IOTA have announced the launch of a community fund called the IOTA Ecosystem Fund. The fund will distribute over $2 million to open-source projects that extend or improve IOTA’s platform. While the IOTA team focuses on building their main offering, the Tangle network, the funds will incentivize others to create code libraries, applications, hackathons, and tutorials for Tangle.
IOTA is a non-profit that works on coding an open-source network to transfer funds and data between Internet of Things devices. Called Tangle, this network is an extremely ambitious and innovative project with a lot of potential applications.
Imagine a not-too-futuristic city where a driverless car drops a hipster off at his jazz flute improv session. He pays the car (perhaps via NFC chip) as it pulls into a parking spot. The car pays the parking meter, and it also hooks up to a charging station to fill its battery. In this scenario, the car has to pay the parking meter and the charging station, the parking meter has to track how long the car spends there, and the charging station has to measure the amount of electricity the car takes. Tampering with the meters would be profitable, so the transactions and measurements have to be secured and verified. This is the type of thing IOTA addresses; Tangle would process all those payments and data securely through a peer-to-peer decentralized network.
Of course, for the Tangle network to be useful, the car, charging station, and parking meter would all have to have their own interfaces. That’s where the new IOTA Ecosystem Fund comes in. The founder, David Sønstebø, wrote, “IOTA intends to keep the underlying ledger protocol as basic and efficient as possible and to extend its utility through the IOTA eXtension Interface (IXI).” Announcing the launch of the fund, he said, “Every great open source project has a great ecosystem surrounding it. In many ways it is the defining characteristic that separates a mediocre project from a great one. A thriving ecosystem is a prerequisite for long term success”
According to their roadmap, IOTA is focused on expanding their code libraries, to help development of IOTA projects and add functionality to the software. Payments from the IOTA Ecosystem Fund will be given to people who expand these libraries. Funds will also be paid out for tutorials on learn.iota.org to teach how to use and implement IOTA software.
Launched in 2015, IOTA’s code recently left beta and a Graphical User Interface is available to download. The team have completed a reference implementation in Java and are working on other languages.
Tangle includes a blockchainless monetary token that could be used for machine-to-machine payments. Instead of verifying transactions by storing them all on a shared ledger, as blockcahins do, every node in the network is required to verify a couple of other transactions before they can send their own. This peer-to-peer network could theoretically run on lighter hardware than blockchains, offering improved decentralization over Bitcoin. If IOTA can overcome the blockchain’s difficulties with scaling, fees, and transaction speed, this would obviously have many applications, not just in the Internet of Things.
The drawback, of course, is that it is a much more experimental technology than Bitcoin and therefore cannot be considered as secure for now.
Image from Pixabay.