What should we expect as IOTA moves into a Coo-less future? Maybe looking backwards can inform a look ahead.
The 28th of May of 2019 marks a historic day in IOTA’s already remarkable history. IOTA is a project that started as nothing more than an ambitious vision in the minds of four extraordinary people a handful of years ago. It’s important to maintain perspective on how it all happened. Well before the cryptocurrency boom of 2017 that saw astronomical crypto valuations, and well before the corresponding ICO craze that allowed nearly any project with a white paper to raise tens of millions of dollars on a promise, the IOTA founders had been working on the very fringes of distributed ledger technology. And that’s saying a lot, because DLTs were still fringe themselves. The IOTA team had been working on the first ever implementation of a Proof of Stake consensus mechanism in a cryptocurrency project called Nxt project. Over time, they began to realize that the cryptocurrencies at that time were unable to cater to the needs of a future internet of things (IoT), and the seed of a machine economy was planted.
Realizing the importance of a value and data transfer layer to the IoT, it was also apparent that the future global standard would have to be distributed/decentralized and very cheap to use. The implications of a future IoT built on top of such a layer are as broad as the implications of the internet itself – who could have predicted that search, video streaming, and e-commerce would all turn into pivotal industries back when there were only a few thousand hobbyists playing with email in the 90’s? For the IoT, the IOTA founders envisioned a future in which machines could autonomously transact, vehicles could own themselves, drones could have sovereignty, and every device would be economically entangled with society. Unimaginable today.
They began building this audacious project in 2015. Instead of raising money and retaining a large stake of tokens with a highly marketed ICO, the decision was made to have a small sale of every token, which meant even the founders themselves had to buy tokens if they personally wanted to have a stake in the project. A fair distribution to anyone who wanted to participate. Avoidance of crowdsale marketing glitz and glamour was arguably detrimental to the success of the funding campaign, however, as it resulted in raising less than a million dollars. Despite this, they continued to rigorously stick to their values by avoiding marketing hype and shooting down misinformation at every turn. This approach was strongly opposed by the prevailing “pump-the-price-at-all-costs” mindset of the crypto community at the time.
When the price of Bitcoin plummeted after the crowd sale, IOTA must have been working on a tight budget. Dominic was eating frozen pizzas, yet progress continued. David asked the community to secure the future success of IOTA and to establish what we know today as the IOTA Foundation, and the community responded by donating more than 5 percent of the entire token supply for the cause.
2017 was the year that the project really stepped into the public eye. The first GUI wallet was released at the beginning of 2017 to great uproar, and was widely viewed as being buggy and difficult for non-experts to use. Then came the exchange listing on Bitfinex that summer, and the long awaited liquidity event that goes along with exchange access. The IOTA Foundation would be officially instantiated as well. Three months later, a highly controversial alleged security vulnerability became a veritable thorn in the side of IOTA’s public perception, and prompted a four part clarification from the IOTA Foundation. All of this was happening as the crypto bubble of ’17-’18 was forming, pushing the valuation of IOTA to crazy heights along with every other DLT project. This allowed for the endowment of the Ecosystem Development Fund and presumably (hopefully) secured the finances of the IOTA Foundation itself for the foreseeable future.
2018 was declared to be the year of adoption. The IOTA Foundation grew to be a respectable 100 person organization, business development took off (“partnerships” anyone?), and the IOTA research team was hard at work on “Q”. The IOTA Foundation sponsored hackathons, co-founded industry alliances, provided guidance to governing bodies, and teamed up with research institutions, among many other things.
And now here we are in the middle of 2019, learning today that not only are the training wheels about to come off of the Tangle, but that there will be an entire overhaul of the consensus mechanism and network structure. The solution to a vision that the IOTA founders had so long ago is now tangible. It’s possible.
It has been their long string of tremendously strong decision making that has led up to this moment. They had the prescience to envision an IoT machine economy built upon a permission-less value transfer network, and the ambition to provide the solution. They had the conviction to offer a fair token crowd sale which built a unique trust within the community. They had the fortitude to fend off crypto hype and trolls in the face of bubbles and busts. They had the humility to ask for help when it was needed, and the community responded. Most of all, they’ve always prioritized long term success over transient short term reward, and today is just the first payoff of many more to come.
The IOTA Foundation wisely addressed the old security concern by moving to a proven hash function for the time being, and hiring a world renown cyptography firm to develop the hash function of the future. The old wallet difficulties were solved with the development of sleek new Trinity. Governance was aggressively addressed when the IOTA Foundation was established in one of the strictest regulatory environments in the world as a gemeinnützige Stiftung in Germany.
The people behind IOTA are what make it great. It’s obvious from the string of so many solid decisions in a row that somebody there is doing something right. The co-founders have driven the project through thick and thin, and have had the invaluable experience of running on both extremes: with shoestring budgets and with Foundation-level budgets. They were here before “cryptocurrency” was cache and have stayed true to their path the entire time.
In a world already full of wonder, now we find ourselves entering the true era of #InfiniteInnovation. There’s lots of hard work to be done, but the path is now clear. Let’s get to work and make this vision a reality.