Hello IOTA Weekly Roundup #86

Notes by @MudKevin.

1. Introduction

   1. There has been a Hello IOTA Roundup break, as Chris was traveling
   2. Where are Dominik Schiener’s AMA and IOTA Talks videos?
      1. Dom announced on Twitter that there was so much to do lately, that he cannot do them weekly, but will move to once a month.
      2. A pity, but the community should understand the increased workload as several projects are happening in the coming weeks.

2. Exchange delays in migration: so far Bitfinex and Binance cannot deposit or withdraw iotas.

   1. Dominik commented “Bitfinex should resume shortly, Binance we’re helping with the migration and their integration should also be finalized, Bitpanda is waiting for the Ledger migration, Huobi/OKex/Upbit are doing the integration right now.”
   2. Bitpanda has since listed IOTA as fully operational-so you can do deposits or withdraws.
   3. These delays were unexpected. Charlie Varley said that “various technical details and nuances only presented themselves at the last minute.” Dom said, “even with 1 month extra time, they needed more time.”
      1. Quite annoying, but if you need to deposit or withdraw funds you can still use other cryptocurrencies as a bridge.
         1. For example, send Bitcoin to an exchange and then trade for iotas, or sell iotas for a different cryptocurrency if you want to withdraw.
         2. Actual trading is unaffected-you can still buy and sell iotas on all the exchanges.
      2. There has been some anger, because it was announced differently, but the IOTA Foundation cannot impose decisions on exchanges.

3. Ledger Nano update

   1. Charlie Varley explained that the app has been completed and accepted by Ledger, and the basic Firefly integration is complete
   2. Now working on Chrysalis migration and polishing the UX/UI
   3. Will soon be testing with the X-Team
   4. Aim to release in May
   5. Those who were wanting to sell should have already moved out of the Ledger, as it was announced that there would be a delay of several weeks before tokens on Ledger Nano could be migrated

4. Everything Tangle video is available again. In three minutes, it does a great job of explaining the importance of Chrysalis and why it is such a big deal.

   1. Please share on social media-really worth it. Chris also translated it into German.

5. The IOTA Roadmap has been updated!

   1. This topic has been explosive, since the IOTA Roadmap has not always been kept up to date.
   2. The new roadmap dispenses with estimated release times. Some will cry scandal, but Chris’ opinion is that it is more important that products be released as perfect as possible, and not as fast as possible.
      1. Every software developer will confirm that things usually get delayed.
      2. More important to work on the project than to record every change
      3. We have seen that the IOTA Foundation does deliver
         1. Pollen, Chrysalis, and individual frameworks on the second layer have stayed within the time frames, approximately, with no projects being canceled.
         2. We now have a stable 70 transactions per second, with more than 1,000 tps successfully tested already.

6. The next big milestone is already in the starting blocks: Nectar!

   1. It was decided to not release a research update, so work can continue unabated
   2. Nectar is very important-not merely another test network
   3. Pollen was the first version in which IOTA worked without a Coordinator
      1. Nectar is the evolved version, with more features.
      2. Nectar will be the first version of Coordicide, that will have all features, such as Mana and Fast Probabilistic Consensus, implemented.
      3. With Nectar, all the people that don’t believe IOTA won’t run without the Coordinator will be able to try it out and decide for themselves.
         1. The Coordinator is rightly the biggest criticism of IOTA, because without it the network will stand still, and because of it the network can be shut down at any time.
         2. With Nectar, IOTA will make it clear that IOTA is now, in May or June, advanced enough for Coordicide to be feasible.
         3. Coordicide is coming towards the end of the year for a reason-because there are still many things that need to be tested and finished implementing before then.
         4. Nectar will NOT offer all the features of Coordicide from day one.
   4. Angelo, one of the masterminds working on Coordicide, said on Discord:
      1. Nectar means GoShimmer is evolving from Pollen to a more feature-complete Coordicide version
         1. That does not mean all of the features will be there
            • Consider Nectar a prototype, an MVP for Coordicide
         2. Nectar will progress as Pollen did, with continuous testing and development
      2. The incentivized part of this testnet will be added gradually, not from day one
         1. Congestion control and a dynamic global snapshot (the ability to save the ledger state and reload it between network upgrades) will most likely be there.
         2. Improved UX/UI (User Experience/User Interface) will also most likely be there
         3. Other features, such as reorg, mana integration with dRNG (decentralized random number generator), adaptive rate control and local snapshot (and others) will be progressively added on top of Nectar with future releases.
   5. The point is to test everything properly, so the actual Coordicide can be done easily.
      1. You could say that Coordicide has begun with Nectar
         1. All features will be implemented here, and will be completed before the final Nectar transfer to the main network (Honey)
   6. This is a huge milestone, that will gradually take the wind out of the Coordicide’s Consistent Critics’ sails (assuming everything works, of course)
      1. Given the amount of research that has gone into it, and the countless tests and simulations (with very good results), I am very confident.

