Photo: Rachel McIntosh
The first part of an exclusive interview with Dominik Schiener on the technology and the future of the coin.
2017 was a big year for IOTA. Following the November announcement of plans to build a data marketplace with more than forty participants–including Microsoft, Volkswagen, and Fujitsu–the value of a single IOTA token skyrocketed from around $0.70 to over $5.30.
IOTA was created in 2015 by David Sønstebø, Sergey Ivancheglo, Dominik Schiener, and Dr. Serguei Popov. Finance Magnates sat down with IOTA co-founder Dominik Schiener to speak more in-depth about the announcement o the technology powering IOTA and the IOTA Foundation’s plans for the IOTA network in 2018.
So there are two sides to the story. First, let’s start with where we are right now. So where we are right now, if you’ve already also the IOTA Whitepaper, the main assumption of the IOTA network is that it’s large enough to be self-sustainable.
What this means now is that in this infancy stage, where the network is still growing and more participants are joining, the network is susceptible to certain attacks, which is why right now we require this coordinator. The coordinator is basically there to help the network figure out which transactions are valid and which transactions are not valid.
So it’s still decentralized, still validating, but there’s still this special node which basically acts as the training wheels. This enables the network to grow, to protect against double-spend attacks, and what we’re doing right now is we’re starting to gradually turn off the coordinator so the network becomes self-sustainable.
So, in the future, when the coordinator is completely shut off, it’s a completely decentralized network with a lot of different mesh networks that are interconnected, each having their own kind of tangled version. There’s this interoperability between them, and through that we achieve this dynamic scale of the network.
Are there any plans to integrate IOTA into some of the more popular cryptocurrency wallets? I know there’s the IOTA native wallet, but there’s some issues with users that lack technical know-how might not be able to use it.
So, that is already in beta testing right now. There’s a UCL wallet that we’ve been developing for the last six months, and it’s a lot more user friendly. The ironic thing is about a year ago, I said,’I don’t want the IOTA foundation to develop wallets, because we should focus on protocols.’
That’s probably a bit negligent to the wallet itself. But now, we also employ all of those people that developed UCL wallet, so now we are back to doing wallet development under the foundation. But it’s worth it, right? The good thing about that wallet is that it’s also on iOS, Android, and desktop. It’s definitely one of the best wallets out there.
There was a big surge in the price of IOTA following the announcement of the data marketplace. It’s since corrected a little bit, but still a pretty impressive gain. Where do you see the price of IOTA headed in the next 6 months?
I hate answering these questions because quite frankly, what I always says is, I don’t know what’s going to happen. Even now the cryptocurrency market is valued at $600 or $700 billion, or even more. Nobody ever expected that.
So when it comes to IOTA, I always say that IOTA has the potential to really be the backbone of this machine economy, which truly means that a trillion dollar market cap makes a lot of sense for IOTA. In my opinion, over the next year, we’ll definitely see some major consolidation of the projects that are actually legitimate, and actually delivering.
In my opinion, IOTA is definitely one of the top 3 by the end of the year 2018. I have to do another bet on that.
You know it’s actually a funny story, the last time I did a bet with somebody in the community, and I basically said,”If IOTA is at $10 billion by the end of the year, that I can tattoo you.” If I lost, I had to go naked skiing. Luckily I won, right?
Recently it came up that some of the founders of Ripple have been made into these super wealthy people overnight. I’m curious what kind of financial stake the founders of IOTA have in terms of tokens.
This is actually one of the major distinctions IOTA vs. all the other projects, right? So what Ripple did, what Ethereum and all those other projects did, is pre-allocate a portion of the tokens for themselves. That is why the Ripple founders became so wealthy because they pre-allocated like 30 or 35% for themselves, which in my opinion is just insane. Ethereum founders got 70%.
What we did with the IOTA token generation event, is we issued 100% of the tokens. So us founders, we had to buy into the ICO as well, just to get tokens, just to get a stake in the project. It’s the same with the IOTA foundation.
What we did with the IOTA foundation is we came to the community and said, ‘Hey, if you want to get a foundation, a non-profit foundation, that is behind the protocol and is pushing it, you need to donate tokens.’ That is why the community kept together, they donated tokens, about 5% of the total supply. That is how the IOTA foundation is funded right now. We ourselves also had to buy in, right?
So, in my opinion, IOTA is probably had one of the fairest distributions out there. Because us as founders bought in, that is also one of the main reasons, in my opinion, why Robert Bosch Venture Capital decided to invest in IOTA tokens.
Those huge, huge companies have a lot of weight behind their brand, and them buying tokens, and them buying tokens and making the founders billionaires leaves everyone with a sour taste in their mouth, right? It’s just a pump and dump scheme. That’s why IOTA is better than that, than other projects. The short answer is, I have enough incentive to work on this 24/7, and have no life.
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