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IOTA still wants to build a better blockchain, and get it right this time

One of the worst things that can happen to a cryptocurrency is a wallet hack. That, and a few more mishaps, is what happened to IOTA since 2017. As a result, IOTA lost momentum and market cap: from 4th overall, with a market cap of $13,2 billion in 2017, to 25th, with a market cap of $4 billion today.

Today IOTA is rolling out the beta version of its new wallet. But that really is just the tip of the iceberg in a massive new technology rollout that will get things right this time, IOTA Foundation Co-founder and CEO Dominik Schiener told ZDNet.

IOTA wanted to be quantum-proof, and that’s why it used a “special cryptography,” as Schiener put it. IOTA’s cryptography only allowed, for example, to utilize an address once. Reusing an address could lead to a loss of funds.

Another questionable decision was choosing to use ternary, rather than binary encoding for data. That was because, according to Schiener, the hypothesis of the future was that ternary is a much better and more efficient way to encode data. The problem is, as he went on to add, that this also needs ternary hardware to work.

Another noteworthy point is rate control: Determining which transactions among the ones issued are preferred. The way that will work in IOTA is by having the IOTA token holders generate a certain token in the network, called Mana, used to help to distribute this scarce resource, which is transaction throughput.

The IOTA Foundation employs about 140 people today. Its funds consist of what Schiener referred to as the Treasury — IOTA tokens received as a donation. The IOTA Foundation is also funded by research grants and is looking into setting up for-profit initiatives together with its corporate partners, in order to achieve financial independence.

The timeline that Schiener shared is rather aggressive, aiming to deliver all of the above within 2021. It will be interesting to keep an eye on IOTA, to see whether these bold ideas can come to fruition.