7. If you want to read something that explains, in an easy-to-understand manner, how IOTA works compared to Bitcoin, you should read the article The Chirping Machine, which explains how transactions are processed in the IOTA network, and why it is so effective. It concludes,

   1. Considered this way the drawback of Bitcoin was that it did not go far enough. IOTA is unique in many regards, but especially in this fact that it expands on the principles of Nakamoto consensus to build a fee-less, leaderless protocol of parallelized ledger updates, that scales with an arbitrarily large set of validators. Because all nodes collaborate in consensus mining races are eliminated and the networks computational power is used to secure the network in the most efficient and decentralized way possible.
   2. The article also explains why in IOTA, “In order to come to consensus nodes only to keep track of the messages which prove the current ledger state. Once a new state is confirmed nodes can prune old information which is not needed to detect a conflict. A distributed ledger is a truth telling machine, not an infinite archive.”
      1. This addresses the question of how IOTA stores all the ledger data.
      2. This question ties into the update on IOTA Chronicle, with which companies can store relevant data in such a way that it still remains verifiable in a decentralized manner, without storing all the data from all the companies.
         1. For the functioning of IOTA as a base-layer, it is just important that the transferred tokens really correspond to what can and may be transferred, so no one can appropriate money illegally.
         2. As I said, please read the article, then some things will certainly become clearer.

8. Interesting news from IOTA member, Dan Simerman

   1. An introductory article on Decentralized Finance on U.S. News explains what this topic is all about, and Dan was also interviewed here.
      1. If you would like to know what the topic is all about, please read this article.
   2. Dan will be a speaker at an interesting conference
      1. Next week is the Blockchain in Banking Conference, hosted by Black Arrow, and Dan will be there talking about the role of DLT in Financial Services
         1. IOTA and banks? This sounds promising! Should be interesting!

9. Those wanting to learn more about the technical aspects of IOTA should mark two dates

   1. May 20: There will be a meetup at Blockchain Drenthe in Holland, where it will be shown how to use IOTA in the area of Self-Sovereign Identities and how to implement it concretely in node.js
   2. June 25: In Germany there will be a Blockchain Symposium Hoschschule Heilbronn university. Holger Koether, IOTA director of partnerships, and partner companies Pickert and EDAG will be there to talk about their use cases. Chris will report on that.

10. Dell published an article on CIO.com stating that Project Alvarium is developing very well, and also discussed in a video conference what this project is all about.

