Blockchain vs DAG: Behind the Battle for the Backbone of the Internet of Things And The Future of Cryptocurrency — A History
Nothing can be more logical — we work so hard to put food on our table, to clothe our children, to carefully craft and build our lives and create a sense of comfort and security — the last thing we want to do is jeopardize that or put ourselves in any situation that might challenge or begin to break down those carefully crafted and fortified walls.
But unfortunately, like anything (and this is the tough part for us to understand or even accept, and we’re seeing examples in every segment of society from politics to business to energy), the more push-back there is on changes to those systems and structures, the costlier it becomes on us, our loved ones, our way of life, our “truths.”
We get so entrenched in those very systems and structures, they stop being about the greater good, our children, the future, and they start becoming more and more about our own pride.
But, as much as we try to reject it or resist accepting it, we still know it, deep inside, that nothing is permanent.
Everything is temporary.
Yet, despite knowing that universal truth, well, we insist on continuing to fight it.
Since the very dawn of mankind, there has existed a seemingly natural inclination to get too close to, and fall too uncomfortably comfortable with, the status quo.
To resist change.
To do all we can to hold onto everything we see sacred.
And hence lies our universal eternal and existential struggle — to keep things the way they are, nice and tidy, just the way we like them — despite the mortally innate and intrinsic knowledge that the very tenet of evolution — adapt or die — is the single strongest unshakeable force we, as humans, can choose to struggle with accepting (perhaps save for age and gravity…).
However, there is a very fortunate byproduct of all this:
there is no bigger and better drive for innovation than those very tenets.
First an idea is born, and then an idea is shared, and then at some point — once warranted — the hive mind kicks into effect, and there’s enough support, there comes a breakthrough, or a perpetual idea or movement or natural process, and that very thing we were fighting, hits critical mass.
It was famed journalist Greg Palast, the man that broke the ‘hanging chads’ controversy in the 2000 U.S. elections, whom I had the honor of interviewing in another life almost 2 decades ago, who instilled me with an idea that, almost 15 years later, has yet to make its way out of my psyche, and in many ways, has helped inform many of my decisions since.
He told me, quite simply and matter-of-factly,
“Everything mainstream begins in the fringes.”
At some point, as momentum builds behind one idea, and the antithesis to that idea begins to feel pressure and pushback, the tensions come to a head, are released in some which way or fashion, some times more destructive than others, but in all instances, a new order is birthed.
These are essentially what we call paradigm shifts.
And while they don’t come often, and they seem as if they come suddenly, they actually come very very slowly, but the inherent culture of continued rejection and ‘kicking the can down the road,’ is what makes us feel as if it came out of nowhere.
We run out of road.
There are many examples, but a perfect contemporary one to illustrate the point of the rest of this editorial is perhaps renewable energy.
The fossil fuel industry — from oil to coal — have completely monopolized the energy industry during the 20th and first part of the 21st century.
There is no denying that.
It’s all we knew and it’s all we used.
We had to.
It was cheap, it was efficient, it was everywhere, there was plenty of it, we’ve invested way too much money into PR campaigns claiming we cleaned up billions of spilled gallons and, hell, we’ve lost hundreds of thousands of fine soldiers over the decades protecting it.
Meanwhile, over the past half century, way out along the fringes of this dominant energy beast, people were beginning to harvest energy from different sources — the force of water, the wind, the sun (in fact, the first solar cell was invented in the 1800s).
I, myself, clearly remember scorching a hot dog in an oven made out of a cardboard box that I lined with foil in my driveway as a kid (I won’t date myself, but, well, it’s been a while. A long while…).
Anyhow, as time moved on, more people began to experiment with different methods, and more methods began to get more efficient and more efficient began to get cheaper and cheaper began to get more adopted and “all of a sudden” (over the course of half a century in the ‘fringes’), these renewable sources of energy became infinitely more cost-effective and cleaner to harness and use than fossil fuels.
As detailed in Jeremy Rifkin’s recent Vice documentary “The Third Industrial Revolution: A Radical New Sharing Economy,” in 1978, just 40 years ago, solar cost 78 DOLLARS per solar watt. Today, that same solar watt costs 50 CENTS. And by 2020, that solar watt will be 35 cents.
Perhaps no so ironically, (albeit it took economic incentive to finally get there), it’s some of those very structures that once suppressed their own instincts, that helped move it along. For example, Shell Oil’s 1991 release of a video called “Climate of Concern” that, if no Shell branding was included, could have easily been mistaken for a (albeit much more boring) prequel to Al Gore’s now seminal climate change film “Inconvenient Truth.”
Another example is General Motors’ now infamous period of flirting with electric vehicles with the EV1, which they eventually tried erasing the evidence of in a fashion that could have driven the plot of a Scorsese mobster-flick — they literally tried rounding up every single one they sold and crushed them.
