Like many of you, I've been following the different other blockchain applications to find the next big thing. IOTA seemed like the hottest new token.
On December 14, 2017, the MIT Technology Review published the article "A Cryptocurrency Without a Blockchain Has Been Built to Outperform Bitcoin". This occurred about a week after IOTA announced its partnership/collaboration with Microsoft at the beginning of December. However, many crypto-veterans were immediately suspicious because no one could find any announcements from a Microsoft source. Most recently, the IOTA foundation announced that it was selected by the Tokyo Government Accelerator.
So is IOTA with its "tangle" technology the next big thing in the world of blockchain?
The writer of the first article seems to think so. However, it seems he was rebutted by one of his own colleagues over at MIT just a short time later by the MIT Media Lab in "Our response to "A Cryptocurrency Without a Blockchain Has Been Built to Outperform Bitcoin""
This article essentially points out the discrepancies and issues with some of the claims re IOTA. The key points being:
- IOTA has partnerships with many big name companies.
This is what initially made me suspicious of IOTA as well as the claims to "partnerships" with these companies seemed like exaggerated claims at best.
- IOTA has a tamper-proof decentralized system
The entire IOTA system went down in November, 2017 for about 3 days. Unsure what exactly caused this outage, but as the article points out, it has never happened to Bitcoin or Ethereum. Tamper-proof also seems like an exaggerated claim. Furthermore, relies on a "coordinator" or essentially a single point of failure, much like traditional cloud systems. Unlike the standard decentralized blockchain system with many nodes and consensus based ratification, this single "coordinator" creates a centralized vulnerability.
- IOTA is fee-less
Again, this is more misleading than false. IOTA is fee-less like Bitcoin is fee-less. Bitcoin transactions cost up to USD 50 a transaction now - I would call this quite a hefty fee and basically cost prohibitive for handling small transactions.
- Vulnerabilities
In August, a “serious vulnerability” was discovered in IOTA's curl hash function. Two conflicting explanations were provided by IOTA. First, it was claimed that such a vulnerability was intentional to find copy cats using their code. Then it was later claimed that the author didn't write it at all, but rather an AI wrote it. Which is the real answer?
Conclusion
I'm not definitely concluding that IOTA will not be successful, but this entire industry is full of scams and frauds. IOTA seems like one of the more established tokens with a vision for true utility, unlike the many tokens that just seem to be pump and dump illegal fundraising that just call a security a token.
As such, I am extremely wary of anyone who is misleading as that is only a short step away from fraudulent behavior.
The MIT Media Lab article provides additional references to other people who are skeptical of IOTA.
Sources:
https://www.technologyreview.com/s/609771/a-cryptocurrency-without-a-blockchain-has-been-built-to-outperform-bitcoin/
https://www.media.mit.edu/posts/iota-response/
That's pretty manupilative of them
Especially fee-less part
Lets not push this crypto thing to its limits
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