IOTA: The Next Generation Blockchain (Or Not?)

Cryptocurrency updates are making headlines across the globe, and there’s something new happening in the industry daily. Digital coin enthusiasts believe that there’s more to come and that the industry will grow, eventually changing how transactions are completed with the traditional currencies. It seems that we don’t need to wait much longer as the future is already here. Experts believe that the integration of the internet of things (IoT) in the cryptocurrency technology is a brilliant idea.

The IoT has been incorporated into different products across several industries in recent times to make things easier for man. It isn’t surprising that the technology is now utilized in the cryptocurrency industry. The project which is popularly referred to as the blockchainless blockchain is aimed at providing crypto traders with a more secure and open market for conducting transactions faster and easier.

The project is named IOTA and has been publicly described as the next generation blockchain by its developers. However, whether cryptocurrency researchers and observers agree that IOTA is the so-called future of the blockchain space is highly debatable. The developers also asserted that the project is designed to rid the blockchain of all the issues currently faced by individuals who invest and transact through it.

The co-founder of IOTA, David Sonstebo has previously discussed that the new project is the first to go beyond the blockchain, thus eliminating the issues previously encountered with regards to miners as well as solving the major issue faced by investors which are the removal of the need to pay a transaction fee. Some cryptocurrency researchers argue that the company can’t substantiate this claim.

In other instances, the IOTA team of developers haven’t handled criticisms very well, especially those that have to do with the security holes in the project. The project received a warm welcome from many tech enthusiasts who believed that it’s really the future of the blockchain space, but shortly after, the negativity started to creep in. It’s reported that negative remark on the IOTA technology started last September after a group of researchers from DCI (Digital Currency Initiative) operated by MIT discovered something they believe to be a hole in IOTA’s code.

Is IOTA Coded Correctly?

The researchers reportedly argue that the developers of the project used a hash function known as P-Curl created in-house to secure the data on the system which isn’t accepted among cryptographers because it has not been studied and understood compared to those that are already in use in the cryptocurrency industry. Meanwhile, IOTA team of 150 developers and cryptographers stated in reply to the MIT researchers that their decision to use P-Curl is, in fact, intentional to block out other developers who may want to copy their open-source software.

Researchers have failed to make any sense out of this argument tendered by the IOTA team, as the basis of open-source software is to provide other developers with the opportunity to copy the technology freely. Other researchers believe that the project is vulnerable even with the hash function. However, the team didn’t take these criticisms well as Sergei Ivancheglo the co-founder of IOTA tweeted threatening remarks target at Ethan Heilman, a Boston University researcher who reported the vulnerability in the hash function.

Ivancheglo’s tweet made headlines and was a topic of discussion during the Financial Crypto 2018 conference which was held in February. Although this is nothing new in the cryptocurrency space, many researchers and observers argue that a threat of lawsuits may negatively affect and undermine the cryptocurrency space. This is because researchers try to analyze the actual state of projects and not just what the developers claim it to be thereby making thing more secure for both investors and developers.

Users and researchers may immediately report bugs when they notice them, which will invariably lead to a timely fix thereby preventing loses and inconveniences but this will not be possible if the developers are threatening lawsuits. For this reasons, cryptocurrency experts have entertained doubts with regards to the success of IOTA. The question of IOTA’s success can’t be asked without inquiring about the faith of its investors and users that are supporting the network with about $5.8 billion by market capitalization.

Is $4 Million in Losses Okay?

Other reports have revealed that although there’s no data stating that IOTA investors and users have lost as a result of the in-house created hash function, investors have lost a substantial sum of cryptocurrency amounting to $4 million as a result of what crypto observers believe to be ineffectiveness on the part of the developers. These observers argue that IOTA’s wallet didn’t feature a seed generator which was supposed to help investors and users to create keys that will be used to control their coins.

IOTA team of developers always have excuses to offer, and on this, they argued that the foundation provided users with a list of websites that are secured, but some users decided to visit websites that were not listed. They added that these naive individuals unknowingly gave their private keys away to the operators of the fake websites who stored keys that were created by users and then used it to steal their coins.

This argument didn’t absolve IOTA foundation from the blames as researchers argue that it’s the fault of the foundation that the funds were stolen as it should have taken steps to ensure that its official wallet featured a seed generator. Other observers have attributed IOTA’s failure to create a seed generator to malice as it’s something that should have been done with just a line of a simple code.

The code is short and straightforward, and yet it would have prevented the theft of the funds of IOTA users and investors. It’s believed that the failure of the IOTA foundation to accept liability for errors that are as a result of the vulnerability of its technology will undermine the project and scare aspiring investors away. These vulnerabilities and setbacks have given cryptocurrency enthusiasts a course to think that IOTA may not be the next generation blockchain its developers claim it to be.

The IOTA foundation may have made a massive mistake by not including a seed generator in their software, resulting in thieves figuring out a way to rip-off customers and investors, but is this really the negligence of IOTA or the people who trusted 3rd party sites with vast sums of money. When will people learn? There are always people looking to steal from us. If you give your private key away, or in this case your seed, what should one expect?

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