If you haven’t seen “Who Killed The Electric Car,” do it! It’s a fascinating historical story.
But over time, and increased consumer demand, they could no longer give in as easily to the pressures from the obscenely heavily-funded lobbies that be.
Fast forward a few decades and now those very same companies, including Shell Oil, sensing that the critical mass for renewables and sustainability, in no small thanks to fearless and confident innovators and business-people with more money than God (love him or hate him, Elon Musk immediately come to mind), are on a quickly approaching horizon and unstoppable trajectory, are now buying electric car charging companies, and that very same General Motors are now vowing to be all-electric car company within a decade.
Furthermore, Volvo is all in, VW is half in, Jaguar and Land Rover are all in, Nissan, Mitsubishi and Renault are half in, Ford is VERY in, China is completely in. India is completely in. Hell, even Saudi Arabia (yes, that same Saudi Arabia) has sensed the global shift and jumped on the renewable energy bandwagon, pledging over 8 billion dollars for this year alone in solar projects.
And this is still the beginning.
And while it’s been laying low, in the fringes, for decades, building the groundwork and infrastructure and proven use-cases for a sustainable future, this movement, to the masses, seems to have happened very quickly.
It’s as if the idea for electric cars and solar and wind energy happened in the past 5 years…the ‘mainstream.’
But as illustrated above, this movement has been steadily building for closer to a century than not.
So what happened?
An example I like to give comes from personal experience. Barely a decade ago, I was working for a ‘news’ video production company and one of our clients was one of the aforementioned automobile giants. They had asked us to record MOS (Man on the Street) interviews of what people wanted from their new cars. While I was encouraged to hear a solid 60–70% of respondents mention better gas mileage and cleaner cars, that encouragement quickly dissipated once we were in the cutting room and forced to edit most of that out in favor of things along the lines of ‘more power,’ ‘bigger,’ ‘stronger,’ — you get the picture.
I almost lost my job arguing to keep a few of them in.
Needless to say, it wasn’t long after that I chose to squander what was left of my soul and left that industry.
Essentially, through marketing and advertising (which is no longer a secret in everything from cars to the “American Dream”), the major manufacturers and corporations were just selling us what they wanted to sell us, not necessarily what we wanted them to sell us.
Furthermore, they were doing as well as they could to spread as much doubt about how uncertain a renewable energy future is and scare people into believing that the electric car could, and will, never replace the combustible engine automobile.
But then, all of a sudden, smartphones were birthed, internet access was as ubiquitous as water (once was), and everyone was on it.
The hive mind, open source — or in more corporate friendly terms — the sharing economy.
These same major manufacturers and corporations could no longer ignore the populace and simply dictate to them.
They had to adapt and begin to, in varying degrees, give the populace what they’re actually asking for, wanting, and needing (needless to say they still have a looooooong way to go, but it’s a start…).
The people, for the first time in history, had a voice.
One that could no longer be ignored and replaced.
As this started to happen, renewable energy began to hit the scene in a massive massive way. We may have first really started ‘sort of’ hearing about solar energy around the 80s, a point at which it was still mostly novelty, but, seemingly all of a sudden, it’s now everywhere.
In the last 10 years alone, the price of solar per watt has dropped by almost 70% making it the world’s overall cheapest form of energy.
Meanwhile, the fossil fuel industry was busy harassing Native Americans on their own lands with their oversized drill-bits and hiring (literally) the same PR firms that tried to convince the public that cigarettes weren’t bad for you.
THAT CIGARETTES WEREN’T BAD FOR YOU.
The billion-dollar machine kicked into high gear to try and kill any and all traction that renewables had.
But by now, there was no stopping it.
Renewables had taken hold, a (mostly) informed world population and governments were aware of the dangers of continuing down the fossil fuel path, both to our natural resources and our bottom line with the havoc that climate change has already begun to wreak around the globe, and most of them began adjusting at a massive scale.
There is no longer any question that renewable is the future of energy production.
By this point, you’re either seeing where I’m going with this, or you’re wondering what the hell this has to do with cryptocurrency and blockchain technology in general.
Well, as many of us are aware (and lived through), in 2009, another major paradigm shift got dangerously closer to critical mass.
And to the involved respective powers that be — central banks, financial institutions, tax agencies, creditors, federal reserves and so forth — this was the one they perhaps most feared, and certainly did not see coming (and are still struggling to figure out how to deal with).
We don’t need to get too deep into the details of Bitcoin’s birth, as that story has been told to death anywhere and everywhere, but here’s a very very basic primer for those that may not be familiar with its roots:
There was a massive economic crash in 2008–2009.
This was in large part due to shady business practices and criminally greedy bookkeeping that left many people stuck in loans and funds and investments that were knowingly (as we found out in hindsight) a manufactured bubble.
It took down the auto industries, the financial industries, the banking industries, and with it, small business, mortgages, economies around the global and all the way down to the common working man.
