IOTA (MIOTA)–Sunday marked the official announcement of IOTA’s revolutionary Qubic project, a quorum-based protocol that will allow the cryptocurrency to implement improved network efficiency in addition to Ethereum-like smart contracts. In the press release, the IOTA Foundation targeted two key areas that Qubic will address in relation to augmented IOTA utility: smart contracts that allow for micro-payment transactions made in real-time (for use in streaming, ride rentals, etc.), and a reward system that incentivizes user participation through Tangle.
While there was some initial confusion over whether Qubic constituted a new coin birthed out of the IOTA project, the press release put a definitive end to the speculation, stating that Qubic is neither a standalone currency, ICO, or forthcoming airdrop. Instead, it works as an application in conjunction with IOTA, serving to improve the functionality of the latter while also providing features novel to IOTA such as smart contracts. Even without function as a standalone currency, the two projects have significant overlap in terms of outlook and potential disruption for the 8-billion-plus IoT devices,
“In the long term, Qubic will allow people to leverage world-wide unused computing capacity for a myriad of computational needs, all while helping to secure the IOTA Tangle: an IOTA-based world supercomputer.”
The Qubic platform will be the most significant contribution to the IOTA stack, it will enable unlimited new use cases and turn the IOTA Project into a full solution. Information and details are beginning to be unveiled right now at https://t.co/U87nKaZWnI#IOTA #Qubic
— IOTA (@iota) June 3, 2018
Advantages of Qubic
From the press release, there are two significant advantages that emerge from Qubic implementation:
- Smart contracts. While cryptocurrency based smart contracts have primarily been associated with Ethereum, the potential for IOTA-backed contracts is arguably greater. Tangle, IOTA’s network protocol that allows for near-infinite scale, is superior to Ethereum’s current utility, which limits transactions per second at 15, as well as transaction fees hovering in the 0.50 USD range. IOTA has zero transaction fees and increases scalability as more users participate on the network. This increases the usability of smart contracts, further allowing for innovation such as the aforementioned microtransactions. Since the early days of Bitcoin, micropayments have been hailed as a genuine improvement for cryptocurrency over traditional fiat. The current digital model for payment is incompatible with small (think pennies being sent instantly) transactions that could offer a potential replacement for the current revenue model of invasive advertisements. It also creates new platform uses for social media, or even educational portals (imagine paying to have access to live Harvard lectures as opposed to attending a costly institution). Smart contracts remove the need for expensive third-parties by using the advancement of cryptocurrency to both authenticate and secure agreed upon transactions.
- Incentives for current IOTA users. The power of Tangle lies in the ability for the network to scale with user volume. The more users participating in IOTA’s network, the faster transactions occur, which increases utility for all parties involved. The competitive landscape of cryptocurrency is going to eventually boil down to coercing user and investors, particularly as currencies become more than just a function of exchange speculation. TRON is a good example of a currency that has been proactive in recruiting development and users to the new launch of Main Net. IOTA appears to be following a similar path, by creating a reward system that encourages investors to participate in facilitating network features, as opposed to just hoarding the coins. Likely, through Qubic, IOTA users will be paid a small portion of a coin for operating Tangle, or else they might receive some special preference in conducting transactions. Either way, Qubic seeks to incentivize both user participation and network functionality for IOTA.
While IOTA has already made a strong case for its presence in the top ten market capitalization of cryptocurrency, Qubic could be the added push it needs to attain a top five spot. The addition of smart contracts is a significant feature that will be difficult to appreciate in the near-term, hence the lack of price movement following the Qubic press release. However, with the combination of industry-leading scale in Tangle and the presence of network features through smart contracts, IOTA is building a strong case for a currency targeting genuine innovation as opposed to being another re-hashing of Bitcoin.