TechFlow: Sunny
IOTA: Dominik Schiener
"IOTA today is much more than just being called an IoT chain."
--Dominik Schiener, IOTA Co-Founder
IOTA may seem very unfamiliar to those who entered the circle during the last bull market. For those who entered the circle before 2017, IOTA was once the "10,000-fold coin" that broke into the top ten of Coinmarketcap and attracted much attention. It focused on building the blockchain base of IoT for large enterprises and governments.
At the time, IOTA was criticized by MIT's Media Lab for developing a "blockchain" without blocks and chains, and was described by scholars at Israel's Hebrew University as "IOTA is a currency I love to hate." A TechCrunch reporter wrote a cool article mocking IOTA, and the original founding team also had a big fight on public social media.
Controversial projects all grow amid external accusations and pressure.
After a bull-bear cycle, are the old projects still there? In yesterday's communication with IOTA co-founder Dominik, I learned that he had just moved to Abu Dhabi in the Middle East and was pushing for applications on the IOTA 2.0 Layer 2 network and real-world asset on-chain. "We got rid of a lot of negative factors, including our technology, some co-founders, and the disputes among them," Dominik said.
Speaking of disputes, of course it was normal for members of various project teams to fight with each other in the early years. Ethereum founder Vitalik once revealed that the success of the Ethereum project came from firing unsuitable employees and founders, and that one must believe that the technology is correct.
Today, IOTA not only reflects on past mistakes in decision-making and technology, but also repositions IOTA: it is not a blockchain project that is purely IoT-oriented, but a general chain that is compatible with Ethereum.
It seems that when everyone is entering Layer 2, IOTA is no exception, but they are more ambitious and decided to build IOTA into a public chain benchmarked against Ethereum, and take the government and large enterprise business route. Not only in the Middle East, IOTA is also stationed in the European Union and Africa, and through strong cooperation with the government to achieve their goal of "Digital Autonomy for All."
The following is a summary of an interview between TechFlow reporter and IOTA co-founder Dominik Schiener.
TechFlow: What is your background and story of founding IOTA?
Dominik:
I have been involved in the cryptocurrency space since 2011 and have been working in the industry full-time since 2012. Initially, I started with mining and later had the idea to create a cryptocurrency exchange. I joined Crypto Valley in Zurich to contribute to its development and friendly regulatory environment. However, our efforts were not successful. During the bear market of 2013-2014, I lost a lot of money. At that time, I was still young, only 18 years old, and was very obsessed with cryptocurrencies. My interest turned to Ethereum and I improved my skills through connections with Ethereum founders and participation in Vientiane Blockchain Lab activities, where I won the largest blockchain hackathon in 2016.
I co-founded IOTA in late 2015. IOTA’s core philosophy has two main aspects.
First, we realize that blockchain itself has limitations in scalability.
It suffers from high transaction fees, energy consumption, and control of the network by miners. We realized that we needed to invent a new architecture that could overcome these limitations and move away from the single-threaded blockchain.
Instead, our goal was to create a multi-threaded architecture, similar to the development of microprocessors. The idea was not to have only one core to execute transactions, but to have multiple cores to handle as many transactions as possible. This led to the concept of the Tangle, and in 2015, we were the ones to invent this new architecture.
The second goal was to explore new application scenarios. At that time, blockchain was still a relatively new concept, and few people knew about DeFi, NFT, or tokenization. Everyone was exploring various possibilities, and the direction was very broad.
IOTA is taking the lead in driving blockchain adoption by working with large companies, governments and enterprises. To achieve this goal, we have established a German non-profit foundation and are seeking regulation. Our goal is to help large companies integrate IOTA and develop various use cases in areas such as mobility, energy, trade and logistics, digital identity, smart government and smart cities. In 2017, when blockchain adoption was low, IOTA stood out as a pioneer and demonstrated the potential of the technology.
TechFlow: What happened after 2017, in the face of a lot of public criticism directed at IOTA and its team?
Dominik:
Between 2018 and 2020, I would say we redefined the purpose of IOTA and eliminated some of the controversies.
For IOTA, we started from scratch:
We only raised $500,000 during our ICO in 2015.
We don’t have a big treasury reserve like other projects do because other projects use a large portion of their token supply for themselves and then they have hundreds of millions of dollars to invest in marketing and growth.