    1. From the Video
       1. “We created a technology at Dell known as a Data Confidence Fabric, or DCF, and today I want to talk about how that technology can help influence, in a real-world way, a personal data silo.”
          1. Before explaining how to solve the challenges of a personal data silo, I would like to describe an IoT and Edge environment, in which a DCF was first invented.
             1. If you look at the picture, we have an IoT sensor that’s creating data
                • Running alongside the data path from the sensor to the gateway to the server to an application in the cloude, we have a distributed ledger.
                • In this example, that distributed ledger is the IOTA Tangle.
             2. When data is born at the sensor, it is registered in the IOTA Tangle. It is given a score, and as the data travels from the sensor to the gateway, and towards an application, a ledger entry is created for each stop.
             3. When the application looks at this information, it also has the sidecar that has traveled along with it, that allows the application to know whether or not the data is trustworthy.
          2. While this invention was created in the context of IoT and and Edge ecosystem, let’s turn around and go the other way, and think about it as a personal data silo.
             1. If you replace the sensor with a human, or a consumer that is creating data, that consumer immediately registers the fact that the data is theirs, they are the owner, and any other meta-data that they would like to attach with it.
             2. Instead of sending that data immediately out of their silo, the customers can first allow applications to come in, and every time an application touches that data, a new ledger entry is created, so now the consumer has much more control over the access and visibility and transparency of what’s happening to that data
             3. We think that if we can standardize a data confidence fabric in the industry, this will allow consumers to only let the data out of their personal silo if the application they give it to is also participating in a trusted data confidence fabric.
          3. In general, we at Dell are pushing to standardize Data Confidence Fabric technology, not only for the IoT edge, but as a long-term play in implementing personal data silos.
    2. Chris: “This is really awesome! I’m really, mega-excited to see when this will be ready for industry. This is a huge use case that can, and will, be used in millions of places. Awesome!”

11. Two more announcements from the IOTA Foundation

    1. Beta version of Identity framework has been released (blog post).
       1. Chrysalis and Stronghold are supported, to make the whole thing secure
       2. The World Wide Web Consortium (W3C) standards for Decentralized Identifiers (DID) and Verifiable Credentials, already used in the alpha version, existing standards from the Decentralized Identity Foundation and from the Hyperledger Aries Foundation are also supported
          1. Thus, you can use IOTA Identity as a building block, and make it interoperable with other identity solutions by using the standards
       3. What are these verifiable credentials?
          1. These are digital statements about an identity aspect like “name,” digitally signed by another identity, that has authority on the subject.
             1. For example: My bachelor’s degree is trustworthy if a university signs it, but not so much if it is signed by your mother.
             2. Such statements make data reliable and valuable.
          2. Verifiable Credentials allow a Self-Sovereign Identity (SSI) solution to not just be more privacy-friendly, but also compete with Facebook/LinkedIn profiles as they are more trustworthy and accurate.
       4. We enable IoT devices to build a reputation and become trustworthy. We can then leverage the data provided by the devices to make decisions.
          1. Think about the traffic flow in a city:
             1. Right now, a city only trusts sensors it has deployed itself to determine traffic flow.
             2. Imagine how much more information, and in turn higher precision, could be achieved if cars can identify themselves and share their generated data.
                • This would constitute the groundwork for a trusted data economy, enabled by IOTA Identity.
                • Without providing for an architecture that enables the creation of trust, anyone could fake traffic data and cause havoc in an automated traffic system relying on external data.
                • Trusted identities therefore are the basis for making any use of any data that is being generated. Any digital system benefits from trust, not just traffic systems like in the example above.
       5. Chris: This framework offers so much potential! Think about how many devices this could be used for
