IoT or Internet of Things, M2M or Machine to Machine. Micro Transactions. These are relatively new terms not commonly known outside of the technosphere, but are going to have a significant impact on you and societies around the world in the near future. In fact, this technology is already making use of the international interconnected infrastructure that has been built. In general, these terms describe systems where connected devices communicate with each other without human intervention. As the world becomes more connected, it’s inevitable that our devices, even our dumb appliances, are going to also become connected. They will become smart devices. Refrigerators will update your shopping list automatically. Bicycles for rent will charge by the minute. You’ll pay for public wi-fi as you hop node to node. Cars will communicate with each other to prevent collisions. Roaming drones will compete for your business to deliver your package across town. Medical equipment will talk to nurses, doctors, and service technicians. This isn’t even scratching the surface of what the machine economy and Internet of Things is capable of. While some of these are happening to some extent now, what they lack is a common, customized platform. IOTA aims to change that.
IOTA protocol is an encrypted network by which devices can communicate and transfer value with no fees. This network is called a Directed Acyclic Graph (DAG), or tangle. A DAG is fundamentally different than a blockchain in that it’s not a linear chain and there are no blocks, but rather a mesh network. While a transaction on a blockchain has one path to its validation, through the last block produced, a transaction on the tangle has many interconnected paths to its validation point and doesn’t have to wait for a single block to validate it. The way a blockchain works is synchronous. That means a transaction must wait for a block to be produced which contains many transactions. That block that is produced gets added to the top of the database and then the remaining transactions and future transactions must wait for the next block to be mined for validation. There are two problems with this system. First, while this is a very powerful, secure and reliable type of network, it doesn’t scale particularly well for a large volume of transactions that have to be processed sequentially, which causes a bottleneck. Second, that bottleneck diminishes the speed of the transactions needing recorded. This is also not a feasible system for very small transactions needed by interconnected devices because of the cost of mining these blockchain transactions. There are a number of solutions being developed, including off chain payment channels like the Lightning Network, increasing block sizes such as what Bitcoin Cash does, or how Dash uses Masternodes to instantly validate transactions. While these solutions may work, they don’t change the fact that blockchains don’t natively scale well. The tangle on the other hand was designed from the ground up to not only scale, but to actually get faster as demand on the network increases. The way it does this is that instead of nodes and miners validating and recording transactions, each device attempting a new transaction in the tangle must first validate two prior transactions. Because of this set up, the more new transactions attaching themselves to the tangle, the more transactions get validated, thus increasing the speed of the network as demand increases.
IOTA uses the IOTA token to represent value on the network. it was fully distributed via an ICO sale (which the development team received none of unless they put up their own money, just like a regular investor). No new tokens will ever be created or released into the wild. There are 2,779,530,283,277,761 total tokens and while that appears like a lot, since it’s not divisible, it’s actually very close to the total number of bitcoin satoshi’s that will ever be released (a satoshi is the smallest unit of a bitcoin). And since IOTA is designed for microtransactions, a high number of tokens is necessary for transaction liquidity. MIOTA is the most common denomination when talking about and trading the token. An IOTA is actually 0.000001 MIOTA. That means it takes 1,000,000 IOTA tokens to make 1 MIOTA. This makes sense because of the need of microtransactions of small values required for Machine to Machine interaction. IOTA can be found on major exchanges like Binance, Bitfinex, HitBTC and OKex, among others.
Now, if you’ve been following bitcoin in any manner, you should be well aware that the cost of transacting has reached levels that preclude bitcoin from servicing micro and nano transactions. Why would you pay $2+ dollars to send a penny or less? With the tangle there are no fees to use the network because there are no miners to pay. Each device connected to the tangle must verify two transactions for the network before performing its own transaction. This fee-less system allows devices the capability of instant micropayments, which in turn opens up a whole new economy.
A controversial aspect of IOTA is Curl, the cryptography solution they employed. It’s controversial because the IOTA team developed this system on their own instead of using a well tested and approved cryptographic system. Recently a research team came out claiming that Curl was not robust enough as they were able to create collisions which in turn allowed them to forge transaction signatures. However, the research team also said that the vulnerabilities have been addressed are not a part of the current Curl implementation. In response, the IOTA team claims that the vulnerabilities were not applicable in the real world and there never was any danger. While cryptography is well beyond my skillset, I believe that IOTA has addressed these claims adequately and they are implementing a new protocol, called Cubic, that will use the underlying IOTA network. Ultimately though, it’s up to you to determine if Curl and the IOTA team are up to par.
In order for IOTA to enable quorum-based computation on its network, the team has crated a new protocol that will ride on their network. Individual qubics are, in essence, prepackaged quorum-based computational tasks. Qubic leverages the IOTA Tangle to package and distribute qubics from their owners to the oracles that will be processing them.
Qubics are published as messages in normal IOTA transactions, and contain special instructions, called metadata, on how and when to process them. Oracles can read qubic metadata to decide whether or not to perform the required processing for the associated rewards. Qubic-enabled IOTA nodes (Q-nodes for short) can handle much of this decision making automatically based on parameters set by their operators.
Qubic tasks are specified using an intermediate trinary-based functional programming language called Abra. The Qubic programming model allows for data to flow from qubic to qubic throughout the system. Technically speaking, qubics are event-driven, meaning that they listen to the Tangle directly for input data, and run whenever the input data changes. Since qubics post their results back to the Tangle, running a single qubic can cause many other qubics to run in a sort of “chain reaction.” Qubics act as the trigger for other qubics, which in turn trigger yet other qubics, etc.
In other words, qubics can live on the Tangle in a dormant state. When specific input data becomes available or changes, they will “awaken” and begin processing, which may result in a cascade of other qubics waking up as new results become available. This allows for a very dynamic programming environment because you can add new qubics at any time and tie them to whatever input data you like.
What’s more, anyone can post a transaction containing the qubic code they want to run and, for the appropriate rewards, see the results show up in the Tangle.
IOTA development was started in 2015 and the IOTA Foundation was established in Berlin, Germany in 2017.The founding IOTA team consists of David Sønstebø, Dominik Schiener, Sergey Ivancheglo, and Dr. Serguei Popov. From what I can gather, these men are all highly respected in their field and more top tier talent is regularly being added to the team. The team maintains a regularly updated blog that you can follow to stay up to date with the development of IOTA.
Even within one of the most exciting and transformative spaces in existence right now, IOTA has managed to stand apart by bringing to market one of the most revolutionary technologies in history. When I look for projects to get behind, being a ‘game changer’ is at the top of my check list and IOTA is a game changer. I am very enthusiastic about this project and I am going to enjoy watching it develop while I CRYPT ON!!
Donny Letson, Shadowcrypt