2018 review: our year with IOTA

Boy, the year has been a rollercoaster of emotions, sweat, success and disappointments. Several IOTA community members suggested a total transparency to clear up everything what has happened lately. Our dreams, fears and intentions. I think that there is no better way than to summarise the key moments. Public and private. It will also help understand our position and our intentions which will be described in the end. So, lets start:

January

The year started with fast adoption of our auto-peering solution. Nelson, which was launched In December, allowed many more nodes to join the IOTA network.

At one of the AMA in Reddit, people asked if IOTA Foundation (IF) was supporting our project. David, one of the founders, suggested that we were welcome to apply to the Ecosystem Fund (EF), which we naturally did.

We were contacted by John D Licciardello from IF and after preparing all the required documentation, we were promised that our application was to be reviewed in the first set of applications.

We launch Bolero, a one-click full node for desktop.

February

We launch Field, a node balancer for the IOTA nodes. We start our planning for Hercules, an independent community IRI alternative. First tests in NodeJS are performed.

We also start brainstorming our past experiences in network design and other areas to find a possible solution for decentralised consensus.

April

We launch Romeo, a stateful single-page-application wallet with unique multi-page system that works on any platform that has a modern browser.

We are contacted by IF to setup a call. The call is cancelled by IF. This was supposed to be our first call.

There are Tangle confirmation problems. Certain individuals from IF are fast to judge that the Field or Nelson could be the reason. Apparently, if you connect the nodes in a certain way, the Tangle does not run as it should any more.

We announce Hercules.

The call IF finally takes place where IF proposed to hire us. We decline as we wish to continue running our company and work in the IOTA as independent contributors, especially on our dream to combine our tools into a multi-wallet multi-node manager. We notify IF that there are commercial interests in our products.

We are again contacted by John D Licciardello to add ourselves, our project and the fund request to the new ecosystem site, which we agree. We set our required amount to finance the work for our entire team full-time for one year. (Previous requested amount was just for 9 months).

May

The first Hercules results running on Raspberry Pi look very promising. There is also a perceived increased interest from IF.

We decline the commercial requests as it clearly is not aligned with our goals regarding IOTA.

June

The Ecosystem site goes live. Our proposed project (the entire toolset: past, current and future, including Nelson, Field, Romeo, Herucles and future modules and tools planned) receives by magnitude more likes than the second-next one.

We are contacted by a new member of IF, Mat Yarger, who is apparently a DoD security expert and is reviewing Nelson.

Hercules public alpha starts with a lot of positive feedback.

July

Mat Yarger unofficially confirms that Nelson technology is solid and that there are fans within of IF. We feel proud.

There is an ongoing sidetangle-attack on the network. The IRI nodes fail to run. The temporary Hercules nodes work without problem. We are proud to be able to support the network and accept value transactions for fast inclusion and confirmation: https://twitter.com/RomanSemko/status/1020956184617062400

Ralf and CfB, both board Directors, are fast to judge that Nelson is insecure and the reason of network problems and that it should not be used — a stark contrast to what we have been told unofficially.

Ralf proposes me a position of IF Advisor. Upon requests for more information about rights and obligations, none ever came.

From within IF we are leaked derogatory communication about us and our work. We feel somehow betrayed and lose a big chunk of trust. It seems that our work is not taken seriously and our engagement is rather perceived as a threat.

We have the first breakthrough regarding the consensus algorithm, later codenamed Nikita.

August

The first chunk of ecosystem projects is financed. Ours is not, despite having the highest community interest and what John D Licciardello told us. From the leaked information the month before, we are somehow not surprised. All our projects and tools are open-source, apart of the Field server, which still needs cleanup work.

We feel that we should not count on any real help from the IOTA Foundation at this point.

We create first implementations of Nikita, which work like magic.

From within the IF, we get notified that the board is nervous that we are planning a fork or something similar. Understandable, given that we basically have something that the IF is still controlling. It is hard to let your baby free. Our answer to this was as follows:

At this point we already knew that thee would be no help from IF and we clearly communicated that we were looking for alternative ways to finance our work if IF, for whatever reason, could not do it.

It becomes more and more clear, that external forces are not welcome to play with the core technological concepts. You are either in the IF or you are against the IF.

September

I have a few email exchanges with, Serguei Popov, where he presents his three options to get rid of the Coordinator. I share my doubts about each different approach. We have a tiny hope that maybe IF could be interested in Nikita, which would finally be a way to finance our R&D full-time, including all the previously launched tools which are on-hold because of lack of time and resources.

New business contacts and our trip to Amsterdam and meeting with a few investors show us that there is also certain interest from the outside of the IOTA realm regarding our technology. Since the support form IF is not guaranteed, we create several decks for different use-cases where our solution could outperform any DLT, including IOTA. Things like dual-token, static quantum-secure addresses and digital network-twin — everything that we were researching in the past two years combined. This decks should be considered as alternative plan to work on paid PoC and, thus, do our research and implementation/testing of our ideas.

October

Nikita takes all of our available time. There is a lot of work already done, but much more work has to be done to make everything production-ready.

I have a chat with Samuel Reid. I explained him our dilemma:

Sam is a great guy and promises to speak with the board about the matter.

We indeed get contacted by David in October where he shows interest in Nikita and later makes a proposal to hire us as freelancers for one year. We again repeat the urgency and dilemma that we are facing.

This is the fourth time that we notify IF board about alternative interests in our solutions.

