IOTA Ecosystem

Status Quo: IOTA or Shimmer?

By IOTAWeekly

Hey guys, this is Chris Müller, the host of the IOTAWeekly YouTube channel :). Almost exactly one year ago, I deactivated the channel for the time being because my professional obligations simply did not allow me to spend so much time creating my videos anymore; and this decision was the right one given the amount of work involved.

As mentioned back then, I’m still a big fan of IOTA and have been thinking about writing some articles about IOTA and Shimmer if videos are too time-consuming. Depending on the feedback, I will try to continue doing this.

For the occasion, I would like to briefly explain what Shimmer actually is and what it has to do with IOTA.

7 Years of IOTA in 3 paragraphs

Almost 7 years ago, IOTA entered the scene as a competitor to Bitcoin with the goal of enabling microtransactions not only quickly and securely, but also for free, thus paving the way for Industry 4.0, digital identities, and the Internet of Things — all without mining and fees. To secure the network in the early stages, the so-called Coordinator was introduced — a computer that ensures the security of the network against hacker attacks until the network itself is resilient enough. Of course, such a central computer is an absolute no-go in a decentralized system, where there should not be any dependence on centralized entities, which is why the Coordinator should be eliminated (the infamous Coordicide) and replaced by a decentralized decision-making system. With this promise and numerous partnership announcements, as well as the founding of the IOTA Foundation in Berlin under German regulation, IOTA launched in late 2017 and reached its all-time high.

Fast forward to today: April 2023 — and the Coordinator is still running! Over the years, I have spent a lot of time explaining the developments at IOTA, and to make a long story short: it took a lot of work by researchers and programmers within (and also at universities outside) the IOTA Foundation to be able to announce that the theoretical breakthrough has not only succeeded (the experienced ones think of “We did it”), but has also been embodied in code.

Of course, anyone can claim that, which is why it is necessary to show the world that IOTA 2.0 — without Coordinator — really works. And that’s exactly what the IOTA Foundation wants to do with the Minimum Viable Product (MVP): a kind of demo version with all the core functionalities that make up the heart of the new network. This first version of IOTA 2.0 will be released in a few weeks, so that everyone (critics) can try to prove the IOTA Foundation wrong.

What does this have to do with Shimmer?

Currently, there are tokens worth over half a billion dollars in the IOTA network — if the network were simply updated to IOTA 2.0 without extensive testing, the consequences in the event of a security breach could be more than disastrous for people’s deposits (and for the project as a whole). Over the years, there have been many test networks, but they all only had worthless tokens available for “playing around”, which made the incentive to hack the network and steal tokens very low. Enter Shimmer!

Shimmer is the staging network that not only demonstrates new functionalities but also comes with a valuable token (available on Bitpanda, Bitfinex, and Ledger hardware wallets). This allows hackers to exploit alleged security vulnerabilities and prove that the network is insecure, stealing Shimmer tokens in the process. Shimmer is used to test the new features of IOTA 2.0 and prove the technology’s security.

New functions not present in “old IOTA” from 2017/2018 include:

  • Instant transactions without fees
  • Shimmer EVM-chain: the beta version recently started, and after running securely for a few weeks, this feature will be unlocked in the regular Shimmer network, making thousands of Ethereum apps compatible with Shimmer almost instantly.

All of these functions already work on the Shimmer network and will be added to the IOTA network once they have been sufficiently tested. In 2023, the following features will be added:

So, buy Shimmer or IOTA?

It’s difficult to answer whether to buy Shimmer or IOTA, and this isn’t investment advice.

Shimmer will always receive the latest functionalities first, leading to increases in value (especially with Coordicide on the horizon which will be first conducted on Shimmer successively), but there is also the risk of security vulnerabilities which might be painful due to the token’s value.

IOTA, on the other hand, has never been hacked in all the years since its creation. In the near future, there may be price jumps in Shimmer, but both coins will soon have something magical in store, according to IOTA CEO Dominik Schiener who visited Dubai last month:

Dominik Schiener on Twitter: "Time to make some magic happen #IOTA #Shimmer pic.twitter.com/uxaoV8GFv3 / Twitter"

Time to make some magic happen #IOTA #Shimmer pic.twitter.com/uxaoV8GFv3

The unique features of Shimmer/IOTA:

  • No transaction fees (only a deposit, which is returned when no longer needed, is necessary to protect against malicious attacks, more information can be found here)
  • Extremely easy creation of L1 tokens and NFTs

TL;DR

Those who claim IOTA is a scam should review the developments in the IOTA Foundation’s blog posts over the years (see here for Q1/23). The network has steadily evolved and delivered new features without ever having funds stolen due to a network error.

While the coordinator still runs, the majority of work in the IOTA Github repositories focuses on cleanly implementing already finished solutions. IOTA is not the millionth Bitcoin copycat but an unprecedented architecture that had to be realized with minimal resources (the IOTA crowdsale raised only about $500,000).

The potential is enormous.

If more info is needed, just comment or contact @ChrisMuellerHI on Twitter.

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