          1. It becomes clear why a network like this not only needs to be scalable, but also needs to be permissionless, because a wide variety of providers need to communicate with each other.
          2. The long development time is now paying off!
             1. Complicated processes like creating a digital identity, or identity messages can now be created with a single line of code, which should be a real feast for developers, especially because you do the work for your own app, but it can then interact with apps from other providers through the message protocol.
             2. This opens up so many use cases, from opening the car door, to ordering pizza, to enrolling in college, verifiable from any state in the world.
             3. All of this is possible based on IOTA, without having to pay any transaction fees! Niiiice!!
                • A bit of pride comes through in the blog post too. “While IOTA Identity is not widely known yet, with the beta release we are closing in and even overtaking some of the popular SSI frameworks in quality and feature sets. We will continue to focus on developing an amazing framework that is secure, performant but also easy-to-use.”
             4. It’s really exciting to see what is going to develop here. “If you are interested in working with IOTA Identity, please check out our repository and consider joining the IOTA Identity X-team, where like-minded developers, entrepreneurs and students meet on with IOTA Identity devs on a weekly basis to discuss the framework in a relaxing yet educational atmosphere.”
    2. There was a blog post about the IOTA Community Treasury and the IOTA AS Fork.
       1. Already explained in the last video, that over the course of the last few years, more than $100 million worth of iotas have not been claimed
          1. Meaning people have bought the tokens at some point, but never picked them up
          2. If you still have tokens you have not claimed from previous years, you need to go through the claim process here.
       2. All of these tokens are in a pool of previously-unmigrated tokens. The question is, What do you do with them?
          1. The tokens can remain in the pool to see if they are claimed sometime. This is what will happen in the IOTA AS Fork.
             1. If the majority of the community votes for this, then everything will be “as-is” with the tokens
          2. If the community opts for option B, then the tokens will either be transferred to a community fund, which could be used to fund cool projects, or they could be burned once and for all.
             1. We’re using the total supply of IOTA tokens by more than 60 Ti
             2. Some may not know that both projects are already running in parallel. If you want to connect to the IOTA AS network, simply reach out to node operators on Discord. To provide both networks a fair chance to succeed, migrated tokens from the legacy IOTA network will be migrated to and are available on both forks. The IOTA Foundation will continue to operate the IOTA AS network until May 31^st, but leave it up to the community to form a group to continue the maintenance of the IOTA AS network further.
                • This means the community would have to adjust their nodes if they want to use the new network, and companies, etc. would have to as well.
          3. With the Community Treasury, everyone could make suggestions for what they would like to have financial support for, and then the community could vote on it, in a completely decentralized manner.
             1. Voting sounds cumbersome, but is probably technically-feasible.
             2. Other DLTs, like PolkaDot, already have solutions running
          4. When and how will this take place?
             1. Exact details of how the governance vote will function are yet to be defined and need to be agreed on by the broader community.
             2. In principle though, every IOTA token holder on the upgraded Chrysalis network would be able to participate and vote for their preferred option with their token holdings.
             3. To enable everyone to participate in the vote, we will at least wait until the major Exchanges resume operation and the Ledger Nano integration in Firefly has been completed, as well as giving users a few additional weeks to migrate their tokens to the Chrysalis network and participate in the vote.
             4. We expect the governance vote to happen through the Firefly wallet and will notify the community well in advance with further details through all our public communication channels.
          5. Is this even legal, to use tokens that actually belong to other people? On the other hand, people have had years (and now again until mid-June) to claim their tokens.
             1. According to the blog post, lawyers have already reviewed the proposal and given their approval.

