that are valid, if the Coordinator starts issuing bad Milestones, nodes will reject them.
The coordinator is optional since summer 2017, you can choose not implement it in your full-node, any talented programmer could replace Coo logic in IRI with Random Walk Monte Carlo logic and go without its milestones right now. A new kind of distributed coordinator
is about to come and then, for the last, its completely removal. You can read more about the coordinator here
These are blockchain-based cryptocurrencies (Bitcoin) that has miners to guarantee its security. Satoshi Nakamoto states several times in the Bitcoin whitepaper
that "The system is secure as long as honest nodes collectively control more CPU power than any cooperating group of attacker nodes
". We can see in Blockchain.info that nowadays half of the total hashpower in Bitcoin is controlled by 3 companies (maybe only 1 in the future?). Users must trust that these companies will behave honestly and will not use its 50%> hashpower to attack the network eventually. With all that said it's reasonable to consider the IOTA network more decentralized (even with the coordinator) than any mining-blockchain-based cryptocurrency
You can see a comparison between DAG cryptocurrencies here
Some partnerships of IOTA foundation with big companies were well known even when they were not officialy published. Some few examples of confirmed partnerships are listed below, others cofirmed partnerships can be seem in the link Partnerships with big companies
at the pros section.
So what's up with all alarming in social media about IOTA Foundation faking partnerships with big companies like Microsoft and Cisco?
At Nov. 28th IOTA Foundation announced the Data Marketplace
with 30+ companies participating. Basically it's a place for any entity sell data (huge applications, therefore many companies interested), at time of writing (11/12/2017) there is no API for common users, only companies in touch with IOTA Foundation can test it.
A quote from Omkar Naik (Microsoft worker) depicted on the Data Marketplace blog post gave an idea that Microsoft was in a direct partnership with IOTA. Several news websites started writing headlines "Microsoft and IOTA launches"
(The same news site claimed latter that IOTA lied about partnership with Microsoft) when instead Microsoft was just one of the many participants of the Data Marketplace. Even though it's not a direct partnership, IOTA and Microsoft are in close touch as seen in IOTA Microsoft and Bosch meetup december 12th
, Microsoft IOTA meetup in Paris 14th
and Microsoft Azure adds 5 new Blockchain partners (may 2016)
. If you join the IOTA Slack channel you'll find out that there are many others big companies in close touch with IOTA like BMW
and other companies
. This means that right now there are devs of IOTA working directly with scientists of these companies to help them integrate IOTA on their developments even though there is no direct partnership published
, I'll talk more about the use cases soon.
We are excited to partner with IOTA foundation and proud to be associated with its new data marketplace initiative... - Omkar Naik
IOTA's use cases
Every cryptocurrency is capable of being a way to exchange goods, you pay for something using the coin token and receive the product. Some of them are more popular or have faster transactions or anonymity while others offers better scalablity or user-friendness. But none of them (except IOTA) are capable of transactioning information with no costs (fee-less transactions
), in an securely form (MAM
) and being sure that the network will not be harmed when it gets more adopted
(scales). These characteristics open the gates for several real world applications, you probably might have heard of Big Data
and how data is so important nowadays.
Data sets grow rapidly - in part because they are increasingly gathered by cheap and numerous information-sensing Internet of things devices such as mobile devices, aerial (remote sensing), software logs, cameras, microphones, radio-frequency identification (RFID) readers and wireless sensor networks.
It’s just the beginning of the data period. Data is going to be so important for human life in the future. So we are now just starting. We are a big data company, but compared to tomorrow, we are nothing. - Jack Ma (Alibaba)
There are enormous quantities of wasted data, often over 99% is lost to the void
, that could potentially contain extremely valuable information if allowed to flow freely in data streams that create an open and decentralized data lake
that is accessible to any compensating party. Some of the biggest corporations of the world are purely digital like Google, Facebook and Amazon. Data/information market will be huge in the future and that's why there so many companies interested in what IOTA can offer
There are several real world use cases being developed at the moment, many of them if successful will revolutionize the world. You can check below a list of some of them.
These are just few examples, there are a lot more ongoing and to explore
IOTA Wallet (v2.5.4 below)
For those who have read a lot about IOTA and know how it works the wallet is fine, but that's not the case for most users
. Issues an user might face if decide to use the current wallet:
Problems that could be easily avoided with a better understand of the network/wallet or with a better wallet that could handle these issues. As I explained before, some problems during the "congestion" of the network could be simply resolved if stuff were more user-friendly, this causes many users storing their iotas on exchanges which is not safe either.
The upcoming (dec 2017
) UCL Wallet will solve most of these problems. It will switch between nodes automatically and auto-reattach transactions for example (besides other things). You can have full a overview of it here
. Also, the upcoming Nelson CarrIOTA
will help on automatic peer discovery for users setup their nodes more easily.
IOTA Vulnerability issue
On sept 7th 2017 a team from MIT reported a cryptographic issue
on the hash function Curl. You can see the full response of IOTA members below.
Funds were never in danger as such scenarios depicted on the Neha's blogpost were not pratically possible and the arguments used on the blogpost had'nt fundamentals, all the history you can check by yourself on the responses. Later it was discovered that the whole Neha Narula's team were envolved in other concurrent cryptocurrency projects
Currently IOTA uses the relatively hardware intensive NIST standard SHA-3/Keccak for crucial operations for maximal security. Curl is continuously being audited by more cryptographers and security experts. Recenlty IOTA Foundation hired Cybercrypt
, the world leading lightweight cryptography and security company from Denmark to take the Curl cryptography to its next maturation phase. It took me a couple of days to gather the informations presented, I wanted it to make easier for people who want to get into it. It might probably have some mistakes so please correct me if I said something wrong. Here are some useful links for the community.
This is my IOTA donation address, in case someone wants to donate I will be very thankful. I truly believe in this project's potential.
This is a donation address, if you want to do the same you might pay attention to some important details:
This happens because IOTA uses Winternitz one-time signature to become quantum resistent. Every time you spend iota from a address, part of the private key of that specific address is revealed. This makes easier for attackers to steal that address balance. Attackers can search if an address has been reused on the tangle explorer and try to brute force the private key since they already know part of it.
- Create a seed for only donation purposes.
- Generate a address and publish it for everyone.
- If you spend any iota you must attach a new address to the tangle and refresh your donation address published before to everyone.
- If someone sends iota to your previous donation address after you have spent from it you will probably lose the funds that were sent to that specific address.
- You can visualize how addresses work in IOTA here and here.
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