The middle class.
They’re the ones that got hit the hardest and, a decade later, are still struggling to pull themselves out of it.
Over the course of 18 months, the Dow Jones dropped more than 55%. By most accounts, it was billed as the biggest recession since the Great Depression.
The Occupy Wall Street movement caught steam due in no small part to this…the obvious massive income (and justice) inequality and lack of oversight, and, most importantly, lack of accountability to those involved and responsible for it.
The public ended up having to bail out all of these companies, from General Motors and Bank of America to Fannie May and Freddie Mac, the largest corporations and financial institutions on the planet at the time.
The ones “too big to fail” are the very ones that “failed.”
And no one…not ONE executive or suit in charge went down for it.
Meanwhile, the common man lost their jobs, theirs homes, their retirement funds, their…everything.
All whilst simultaneously being forced to bail out the criminals that caused the whole mess.
Faith and trust in the financial system was broken.
People were bamboozled and they were going to make damn sure to do everything they can to make sure it wasn’t going to happen to them again.
So along comes a perpetually anonymous character who called him/herself Satoshi Nakamoto.
Nakamoto was devising a solution to a realization, even an epiphany of sorts: money’s value was an illusion.
Just like people were beginning to realize the idyllic ‘white picket fence’ dream was the same — it was nothing but marketing.
As the dollar was no longer backed by anything tangible at all (as the gold standard was dropped by Nixon in 1971), it meant nothing.
If the government needed more, they just printed it.
Money became no more valuable than the paper it was printed on.
Furthermore, the only reason it was worth what it was worth was because someone else told us it was worth that…that someone else being the very establishment that caused the crash to begin with.
So Nakamoto existentially wondered…why do we have to use money?
Why can’t we just use anything else that we can determine the value of, and trade directly, without any intermediaries, so long as we agree on its value amongst ourselves?
And why do we have to depend on backdoor shady accounting practices and deals that never see the light of day and are relegated to a select few at the top, for our well-being and what we deem valuable?
In short, he/she/it concluded: we don’t.
Basically, if I can sell someone a car for 5000 BlahMehBlahs, and someone else will take those BlahMehBlahs to sell me food and diapers and that merchant can use those BlahMehBlahs to pay his or her electricity and cable bills and rent, what do any of those people care if they’re using BlahMehBlahs, seashells, dollars, or stones?
Each party is getting what they want, and there’s no one there to tell them they can’t do it.
So Bitcoin (BTC) was invented.
The first peer-to-peer digital currency.
And it was decentralized.
And the blockchain was its backbone.
And the blockchain…well…the blockchain was, and in many ways still is, the next ‘fringe.’
The blockchain was, and is, extraordinarily revolutionary.
Most reading this probably already know what it is, but, again, for the sake of those that don’t, a blockchain is essentially an immutable public distributed encrypted ledger.
What this means is that, every transaction that’s made on the blockchain is on a decentralized public ledger that anyone can access, and each transaction is broken down into tiny bits, fully encrypted, and spread across each computer and server that uses this network.
So for simplicity’s sake, if 100 people are using Bitcoin, and someone makes a transaction, that transaction is broken down into 100 bits, each bit is encrypted, and each encrypted bit is sent to each network, and recreated on each of those networks, that is using Bitcoin.
What does this mean?
Well, most importantly, immutable accountability.
No one can mess with it, alter it, hack it — ‘cook the books’ if you will.
In order to do that, it would entail amassing each one of those tiny encrypted bits, un-encrypt them, change what you want to change, re-encrypt them exactly as they were before, and sent back to each one of those very same servers without any part of the network, millions of users and nodes, detecting any of that movement.
Furthermore, if there was any chance that someone (or something) managed to get anywhere in that process, immediately upon detecting it, the public ledger would automatically disengage and drop that ‘chain-link’, and conjoin the untouched unaltered chain-links, keeping the integrity of the blockchain intact.
Here’s a fantastic (animated) little video to illustrate it:
And for a few TED Talks that take things a bit deeper, check out:
This blockchain thing was incredible!
We can transfer value, directly from peer-to-peer, with no middle man or entity to skim off the top or conduct any traditional tomfoolery, and all of it was safely and publicly accounted for.
And in a way, the more people hoarded, the less valuable it became — being that there is a finite amount of Bitcoin, 21 million coins, that will ever be mined — it needed to be continually circulated to hold a market value, as there was a fixed supply and it was the very market itself that dictating its value.
But of course, there eventually had to be a rub.
There’s always a rub.
And here was BTC’s first rub: the way that Bitcoin works, for more Bitcoin to be released into the wild, a very complex mathematical algorithm needs to be solved, and each time it is solved, another Bitcoin is released. So those that helped “mine” that coin by using their computer power to help solve that mathematical equation each get a piece of that coin as a reward.
