With the Coordicide update to decentralization?

No special rights, decision-making powers or manipulations, no central point of attack, complete transparency for all participants. Decentralization is probably the greatest achievement of crypto technology – and at the same time the greatest challenge. If networks are left to their own devices, they must be sufficiently robust – i.e. safe from attacks. A sensitive topic in the IoT flagship project IOTA, which still relies on the services of the coordinator, a central control module of the IOTA Foundation, for security.

As early as 2018, the team around co-founder Dominik Schiener announced the “Coordicide” project: the deactivation of the coordinator, the beginning of a decentralized IOTA 2.0. After the project moved further and further back in the roadmap, which was updated several times, and the priorities seemed to have shifted in favor of many side projects, the external perception of Coordicide was already on the brink. Slowly but surely, however, the green light is emerging for the long-awaited update. This could put IOTA back on the map in IoT development.

In the digital machine room

Get up when the sleep tracker goes off, eat what the fridge orders at the supermarket for breakfast, go to work on autopilot, and let the day in the Metaverse slip away. The Internet of Things blurs the line between science fiction and reality. Everything is becoming “smart”, the world is growing together in mobile phone format.

As one of the first crypto projects, IOTA has specialized in making machines independent. With an infrastructure optimized for the exchange of data and microtransactions. Instead of a “classic” blockchain, the approach of the directed acyclic graph was chosen – a decentralized technology that benefits from high throughput. And it brings with it a decisive advantage for IoT applications: simultaneity.

Unlike networks like Bitcoin or Ethereum, which pack transactions linearly, i.e. one after the other, in blocks, the IOTA network – also known as Tangle – allows transactions to be executed in parallel without fees. With this concept, partnerships with heavyweights such as Bosch, Dell or Jaguar could be landed. IOTA is also involved in the EU Commission’s blockchain project “European Blockchain Services Infrastructure”. Whether e-commerce, decentralized identities, Industry 4.0 or e-mobility: IOTA seemed the right approach for the development of IoT applications.

But although IOTA has been showered with laurels from the industry, most projects remain in proof of concept. Concrete applications: None. After a meteoric rise during the first crypto hype wave of 2017, IOTA has sunk deeper and deeper into self-discovery. Projects have been put on hold, postponed, renamed: IOTA has increasingly failed in its overly ambitious goals. The Coordicide is now putting the project to the acid test.

IOTA on the home stretch

IOTA co-founder Dominik Schiener leaves no doubt about the success of the update. “All outstanding theoretical challenges” have been solved, the “largest part of our theoretical knowledge has already been implemented in code”, the chairman of the IOTA Foundation told BTC-ECHO.

According to the 27-year-old South Tyrolean, years of preparatory work seems to be gradually entering the final phase: “The last modules are currently being integrated, which marks the end of our research implementation.” After that, “we then just have to convert our research implementation into production-ready software, which we have already started in parallel”.

Sounds like a no brainer, but as expected, IOTA could drag on a bit, even if the overall development is “very advanced”. According to the IOTA boss, an auditing phase for the Coordicide has already begun: “We recently published a series of scientific papers, some of which have already been reviewed by experts, and which describe our new consensus model and protocol in detail.”

Launch still unknown

However, IOTA is more reluctant to give concrete dates. Schiener does not want to look at the cards with Coordicide either: “We are not giving any estimates as to when exactly we will switch off the coordinator, which is currently still protecting the network.” The respective modules would first be “available” in the IOTA testnet Shimmer and “put through their paces”.

When it comes to Coordicide in the mainnet will also depend on how quickly the upcoming updates can be implemented. On the one hand, the “Stardust” upgrade, with which the range of applications of the Tangle is significantly expanded by integrating the eagerly awaited Smart Contracts. On the other hand, the connection to the Ethereum Virtual Machine (EVM) on Shimmer is still pending. It is an important update for network interoperability. Once that’s checked, things could go quickly: “As soon as the ShimmerEVM is released, the first Coordicide modules will be integrated into Shimmer,” says Schiener, who predicts: “It won’t be long before it starts.”

The Coordicide is a key moment for IOTA where the future of the network will be decided. With the promise to decentralize the Tangle, the development team is deeply indebted. Ultimately, there is also the question of trust as to whether the project meets expectations. If so, IOTA is cementing its place in the emerging IoT development.

The potential of the Tangle for applications in the IoT is undisputed, even if much of this is likely to remain tech dreams for the foreseeable future. But not only for the industry, the decentralization of the Tangle should also contribute to the reputation in the crypto ecosystem. Combined with the adoption of smart contracts, 2023 could be a growth year for IOTA in many ways.

Disclaimer: This article previously appeared in the January issue of BTC-ECHO Magazine.