IOTA is really a community project. Starting from nothing and gradually becoming very large means that a lot of money and power are involved. Therefore, opinions among the founders often differ, because many of them don't even have experience with big companies or big projects.
They are also first-time entrepreneurs, so to speak. So that means they change as they go along. If people change, there will be some conflict because everyone has their ego, but everyone has an incentive to make things bigger.
So there were different opinions. So the quarrels between them started. Compared to Ethereum, unfortunately, the controversy of IOTA leaked to the public, because I also know that there were a lot of controversies this year, especially in the early stages, but they (Ethereum) kept the controversy private.
So with IOTA, they promised to make everything public, and the arguments were in the public eye. That’s why people used to associate IOTA with controversy.
This is why we need to change this and make sure we stay true to achieving the true goals of IOTA.
What we did then was obviously reposition IOTA in the market and get rid of the bad things about it, including the technology we had at the time, which was very difficult to use, very cumbersome, for example, you could only use an address once and so on.
TechFlow: So, how has IOTA changed from before?
Dominik:
When you think about IOTA today, you shouldn’t just think of it as a project that’s only applicable to the Internet of Things.
We changed other bad aspects of IOTA, like the board of directors, and dumped some of the founders.
Between 2020 and 2022, we are focused on improving the protocol of IOTA so that it is not just limited to IoT, not just limited to enterprise use cases, but allows us to implement DeFi, NFTs, and have smart contracts, making IOTA compatible with the Ethereum Virtual Machine (EVM).
In 2022, we launched ShimmerEVM, an evolution of IOTA, as a testbed before product launches on the IOTA network. Recently, we announced ShimmerEVM, a second-layer network fully compatible with the EVM, which will soon be available on IOTA. The evolution of IOTA has transformed it from a difficult-to-use chain in 2015 to a highly scalable network with one-second confirmation times and thousands of transactions per second (TPS). It is now also compatible with the EVM, making it possible to integrate DeFi and new use cases on IOTA and Shimmer.
Our next phase, IOTA 2.0, will introduce a leaderless consensus algorithm, a staking mechanism for network security, and a fully scalable and decentralized network. This major update is scheduled to be released early next year to establish full competitiveness with Ethereum. In addition, we are working to introduce smart contracts on our first layer to enhance practicality and shared security. Our technical roadmap is supported by a professional team of about 110 people at the IOTA Foundation, and has undergone extensive peer review and collaboration with renowned institutions such as Imperial College and the University of Zurich.
The Shimmer EVM has already attracted several major projects with a total value locked of approximately $2.5 million. The network is still in early development and bootstrapping. In the next phase, our focus will be on adding more bridges for liquidity and expanding Shimmer listings on other exchanges.
TechFlow: After the repositioning, has IOTA’s government and enterprise strategy changed?
Dominik:
IOTA excels in practical applications and is involved in projects such as building European blockchain infrastructure and developing digital trade infrastructure and digital identity in Kenya.
Our focus is to position IOTA as the ledger of choice for digitizing trade and establishing transparent supply chains. In addition, we are actively working on tokenization, starting with US Treasuries and expanding to real estate and other securities. We believe this will attract new users and create new financial markets on the blockchain. Obtaining regulatory approval and working with governments is a key aspect of our strategy and we have a dedicated team working on regulatory affairs and building partnerships with governments. While IoT is an important part of our application space, our scope is much broader and covers multiple use cases such as digital identity for humans and financial applications. Currently, we are focusing on major IoT use cases such as digital identity for machines and product passports.
TechFlow: What use cases do you think IOTA is currently exploring that have positive social significance?
Dominik:
Trade finance is a really exciting use case, especially in promoting financial inclusion. Our goal is to create liquidity pools that support farmers in countries like Kenya and Tanzania, enabling them to export goods and get financial support. By leveraging blockchain technology and our capabilities, we can empower people and provide banking services to the unbanked. We are actively working on projects in this space and will make it one of our key focus areas in the future.
reference:
https://techcrunch.com/2018/08/09/cryptocurrency-insecurity-iota-bcash-and-too-many-more/
https://www.media.mit.edu/posts/iota-response/
https://www.coindesk.com/markets/2018/04/14/iota-the-37-billion-crypto-developers-love-to-hate/
https://www.crypto-news-flash.com/iota-drama-cofounder-threatens-legal-action/
https://shimmer.network/
https://www.iota.org/