As more and more people began to use Bitcoin, more and more people began to mine for Bitcoin and it got exponentially more labor intensive, and, subsequently, required much more processing and computing power. What was once possible to use your own computer at home to mine for Bitcoin, became impossible, as large industrial-sized server farms and mining farms were beginning to sprout up and monopolize the hashing (computing) power.
Where at one stage someone with a home computer could use their system to mine half a BTC, now was barely able to mine mere fractions of 1% of a single BTC.
It was costing them more in electricity than they were making.
Meanwhile, the large heavily-funded mining farms had taken over. For example, as of 2017, there were a single group, Bitmain, that controlled over 33% of all of the Bitcoin mining worldwide.
33% off the power was in one mining entity’s hands.
Basically, Bitcoin became what it was created not to be…centralized.
These ‘miners’ were now able to demand exorbitant fees to transfer and use Bitcoin. And the more you paid, the faster your transaction went through. Essentially, the equivalent of the loss of Net Neutrality for crypto.
The last time I transferred Bitcoin, I sent 50 US dollar’s worth and my charge for that was 10 dollars. That’s 20%. That’s some serious credit card fuckery right there.
Exactly what this was meant to circumvent.
Furthermore, the energy it was using was obscenely unsustainable. As of last year, Bitcoin mining was using more energy in a year than more than 150 countries, including Ireland and most African countries, and by some analysis it was on track to use most of the world’s energy by 2020.
So sustainability and decentralization were beginning to plague the world’s first cryptocurrency.
All of this was to be expected and completely understandable. After all, being as how this is an almost 10-year old technology, birthed at a time when smartphones were barely a thing and people were still trying to figure out WTF Twitter even was, no one could anticipate the power and scope of the devices and computing power people had in their pockets and basically wired directly to their amygdala.
It wasn’t designed to be that.
This has caused bottlenecks and ungodly wait times for transactions to go through on many occasions because it eventually had to go through one of these concentrated networks, and the more transactions that were happening, the more the mining farms could charge to use their computing powers to process those transactions.
The Bitcoin community has tried a few solutions, such as ‘forking’ the blockchain to create new chains built alongside the original chain. When you hear Bitcoin Cash and Bitcoin Classic, that’s what those are. But at their core, they’re nothing more than temporary bandaids (and fine dividend earnings for BTC investors).
Another possible patch is the Lightning Network, which is billed as “a system that can be grafted onto a cryptocurrency’s blockchain. With this extra layer of code in place,” theoretically “Bitcoin could support far more transactions.”
But in an age in which more and more interactions and transactions are happening online, from financial to medical to informational, it was becoming clearer and clearer that a patch or a workaround wasn’t the ideal solution for an efficient and secure peer-to-peer, and especially and exponentially, machine-to-machine, future.
While evolved blockchains, such as Litecoin and Ethereum, were engineered for cheaper fees and considerably quicker transaction times, they also made it easier to add additional layers, called “smart contracts” that accounted for and made it possible to include additional data on the blockchain beyond just financial transactions and value storage such as medical data, supply chain data, inventory data, contractual information, and the such.
And to be clear, these are fantastic, efficient and strong blockchains that prove very valuable for many many use cases, not the least of which stated in the sentence above.
I’m a huge supporter of, and hold, both of them.
However, they are still based on the linear blockchain model, and while that’s fine for data that’s not in a hurry, it doesn’t bode well for the next focus of this piece:
The Internet of Things (IoT)
Connected devices. Connected cars. Connected smart cities. Connected networks.
You’d be hard-pressed to read or see anything tech-related these days that has no mention of the IoT, “the network of physical devices, vehicles, home appliances and other items embedded with electronics, software, sensors, actuators, and connectivity which enables these objects to connect and exchange data.”
And for the sake of this piece, here’s the important part: “Experts estimate that the IoT will consist of about 30 billion objects by 2020. It is also estimated that the global market value of IoT will reach $7.1 trillion by 2020.
When IoT is augmented with sensors and actuators, the technology becomes an instance of the more general class of cyber-physical systems, which also encompasses technologies such as smart grids, virtual power plants, smart homes, intelligent transportation and smart cities.” (source: Wikipedia)
Plain and simple: the IoT is the infrastructure of the future.
And as you can imagine, between self-driving car networks, smart homes, delivery drones and robots, artificial intelligence, smart grids, sensors ranging from health to transportation networks to supply-chain tracking, the Alexas and Google Homes and Apple Pods communicating with the phones and tablets and watches communicating with banks and databases and calendars and so on and so on — we’re talking billions of devices conducting millions of transactions all taking place each and every single day.
With the IoT quickly becoming a standard piece of everyone’s lives, where machine-to-machine transactions are becoming the norm rather than the exception, a system of instant and immutable verifiable peer-to-peer transactions needed to be birthed. It was clear that some sort of breakthrough to handle the sheer magnitude of transactions that were coming, needed to be realized.
