IOST like most of the newer blockchain based platforms has been developed after studying the ones that came well before it, such as the Bitcoin and Ethereum blockchains. Both of these platforms have experienced issues with scalability, slow networks, and high usage fees. IOST aims to be “a scalable and secure blockchain app platform for your next big idea.” In addition, its creators note that it will be able to process numerous transactions in a short period of time while enabling developers to easily create customized applications.
There are now so many variations on spin-offs of proof-of-w0rk (PoW) and proof-of-stake (PoS) algorithms that power blockchain-based platforms that it is now becoming increasingly difficult to determine which is best. To bring even more confusion to the table, IOST uses what they call “Proof of Believability” consensus protocol and Efficient Distributed Sharding to develop a scalable blockchain.
Proof-of-Believeablity – Provably Vague
According to the platform’s official website:
“We designed the Proof-of-Believability mechanism to eliminate the need for an energy-hungry proof-of-work protocol, which stands as a barrier to blockchain scaling up for widespread adoption. Believability of a node is calculated based on contribution and behaviors; Meanwhile fairness is ensured with algorithmic randomness.”
IOST Just a “Work in Progress”
The “algorithmic randomness” referred to above is reportedly implemented using Biased Resistant Distributed Randomness, according to the IOST official website. The platform’s whitepaper identifies two main problems with existing blockchains:
Basically, the blockchains of today are growing too large in terms of the data they store. For instance, the Ethereum blockchain now stores more than 1 Terabyte of data and it is only going to increase. This, then forces all full-node operators to download the entire blockchain in order to operate. Of course, this will make it difficult and impractical for blockchain networks to effectively and efficiently scale, as we are seeing with Ethereum. Notably, Ethereum co-founder Vitalik Buterin has said that Ethereum will scale to process 1 million transactions per second. However, currently the platform seems to be far from reaching this level, considering the Ethereum network can only process at most 25 transactions per second.
Before I continue explaining / analyzing the issues described above, it is worth noting that while describing “efficiency” for blockchains, the IOST whitepaper author(s) seem(s) to have not taken their time to proofread their whitepaper. If you carefully read the clause above, you will notice that the word “on” needs to placed after “network”. Like this: “to have all nodes [on] the network working on the same problem.”
Considering that IOST now has a market capitalization of nearly $350 million and a daily trading volume in the tens of millions of dollars, you’d think that the people invested in it would at least take some time go through the platform’s product offerings. Admittedly, this might be a very small mistake, but it does bring up a pertinent point. That being that the much more popular Tron platform, whose mainnet just launched, had pretty much plagiarized their whitepaper from IFPS.
This was not even brought to anyone’s attention, except well after Tron had amassed huge profits through its cheap marketing tactics and tall promises. So, it shows that the cryptocurrency market is being invested in by numerous people who have no clue what they are investing in, because they are too lazy to put in the effort to read about where they are “investing” their money. Then, as a result of this, they are quite often scammed, and then they complain. That’s probably what they deserve though for not doing proper research.
Sorry for going off the tangent there. Let’s get back to IOST.
The IOST whitepaper accurately states:
Due to high networking maintenance costs that full-node operators would have to bear, the “problem of centralization” will surface again. Actually, it already has considering there seems to be a lingering debate about whether Ethereum is being controlled by who some called a dictator, Vitalik Buterin. While this type of control is not exactly linked to how the technology behind Ethereum itself functions, it is a valid argument that a truly decentralized network should not be controlled by a few central authorities or people.
So, here we are seeing centralization with both the founders/creators of crypto platforms such as Dan Larimer, who along with a few other of his associates, is already controlling most of the things that happen with EOS and Steemit – both partly his creations. Apparently, the creators of IOST have a remedy for this. They aim to use a sharding technique, which has been used quite frequently in the more traditional distributed systems. Sharding is able to partition networks into sections referred to as “shards”. With this approach, each “shard” can operate its own consensus mechanism to allow for transactions to be processed simultaneously (or in parallel).
The beauty of sharding, if implemented properly, is that not all full-node operators need to validate transactions on a blockchain. Instead, as the the IOST white paper states, “subsets of transactions can be handled by various consensus groups” in parallel and at the same time. This, again if implemented properly, can allow for the blockchain network to scale effectively. Furthermore, the creators of IOST, like many of the “next generation” blockchains proposers, claim that their platform will be suitable to run large-scale distributed applications, in addition to enterprise level commercial applications.
Let’s limit our discussion on IOST for now, and the interested reader may refer to the whitepaper document reference link noted below. Also, let’s do a bit of an analysis here…
Investigative Investments and Thought Process
While all this does sound impressive and promising, it is worth noting that the data structures and distributed systems concepts that were originally used to implement the Bitcoin protocol were more than likely done with all this stuff in mind. Sharding is not a new concept, and it would be difficult to argue that someone as technically strong as Satoshi Nakamoto would not have known what sharding is and that these problems were to surface.
So, here we can even question was the Bitcoin protocol or even Ethereum designed with the best intentions in mind? Moreover, David Siegel who graduated from MIT with a PhD in computer science recently remarked that cryptocurrencies would “not hold” value like their investors expect them to.
Also, the billion dollar hedge fund manager said that blockchain is fascinating. Although Siegel did give his reasons for why he believes this, at this point it is reasonable to question the motive and credibility of the experts. That’s why it’s best to do your own research and use the best tool that you have, that being YOUR OWN BRAIN. Also, it is best to be receptive to new ideas and information instead of being overly biased, protective, and opinionated. Unfortunately, that’s the flaw in humans because we’re consumed with our own ego and usually make decisions based on our emotions, rather than sound logic. Let’s all learn to be responsible for our own safety and also be more responsible with how we safeguard our own assets, be they physical or digital.
Final note: It would not be a good idea to invest in IOST because it’s still “a work in progress” as noted in its whitepaper. Also, they claim they will be able to deliver “100,000 transactions per second”. Any new platform claiming so many transactions per second in general should require a lot more thorough investigation and research.
DISCLAIMER: This article is not meant to influence any investment related decision. It’s purely for information purposes and to spread awareness about cryptocurrencies and blockchain technology.