Unfortunately, the amount is less than we would usually charge our client for a full year’s work. We make a counter-offer: we offer to finance our ecosystem project and offer our services as consultants on an hourly basis. The board agrees. David says they need a week to prepare the contract and check with legal.

At this point, we put all our PoC commitments with third parties on-hold, since IOTA has a higher priority.

About 10 days later, instead of the contract, Ralf contacts us and says that we need to make a meeting due to due diligence. We have to show what we have before any cooperation can be offered. This is understandable.

Since we still had the PoC as alternative investment in mind in case there is no support from IF and there was a certain level of distrust due to what has happened in summer, we decide to patent the Nikita technology to protect ourselves from outside and any possible dishonest behaviour from inside the IF. This was communicated to Ralf on 29. of October.

November

We successfully apply Nikita consensus to DAG.

We agree to a meeting with IF on 5th of December in Berlin. We send a short 1-page unilateral NDA (since, from our understanding, it was us who would be disclosing secrets) on 15th November.

December

On Friday the week before the meeting, Ralf tells that we would have the NDA the same evening. This promise is not kept. Instead, 36 hours before the meeting, Ralf tells us that they cannot sign a unilateral NDA and offer to sign their 10-page standard mutual NDA. Additionally he insists that two board members, Dom and David, should participate remotely due to personal reasons.

That a Stiftung cannot sign unilateral NDAs sounds a little fishy. We answer that we could theoretically sign a mutual NDA if we had more time to check it:

However, we wanted the meeting to take place offline. Serguei was the responsible for Coordicide and he was in Berlin anyway, so as a compromise we proposed that we meet only two of them: Ralf and Serguei. This point seemed non-negotiable, so we decided to cancel the meeting.

The way the negotiation went, the intermittent and unreliable information and promises and the perceived lack of respect and trust made us seriously doubt that it would ever take place and have any positive outcome. The other commitments were already delayed by several months and the partners were getting impatient.

On the weekend, we get information that IF has a 4th and the most optimal way to get rid of the Coordinator. We feel, that Nikita is not needed for IOTA any more and agree to continue with out partner’s PoC.

On Monday we transparently communicate our decision to the community. We insist, that we would continue our work on the IOTA technology and that the learnings from PoC could be even applied later to IOTA in one way or the other. This could actually be very beneficial for the whole ecosystem — it would not spend a dime to get real-life confirmation, whether Nikita and other technologies would work.

As expected we got a lot of feedback during the last days. We are thankful and appreciate the great encouragement, interesting suggestions and also constructive criticism that reached us.

Unfortunately some comments crossed a line or are simply not true.
This is especially disturbing when it comes from representatives of official organisations.

It should not be forgotten that a foundation might be non profit — but that it’s members are still stakeholders of its product/ token and will either profit from the positive development of it or build their own (profit) business outside a foundation but around this product.
Suggesting that we are the only party here who has commercial interests to be able to pay their rent is like throwing stones inside a glasshouse.

The same goes for the claim that open source is everything. For those who still don’t know: there are critical parts of the Tangle-Software that are not open source. Which is an understandable management decision — but please don’t try to put others under pressure for the same decision. We stated again and again that our work will be open sourced in the coming months.

Our work based on several years of research is quickly marked as “fancy GIFs”. The Board continues to insist that Nikita = EC, while we just tested and applied Nikita to clustering, nothing more. The board insists that they never heard about us patenting nor what we were planning. We are portrayed as if we are rolling out a large-scale operation with an ICO in mind and that we betrayed and lied about everything.

We delayed everything and communicated at the first opportunity about our plans, when it became clear that we could not wait for IF any longer. Our main focus was always IOTA, but we also need to make sure that our research can be sustainable.

One thing is a few concerned voices and maximalists criticising our move. The fear would subside when when continued to work on IOTA and nothing changed much. Other thing is when IF is acting surprised, portraying us as liars, charlatans and opportunists. This is a stark contrast to what was communicated and did not add to trust that was already shaken since summer.

The people from within IF, community developers and past IOTA partners, who know the background of what was happening and had their own experience with IF, are just shaking their heads. Those people, that really contribute to the technology and adoption.

Since summer, I was a little skeptical about the management. As one of the companies that decided against IOTA told us: “The technology was never the problem”. The technology can be fixed, improved. However, people and their egos are hard to change. It takes character to admit that an external “Eric Schmidt”-type help is needed. Someone, without conflicting interests.

We tried to find a way to cooperate despite the perceived hostility. We tried to find a way to finance our work despite any lack of support from IF. We could live even with a few critical voices and continue our work on the community tools.

However, we cannot live with bigotry and us and our work being publicly defamed and appropriated as own achievement by the very same body that is supposed to drive the IOTA innovation. Despite of what we have communicated on Monday, we therefore decided to stay away for some time from the IOTA and the toxic environment that has been created. And maybe in the future there will be another opportunity to contribute to IOTA in a different way. I know that our supporters will understand it.

Our learning from this year is: Communication is king.

  • We might have confronted the IF in summer more intensely to clear up any doubt about our aims.
  • We should have informed the community about external commercial interest a few months ago. The reason for it was that we still hoped for IF and we didn’t want to use our public standing to push IF in any direction.

We still believe in the IOTA technology and are HODLing the tokens. We wish good luck to the IOTA Foundation — it is in the interest of all of us.

Take care,

Roman