IOTA (MIOTA) – There is no secret that digital assets are growing in leaps and bounds across the world. There are more digital currencies today than ever before, with the net worth running into billions of dollars. This increase is expected to be fueled further by the introduction of IOTA’s technology to the ecosystem.
The internet of things is a concept that seeks to interconnect devices, products, machines, and tools through the internet so that they can connect with each other. Think of this technology as a sensor in your refrigerator that makes a new order of groceries when your current supply in your house runs low.
Most people think that a machine-to-machine economy is the way to go as far as trading in digital assets is concerned. Adaptive networks will form from interconnected devices making the procedure more desirable. The biggest question is whether current cryptocurrencies are compatible with this technology, or will the ecosystem need new digital assets.
Usually abbreviated to IoT, the technology has made inroads into digital currencies, thanks to IOTA’s ambitious development over the last few years. If what experts are saying is anything to go by, then this technology will define the space of the blockchain in the foreseeable future. There are reasons to believe so.
From the onset, IOTA is thought of as a channel to upend the silos in today’s centralized system. This way, it can streamline operations of digital businesses by reducing cost and saving time. In addition, it has managed to get rid of unpleasant technological bottlenecks that in the past used to slow down transactions, causing backlogs.
Investors have embraced the technology with both hands, as it promises to cut on the absurd energies that the digital assets traditionally consumed. These three things are really the most desirable factors for any trader or investor- time, cost and convenience. But cab IOTA deliver what it promises?
IOTA’s Tests Increase this Belief
In February 2018, Taipei, the capital city of Taiwan announced that its department of technology was testing IOTA Foundation’s technology of interconnected smart devices. The Commissioner in charge of the Department of IT, Wei-bin Lee stated that the city would partner with IOTA for the implementation of its new project, the Digital Citizen Card.
The commissioner did not elaborate past this project. It is important to note that the city is not yet using any cryptocurrency at the moment. While IOTA is already set up offices in the capital city, details of the upcoming project are scanty. It remains to be seen if the technology will benefit the belief that IoT is the way to go.
Deep Suspicions on IOTA’s Technology Abound
IOTA currently has bolstered its value by hiring more than 150 cryptographers and developers. However, the company has not deal with criticism the way we would all like them to. Indeed, experts have expressed worry over the glaring security loopholes in the company’s architecture. Many of these have wondered if the great ideas will actually work during implementation.
While the idea of IoT sounds great, what will happen if it doesn’t meet the expectations of investors? Currently, the value of the technology is worth $2.7 billion in users’ and investors’ money. It is quite horrifying if these people will be left out of luck if the technology does not deliver on its promises.
In Late September 2017, an initiative by Massachusetts Institute of Technology conducted a research that started negative speculation. Results from MIT’s Digital Currency Initiative (DCI) stated that there was fault’s in IOTA’s code. These faults led to the belief that the technology was vulnerable.
DCI observed that the developers employed a hash function in-house to secure the system’s data. It is referred in coding language as P-Curl. They stated that this is a big fault, and observed that it was better to secure data with the tested and proven functions of the ordinary digital assets architecture.
In its defense, IOTA maintained that the decision to use an in-house code rather than the conventional function to protect their open-source software from being copied or accessed by just anyone. MIT researchers shot back, stating that their insecure hash function was actually unsafe.
Investors Lost $4 million in a scandal
While cryptocurrency researchers have observed that the custom-made hash function is insecure, it doesn’t appear that IOTA investors have lost funds directly to this vulnerability. However, a scandal involving the crypto’s absence of seed generator seems to have made losses as high as $4 million.
If there was a seed generator, it would have helped users produce credentials to control their coins. This fault led one website to steal funds using credentials that were stored on its site. Many naïve investors gave away their credentials to an individual. In the aftermath, the company was accused of malice especially because adding a seed generator was simple and inexpensive.
How IOTA Reacted to Criticism
Dominik Schiener, a co-founder at IOTA admitted that the user experience was not ideal, but stated that the entire crypto community did not have an excellent user experience. Even so, he announced that the company would introduce Trinity, a new wallet that would carry out a security audit on the code.
IOTA advertises its services as scalable and permissionless. Some crypto enthusiasts do not like the fact that the development team has more authority over the digital currency than over the protocol. This, they argue puts users’ funds at a considerable risk and have demanded better system control and transaction security from the company.
In conclusion, there are two powers that are at play here. On the one hand, IOTA has in its hands a technology for more scalable faster and cheaper digital transactions. On the other hand, researchers have poked holes at the vulnerability and faults of the technology. But who really has the upper hand?
You cannot single out IOTA because it seems that the entire cryptocurrency economy is full of faults anyway. The company promises and has started implementing a technology that the crypto community needs. Since a fully decentralized network cannot be achieved overnight, researchers will have to allow IOTA develop and upgrade the technology further. IOTA is causing Ripples in the Cryptocurrency Ecosystem