And as we’ve seen, and experienced, with the blockchain’s limitations, the design simply can’t handle the sheer scale of transactions that the emerging IoT economy was going to be demanding.
A solution needed to be had.
This topic of conversation became a fundamental basis of the blockchain application community NXT, which is where the core team of IOTA met.
And when blockchain and crypto enthusiasts David Sønstebø, Sergey Ivancheglo, and Dominik Schiener got together, this is what they set out to tackle. And once they brought in notable mathematician Sergei Popov, who joined the IOTA foundation to help devise this solution, everything clicked.
The use of the Directed Acyclic Graph (DAG), nicknamed ‘The Tangle,’ as an alternative to the blockchain, was born.
I won’t get too deep into the intricacies of the DAG and how it theoretically serves the same purpose here, but I highly recommend reading Popov’s official IOTA Foundation white paper, a very fascinating deep dive into the technology and its application in the distributed ledger space.
In a nutshell, a major fundamental difference from the blockchain structure lies at the core of the DAG.
Whereas the miners are verifying each transaction as it happens on the blockchain, under the DAG structure, the users themselves are verifying those transactions, basically taking the miners out of the equation.
It works like this: when I make a transaction, in order for my transaction to go through, I need to verify 2 other transactions (this all happens under the hood, so nothing manually needs to be done).
What this fundamentally does is make it infinitely scalable and, in direct contrast to the blockchain, more efficient and stronger the larger it becomes. If there were only 10 people using the network, then you can imagine the waiting times for transactions to go through, but if there were all of a sudden 100 people using the network, there are more nodes to verify those transactions, and if there are 1000, there are more nodes and so on and so forth.
Basically, the more people/machines using the Tangle, the more efficient and quicker it becomes.
All sans the manpower, energy, and computing power of miners.
For reasons that are probably apparent, just like the fossil fuel industry during the early days of renewable energy solutions, the wider crypto community ignored it, swept it under the rug, didn’t take it seriously.
But as more people began to learn about it, get interested in it, and actually understand it, things began to change.
And that’s precisely when the blockchain faithful started attacking it.
The fear, the uncertainty, and the doubt (FUD) starting spewing like a broken spigot.
And it came from all angles, from Bitcoin-miners posing as academics to YouTube-flavor-of-the-months to Wikipedia trolls.
And that was the moment it was apparent that IOTA, and the Directed Acyclic Graph, had arrived.
Not so ironically perhaps, the only people not throwing hate at IOTA, were those that were actually using it how, and for what, it was designed for, but we’ll get to that later. Before we get to the real-world breakdown of who is working with IOTA and what the team has been up to, I’d first like to bring those unfamiliar with the situation up-to-speed, so here’s a brief primer on some of the more glaring criticisms and where they came from.
Perhaps most famously, the first real substantial attack against IOTA came from the MIT Media Lab’s Digital Currency Initiative (DCI) in September of 2017.
In a piece they published on Medium entitled “Cryptographic vulnerabilities in IOTA,” their criticisms came down to a few fundamental points:
1. They found a “a serious vulnerability — the IOTA developers had written their own hash function, Curl, and it produced collisions.”
2. IOTA uses ternary instead of binary.
3. IOTA uses a centralized trusted coordinator.
4. IOTA claimed to have ‘dubious’ partnerships, most notably with Microsoft
After hoping that fact would simply trump fiction, the IOTA Foundation realized we’re not exactly living in a gilded age of reason at the moment, and ultimately decided to put together an extremely thorough and detailed 4-part response. In addition to addressing the supposed vulnerability, which MIT’s DCI has since acknowledged no longer exists, they also failed to recognize, in a point continually hammered home by the IOTA foundation, that the trusted coordinator is a temporary measure until there are enough nodes in the system to handle it on their own, at which point, that coordinator will be turned off.
Regarding the partnership claims, the most controversial of the supposed ‘dubious’ claims was the one with Microsoft, which, no doubt, anyone following the crypto space saw multitudes of people claiming everything short of heresy against the IOTA Foundation for making ‘false’ claims.
But here’s the thing — had ANYONE researched before running a train on the FUD caboose, they’d have seen that it was a representative from Microsoft themselves, Omkar Naik, Microsoft Blockchain specialist, that used the word ‘partner.’ His exact quote was:
“We are excited to partner with the IOTA Foundation and proud to be associated with its new data marketplace initiative.” -Omkar Naik, Microsoft Blockchain Specialist
So for anyone to accuse the IOTA Foundation of making dubious claims is simply irresponsible and any exaggerated claims of the Microsoft’s involvement are the fault of no one but the exaggerators.
The IOTA Foundation also exposed the author’s, and much of the MIT Media Lab’s DCI (who are not the same as MIT) conflicts-of-interest, which include, not so surprisingly, considerable stakes in Bitcoin mining ventures and organizations, the very structures and investments that any DAG-based initiative most threatened.