12. “One other thing”

    1. The interview with investment expert, Dave Lee, and Dominik Schiener: 71 minutes of interesting questions!
    2. Three aspects for the Roundup: what Dominik said about the IOTA Foundation and how it is financed (newcomers always interested in this).
       1. Dave: I understand users donated 5% of the initial supply. Are you still running off of that money?
       2. Dom: the Foundation is funded primarily from an Endowment, which consists of donations from the community back in 2016. We told the community, if you want to have a dedicated identity behind the project, you can donate iota tokens. About 5% of all tokens were donated.
          1. That’s how we got started, and how we are still running.
          2. Over the years we have also received funding by the government and grants.
             1. About 10-15% of our yearly run rate is currently funded through grants.
             2. We are thinking of other ways so we don’t have to touch our endowment
       3. Dave: What percent of the overall supply is left in your endowment?
          1. Dom: I think it is roughly 2-2.5%
          2. Dave: How long will that theoretically last. I realize a lot will depend on the price of IOTA
          3. Dom: Right now we can run nearly a decade with the funding we have, and right now we are really thinking of how to get external funding into the Foundation so that we don’t have to run on that.
             1. We are doing bigger projects, for example in East Africa, where we get funding from partners.
             2. We are really thinking about doing joint ventures with bigger companies so that we have businesses that generate profit and can return profits to the Foundation.
             3. Sustainability is a big focus, but right now we are really focused on expansion-we currently have about 30 job postings at jobs.iota.org
       4. Chris: It seems the Foundation is doing well. I think it’s great that the money is being reinvested to expand and accelerate smart contracts development, for example.
          1. There was confusion the other day: Evaldas said on Discord that Smart Contracts could be delayed until 2022. Dom then clarified that with new developers the timeline could be accelerated.
       5. Dave Lee: What can you tell us about Smart Contracts on IOTA? What’s the timeline, and how are they different than, say, an Ethereum Smart Contract?
          1. Dominik: You can think of our smart contracts like this: if you think of Ethereum 2.0 or PolkaDot, we are essentially running multiple Ethereums on top of IOTA.
             1. What the base layer does very well is global consensus and secured smart contracts
             2. On top of that you can build an independent network, which we will call IOTA Smart Contracts, and each smart contract has its own consensus, its own network—it is sort of sharded. What is very exciting is that these smart contracts are basically scalable in their own domain.
                • Think about running one Ethereum Virtual Machine on top of IOTA that currently has a TPS limit of around 20 transactions per second.
                • You could launch thousands of these Ethereum Virtual Machines on top of the IOTA ledger (simultaneously). What the base layer enables is the security of these smart contracts, so they cannot be tampered with, and interoperability, so that one smart contract can interact with another smart contract chain, transferring assets and data.
             3. A simple explanation: in Polkadot you have relay chain and parent chains. We are big fans of how they have built up their network. Ethereum 2.0 also has a similar approach. This is basically our answer of saying, “We did not have smart contracts yet, but we can leverage IOTA in the best possible way and are able to learn from the smart contract architecture of others to come up with the best possible solution.”
                • We have been working on this for the last year.
                • We have an early alpha version, allowing you to deploy local smart contracts.
                • By summer we will have a new, beta version where you can deploy smart contracts more reliably, and then we will port over Ethereum Virtual Machine.
             4. Our big objective is to come up with an exciting solution for the market this year, so that developers can start building on top of it.
                • We are going to see some dApps in DeFi, and NFT marketplaces, and auctions and stuff like that all being built on top of IOTA.
          2. Chris: I admit, I had forgotten just how big the folks at the IOTA Foundation are thinking
             1. If Coordicide works, it will extremely revolutionize distributed ledger technology
                • Imagine dozens of Ethereum block chains running in parallel on the IOTA Tangle, and being interoperable too-that’s insane!
                • I think a working smart contract architecture will be a game-changer for IOTA. Nobody else offers anything like this.
       6. Dave Lee: I agree with the premise that as machines proliferate, get smarter, and are more connected, you have a huge economic opportunity in machine-to-machine economy, especially as machines get intelligent and make their own decisions. Can you expand or share your thoughts on that trend?
          1. Dominik: you are absolutely right. The way our economy is moving forward, and we get this feedback from big companies, that the business model of today is not going to be the same business model tomorrow.
             1. An automotive manufacturer might not be sharing cars tomorrow-they might be operating sharing fleets.
             2. An electricity company may not sell electricity off the grid, but may tokenize their solar parks, making it investable
             3. Our technology is focused on enabling monetization of assets that are locked today. I think the biggest locked asset today is data.
                • You mentioned before that I should be able to sell my data and monetize it. That is a big focus of ours-enabling the data economy so machines can be monetized and can become even smarter by buying and acquiring data from other machines.
                • I think data economy is a very important focus of the future.
                • In the future the core will be a data marketplace that provides data to smart contracts, that provides autonomy and automization.
          2. Other than that, our big focus is to enable new machine use cases
             1. How do you make it possible for an electric vehicle to have a wallet, so they can be paid for getting you from A to B, so you can have an autonomous sharing fleet?
             2. Where DeFi and Smart Contracts come into place is that you can tokenize these assets and make them investable
                • If I want to invest in solar, or in a sharing fleet, because I believe in them and think there will be a return on investment in the next five years, tokenization is at the core of that.
                • Smart Contracts, DAOs and DeFi are also at the core of that so you have new financial models.
             3. Many companies are excited by the prospects of DeFi for IoT. You have new ways to finance your expansions, new ways to finance your operations
             4. I think our role at IOTA is to play a crucial role in getting DeFi more into the traditional world, so that we work with industrial companies and basically build bridges off of them to benefit from these new opportunities.

13. Conclusions

    1. It’s really great to see how Dominik is developing as a leader—he is only 24 years old—it’s just crazy!
    2. Thank you for all the likes, subscriptions, shares, and comments. The positive feedback is very motivating. [Click on the video and give a like!]
    3. Have a great week, and we will see you next time for Hello IOTA Roundup #87!