I'm having an impossible time understanding how the IOTA project is viable. It aims to service the IoT niche. However, Bitcoin already is tackling this niche in a variety of ways. Let's remember that BTC has first mover advantage & network effect (should not be underestimated), as well as hundreds of millions of $ in funding distributed among projects aiming to directly/indirectly make BTC & IoT a reality.
Skepticism is always good. I have no problem understanding why you are skeptical or why you reason as you do, but I'll answer each point to explain our motivation:
1. Lightning (IoT vision with nano-payments, unlimited transactions after opening channel, infinitesimally low fees) -- ETA: 3 months for testnet version / Pre-reqs: CLTV (already active), CSV (active within 2 months), malleability fix via SW (active within 3 months).
Like CfB already mentioned, this is not doable, the fee structure and sheer amount of ad hoc work needed is not feasible for true microtransactions in m2m.
2. 21, Inc. (explicit vision of IoT, $120+ million funding, relationships with top computer networking companies like Qualcomm, Broadcom, Cisco, Intel, etc.) -- already out with a very hype-ey, successful 21 bitcoin computer MVP that is attracting a lot of attention from Silicon Valley types / Vision of mass market, low-cost/free chip as final product integrated at the scale of millions into consumer electronics devices (and, like I said, the crucial *relationships* with vendors to realistically make this happen).
Yeah, except their math does not add up, nor does their purported business model. They will undoubtedly have to pivot within a year IMO. Their current burn rate is extremely high. I know 120 million sounds extremely impressive, and it is, they clearly got great sales skills, but give some thought to what they are really doing. They want to put an expensive ASIC into IoT devices, this is insane, you'd be infinitely better off by just filling up the device with BTC beforehand. There is no way this ASIC will ever be able to mine even a fraction of what you could easily put in at production. It's madness. Not to mention the idea of having an ASIC in tiny IoT devices that are by default all about consuming as little energy as possible. It's just straight up incomprehensible that someone thought this was a good business idea. I understand that they and their investors got almost blind faith in the idea that Bitcoin will become a trillion dollar economy, but to me and actually most others, even bitcoin evangalists, this is just not going to work. That being said, I do have a lot of respect for the team behind 21 Inc and do think they will recognize this themselves. So we'll see them pivot.
3. Sidechains that are 2-way-pegged (Blockstream is working directly on this problem, Paul Sztorc of Bitcoin Hivemind is also working on it with Drivechain) -- Once available, this means essentially any blockchain tech can be custom created and pegged to BTC. If we need a custom designed IoT-specific blockchain, then no problem, sidechain functionality will exist to facilitate it (just like Sergio Lerner's RootStock is taking advantage of right now, with their recently released white paper, but *by building on top of BTC via a sidechain* -- not as a separate block chain)
Sidechains is a great thing that will enable a lot of interesting things to happen via the Bitcoin network, but it still got the heavy infrastructure as well as the fees, so it's a moot point here. It's also worth noting that Sergio Lerner independently came up with a similar concept to IOTA called DagCoin and that he volunteered to security check IOTA. Is this because he sees Directed Acyclic Graph as just interesting or does he understand that Bitcoin is not fit for IoT? I wont answer for him, only he can say, but you can read about his
motivation here. It's also important to emphasize again that IOTA is compatible with Bitcoin's sidechains and Rootstock smart contracts. Same goes for the Ethereum platform. IOTA should not be seen as a competitor to these networks, it's a technology that solves a problem that neither of these do, which opens up a symbiotic relationship with these platforms. It's all about collaboration and recognizing that Bitcoin is not a panacea that solves every single problem in the world. The laws of engineering ensures that there cannot be such a 'universal solution'. Instead we should focus on making the best solutions to solve the problems that exist, IOTA does this for micro/nano-transactions in IoT.
As for this marketing about quantum-resistance, this is a far-off/futuristic problem. If we have learned anything from history, it is that technological problems are always resolved, one way or another. There is currently $6 billion USD of incentive to solve the quantum problem (plus whatever other problems exist), and that incentive will only be increasing in coming years. It's difficult to see how the argument can be made that such problems spell doom for BTC & so somehow justify IOTA?
It's a future problem, yes, but how far into the future? 10 years? 20 years? Most agree that it's less than 30 years. Our main point is that by then IoT will proliferate our entire existence and this infrastructure will be built in the coming 5-10 years, not 20 years or 30 years from now, so it's important to get it right NOW. We have countless examples of infrastructure only being built for the present and then having to continously try to patch it as the future arrives, it's a nightmare and not optimal at all. So instead we decided to solve this from go so that this is not a worry in the future.
What is the plan for IOTA to actually gain traction? So far, what I see is: "we hope the community will work hard to bring success". Really? This is the plan, and people are throwing 1,000 BTC at this 'castle in the sky'? Presumably, only because of the name recognition of 'come from beyond' backing it, just like Ethereum attracted attention mainly because of Vitalik's backing.
This is bordering on trolling, but I'll give you an answer. OF COURSE we'll be dependent on the community working hard to make IOTA a success, just like even after Ethereum raised 18.4 million USD + countless investors being in their space, it's still 100% dependent on the community actually making dApps, spreading the word, growing the network, getting more capital in etc. etc. This is why I reiterate over and over that those who only bought IOTA as a speculative asset did so 100% by their own responsibility and we won't cater to it at all. It's a waste of our time and that of the community that want to see the technology actually succeed. Way too many otherwise great crypto-projects end up as nothing due to the entire community only being fixated on what the numbers say on coinmarketcap.
What we (the IOTA community that the IOTA founders will partake actively in) will focus on is communicating to the parties that will be responsible for setting the standards in IoT, have people at conferences to present and meet with the industry leaders, develop applications and devices that utilize IOTA, develop branding and marketing material to spread the word of IOTA and do our best to create a thriving community. Will it be easy? No. But we know that we got the best technology for IoT payments, so the job will be to get the rest of the world to realize that.
As for why people have bought IOTA, well everyone has their own reasons. Is CfB's name a driving factor? Of course, but why is that? Because he's a great developer. Is that the main driving force? Not at all. I got the analytics data and know where most users and presumably purchasers come from: outside of BTT. Why? I believe that people are excited by new technology that is actually engineered for real use cases rather than just a thinly veiled political statement or pump and dump get rich quick scheme. The crypto community is maturing and coming of age, what matters now is implementing the technology, not just sitting around mentally masturbating of how this or that technology will upend the status quo and save us all.