It is also important to note that in December of 2017, another division of MIT, MIT Technology Review, published a piece entitled “A Cryptocurrency Without A Blockchain Has Been Built To Outperform Bitcoin”, and despite IOTA’s 4-page response (so far still unanswered by MIT’s DCI) that addressed every single one of their concerns in great detail, the authors of that original piece countered with “Our response to “A Cryptocurrency Without a Blockchain Has Been Built to Outperform Bitcoin””in which they recycle the very same, already debunked claims, from their original piece.
At one point, they even got so petty as to argue IOTA’s claims that there are no transaction fees are not true because of the price of energy it uses to make the transactions.
Marinate on that for a second…
The next notable attack came from a fairly popular crypto YouTuber who calls himself Doug Polk Crypto, who has a very respectable 164k subscribers.
Apparently he’s a professional poker player — the importance of which cannot be understated — as the approach he comes at cryptocurrency with is not about the technology, it’s strictly about the money.
And to be clear, this is not meant as a slight on Doug, but strictly to illustrate the wide chasm that exists between approaching something in the blockchain space as a currency or unit of value versus a technology, and in every sense of the word IOTA leans much more heavily on the technology side.
With that being said, just 30 seconds of any of his videos, or a casual scroll through his feed, and you’ll immediately catch the tone and style — sensationalist, loud, cute cutaways to memes and animals, in-your-face, shock-jock cable-news station talking-head. And who can blame him? I don’t think anyone will argue that the personality-trumps-substance driven style of ‘news’ isn’t currently enjoying a temporary renaissance.
I get it.
I worked in broadcast news.
I know what they need to do to keep eyeballs on their productions (and advertisers and special interests in their pockets).
And his recent video entitled “One Bitcoin Is Going To Be Worth $1 MILLION — PayPal Director,” which currently sits at almost 200,000 views, has certainly added to those ratings.
In this video, at the 2:52 mark, he begins about 5 minutes of essentially ranting on IOTA. And this was the part that spurred the earlier comparisons to the fossil fuel industry’s early approach to the renewable industry. As he flashed a placard that reads IOYA (Cute. See what he did there? I Owe Ya?), he then goes on to cite the founder of Litecoin Charlie Lee claiming IOTA ‘rolled their own cryptography’ and then quoting a Reddit post by founder of Ethereum Vitalik Buterin in which he states concerns with “many of IOTA’s technical decisions (trinary, custom hash functions, POW on transactions),” before LITERALLY stating, and this is critical,
“Now I’d like to take a minute to explain that a little bit, but unfortunately I can’t because I only speak English.”
So I’m sure it got a chuckle during his well-timed quick-cut after the statement from his diehards as it was designed to, but to me, this was INCREDIBLY disconcerting on so many levels.
Number one, he’s flat out admitting that he doesn’t even understand the fundamental technology behind IOTA.
Number two, how is anyone supposed to take anything else he says about a technology he admits he doesn’t understand into any sort of serious consideration? He completely discredited himself at the expense of getting a laugh or two.
It’s exactly like walking into a dealership and having the salesman tell you he knows nothing about the car, but hey, it’s red and it goes fast!
Number three, he immediately follows all of this by saying “the point is, many reputable people have issues with the currency.” Based on the ‘reputable people’ he cited, it’s not hard to surmise why the blockchain industry has issues with something that threatens it.
And then, finally, to prove his points, he spews out information about IOTA being hacked (referencing the $4 million third party seed generator hack that had nothing to do with IOTA), and the same recycled ‘fake’ partnerships (already addressed above).
I tried pointing all of this out in a comment on his video, and this was when I realized how far the depth of the echo chambers that any serious discussion about the Tangle with die-hard blockchain-loyalists truly reached:
My comment was deleted.
And I’m sure mine wasn’t the only one.
Luckily I was able to grab a screenshot of mine before he deleted it. (Yes, I save everything.)
And if you scroll through the comments remaining, the only ones there, save for a few token semi-positive IOTA ones (which he couldn’t help himself but snidely respond to, an example of which you’ll see on the left), are all what you’d expect from an audience captivated by this level of information : frat-house friendly whoops and hollers.
Things like “Dude your videos are good” and “LMFAO IOYA!” and “Cool video bruh” dominate the stream.
You get the picture.
And unfortunately, this is what happens. Not just in the crypto space, but in the ‘mainstream news’ space as well — people get lazy, they look for the most sensational stuff to get attention, they don’t do the full research, they promote that, yell at a camera, make people laugh, and that’s what circulates — he found his audience, he’s now stuck in the seductive position of placating them at any cost — the slippery slope when information turns into infotainment.
And that’s fine.
There’s a place for that.
But to fully understand, we have to empathize to understand in order for it to all make sense.
Put yourself in the shoes of a miner.
You invest thousands, and in many cases, tens of thousands, or for mining farms hundreds of thousands, sometimes millions of dollars (there’s even a case of a $250 million dollar mining farm) into mining equipment, GPUs, video cards, and rigs and networks and warehouses and cables and housings and so on.
You have investors.
You have massive energy bills to pay.
You have financial stakes in the very cryptocurrencies you’re mining.
This is your life. It’s what’s paying your bills, what’s feeding and clothing your children, and what’s generating your mortgage payments.
Then along comes this thing that effectively has the same function, but is more efficient and, scariest of all, doesn’t need you anymore.
Again, fossil fuels versus renewables.
Or, as a fellow distributed ledger enthusiast so aptly put it:
“IOTA is to Bitcoin what Bitcoin is to banks.”
And if you think that the blockchain community doesn’t have its own lobby, think again. A concerted army of FUDsters and ‘journalists’ and ‘news sites’ is at the industry’s beck and call. Anything with that much money in it has systems and structures in place for damage control, especially one that got famous after it was revealed as the currency of choice for Silk Road, a massive illicit drug sales website.
Then there’s this guy…oh lord, where to start with this guy? The only thing Andreas Brekkens’ article, “IOTA Cannot Be Used For IoT — Loss Of Funds May Occur” proves is that he knows nothing about IoT and what, and how, IOTA is designed for. It’s incredulous how far someone will go to make themselves look like complete asses simply to get internet traffic eyeballs.
Brekkens basically goes through a screenshot-by-screenshot account of trying to set up a full node and the issues he runs across in doing so.
What he doesn’t tell you, perhaps because he didn’t do enough research to figure it out on his own, or perhaps because it wouldn’t have made as entertaining an ‘article,’ is that he didn’t have to go through 85% of the steps he himself laid out and there are solutions with significantly pared down process, such as the Bolero client, that has you up and ready to go within minutes.
Furthermore, he was using an outdated wallet and IRI (Reference Implementation), which is the core client for a node.
Finally, for his purposes, there was no reason to set up a full node to begin with. 99% of users of ANY cryptocurrency don’t even know what a node is, nor will they ever need to.
It’s like sending in someone that played the board game ‘Operation’ as a child in to the OR to perform actual surgery.
However, admittedly, had he been half-reasonable, it wouldn’t have made for as clickbait-worthy an article as this one did.
I won’t lie, I was entertained.
Oh, and, of course, it’s also worth noting that Andreas himself is also a Bitcoin player who has had a ‘history of failed endeavors’ in the space. I won’t delve too deeply into those here, as that’s not the purpose of this piece, but to summarize for contexts’ sake, some of his dubious behavior includes his involvement as a co-founder of Helix Capital, who’s focus was on trading Bitcoin, and was also the focus of a Do Not Pay Global Investor Public Consumer Alert that claims to have received information that Helix was involved in “offering unauthorized or illegal financial services.”
Brekken was also the Chief Technology Officer of JustCoin, a now-defunct exchange. In an email co-signed by Brekken himself, JustCoin’s “banking partner had unilaterally terminated its relationship with the company and the exchange had been unable to find another banking partner in Norway.”
Furthermore, he’s an advisor for Bitcoin.com (are we seeing a pattern here yet?).
The final example I will briefly mention here came from Bitcoin.com entitled “Faced With Criticism IOTA Fans Try To Bully Growing List Of Detractors.” Once again, it hops right into the exact same already debunked recycled arguments and the only articles he references are the aforementioned Andreas screenshot meme article, and an article about “former investors who complain about their funds being stolen” in which he references, yet again, the third party seed generator that the people that lost their funds used (as discussed ad nauseam, this has nothing to do with the IOTA Foundation, and everything to do with investors with no experience who trusted a third party site with generating their private seed, or password).
The majority of the rest of his rant is spent calling the purported bullies “childish” and “nasty” and “in an ecosystem fraught with scams.”
It is also important to point out that Bitcoin.com themselves, the publishers of Brekken’s article, have a large financial stake in bitcoin mining. In their own words: “We have partnered with the largest Bitcoin mining farm in North America, to source cloud mining hashrate at the best value.”
Now, I am more than well aware that IOTA is not a perfect project.
No new ground-breaking technology, especially one that is designed to be quantum resistant to process machine-to-machine micro-transactions on ternary chips that have barely begun to come to market, can be perfect.
Does it have its bugs? Sure. What doesn’t?
Is anyone going to try to argue to me that Bitcoin and other blockchains don’t?
But that shouldn’t be the focus.
The focus should be on the IoT — the technology and how it’s applicable to the needs of the quickly approaching Internet of Things invasion.
There is no other project, especially in the traditional blockchain space, that is as far along in focusing solely on creating a functional backbone for the IoT future.
Arguing that a blockchain structure — albeit ingenious and revolutionary for its purpose — is ideal for the IoT, is a painfully hard sell.
What’s a much easier sell is that while we have the FUD faithful out there deleting Wikipedia pages and creating caricatures of themselves on YouTube videos and devising click-bait titles for their respective followings, the IOTA Foundation has been busy in other matters including, but not limited to:
1. Registering for and going through the process to receive recognition as an official foundation in Germany, one of the hardest countries in the world to do this in.
3. Announcing that Robert Bosch Ventures, the world’s largest supplier of automotive components, has invested heavily into IOTA as well as joined IOTA’s advisory board. It is also extremely important to note that Bosch recently committed to building a new factory in which “up to 700 employees are expected to produce chips for e-mobility and the Internet of Things.” According to Bosch, this is the “largest single investment in the company’s more than 130-year history.” Furthermore, Bosch themselves couldn’t contain their excitement in a blog post focused on introducing IOTA to some of their partners, including BMW, Ernst & Young, and Porsche at a recent Meetup that they organized at their offices.
4. Various governments dedicated to building the infrastructures for the world’s most advanced smart cities, grids, devices and applications have shown interest in IOTA, including Tokyo’s Metropolitan Government, who selected IOTA to participate in an accelerator program that also includes 18 Japanese companies including Toyota, Honda, and Sony.
5. The government of Taipei has confirmed it is testing IOTA for various purposes, including Citizen Identification Card networks.
6. The Netherlands have officially begun to use IOTA to verify and administer legal documents.
8. Indications are that IOTA is working to some capacity with Maersk, “the largest container ship and supply vessel operator in the world” (source: Wikipedia), and has added Jens Munch Lund-Nielsen to their advisory board, who has formerly served as various roles within Maersk and has expressed excitement about “applying the Tangle into international trade and supply chains.”
9. IOTA’s data marketplace is well underway with more than 30 high-profile players in the future of the Internet of Things applications participating, including Bosch, TMobile, Fujitsu, Phillips, Accenture Labs, Samsung Artik, Orange, The University of Oslo, and the Norwegian University of Science & Technology.
And this is all within just the past 3 months.
Needless to say, between building the tech and the foundation, and trying to deflect all the misinformation that has been continuously vomited over that same period of time, the IOTA team has been extremely busy.
While there have admittedly been what can be considered as less-than-ideal responses and/or lapses in judgement as far as some responses from the IOTA team towards those attacking it, including public Twitter spats with Ethereum’s Vitalik Buterin among others, the team seems to be learning and growing from those very experiences. This is perhaps best evidenced in a very well done wide-ranging and substantial recent interview with David Sonstebo, perhaps at times perceived to be the ‘saltiest’ of the bunch, by popular crypto YouTuber Ivan On Tech, who had no problem asking all the hard questions, and got all the hard answers.
It is extremely important to acknowledge that this is not a knock on Bitcoin. In fact, we owe Bitcoin a HUGE deal of thanks for the blockchain. It was arguably the most innovative technological advancement since the internet itself, and there will always remain a place for the blockchain. There are some incredibly exciting projects in the space, including things like VeChain, Ripple and the aforementioned Ethereum, that are transforming entire industries.
The one thing that is sufficiently clear, however, is that the blockchain structure, especially in its current form, while perfect for many applications, is just not the ideal structure for the Internet of Things, where the consensus is leaning stronger and stronger in favor of the Directed Acyclic Graph, the structure that IOTA is built on.
Now, whether or not the Tangle lives up to its promise, only time will tell.
But at the very least, it’s a very bright step towards a solution for the demands of the future of the increasingly sharing economy orbiting the IoT.
If you haven’t seen it already, I highly recommend a new documentary by Vice Media entitled “The Third Industrial Revolution: A Radical New Sharing Economy”, in which world-renown social and economic theorist Jeremy Rifkin lays out an incredibly awe-inspiring road-map ushering in a new era of sustainable development. He masterfully lays out the challenges, and the solutions that are already being implemented, with the Internet of Things at the heart of it all.
And addressing these very challenges is what lies at the heart of IOTA.
Lucky for us, the IOTA team seems to be moving forward and focusing strictly on the vision to fill this gap and address these challenges, while increasingly leaving the periphery nonsense exactly where it belongs, in the background.
While it’s obvious that blockchain is becoming a mainstream concept, and it can be argued that blockchain is entering the phase of its own critical mass, with regards to the Tangle, I can’t help but reckon back to my time with Greg Palast:
“Everything mainstream begins in the fringes…”
(In the interest of full disclosure, I am an investor in several cryptocurrencies, including Litecoin, Ethereum, Vechain, and IOTA, among several others. In the interest of further disclosure, I no longer have holdings in Bitcoin. Not because I don’t believe it has value, but because of my personal feelings towards energy consumption and sustainability.)
All images used are either ‘free to use’ from Google Images, under a Creative Commons 2.0 license, YouTube screenshots, or my own.