Yet another controversy unfolded within the digital currency space. What seemed to be a great leap forward for Berlin-based IOTA has now could turn out to be a sham.

Since its initial announcement of a partnership with Microsoft, and 20 others including Fujitsu and Samsung, to create an IoT marketplace, IOTA spiked from $3 Billion USD (~$4 Billion CAD) in market cap to $17 Billion CAD.

Shortly after though, it lost $2 Billion CAD in a value crash. This drop was due to its recent follow up announcement that there was never a formal partnership with Microsoft.

They say, however, that any publicity is good publicity after all. With such a spectacle, IOTA was put under a spotlight.

Initial Announcement

On November 28th, 2017, IOTA announced the launch of the world’s first publicly accessible data marketplace powered by a distributed ledger for the Internet of Things (IoT) in conjunction with companies like Microsoft.

The initiative, which allows stakeholders to share and monetize their data in a secure way, aims to demonstrate a proof of concept for a tamper-proof data marketplace. If proven, this will enable them to cash in on various data plays like weather station statistics.

For their inaugural demonstration, IOTA said all data will be valued equally, but this might change in the future.

The idea is to monetize data, the ‘oil’ of the IoT economy.

“Any kind of data can be monetized,” said IOTA co-founder David Sonstebo. “If you have a weather station collecting wind, temperature, humidity, and barometric data, for instance, you can sell that to an entity that is doing climatic research.”

The idea is that any connected sensor can grab data from an open marketplace, for a micro-fee. The marketplace is letting firms sell data to create incentives to share this data that would otherwise be wasted. The marketplace is currently on trial.

Walk back

Since December 12th, 2017,  IOTA has come out to clarify that it currently has no formal partnership with Microsoft. Its now-official statement reads as follows:

“The media has overblown the story into a “IOTA launches Data Marketplace with Microsoft,” which couldn’t be further from the truth. We are working together with more than 30 of the largest companies in the world on the marketplace as a co-innovation exercise.”

This means that Microsoft has not yet formally contributed any data to IOTA’s marketplace, nor does it have any sensors connected to its network. When asked about its involvement in IOTA’s data marketplace, Microsoft blockchain specialist Omkar Naik (in charge of Solution Sales – Data and Azure) stated via email correspondence with IOTA:

“We are excited to partner with the IOTA Foundation and proud to be associated with its new data marketplace initiative.”

Additionally, the two companies are continuing to collaborate on a series of technology innovation exercises with IOTA’s Tangle network. Despite the lack of a legal partnership, companies participating in IOTA’s testing of Tangle are expected to continue with testing in the long-term.

“The launch of the data marketplace was just the beginning,” Sonstebo added. “This project will continue for several weeks and is multi-staged.”

Legitimacy of IOTA

Whether the IOTA Foundation and its representatives should’ve stopped the spread of misinformation sooner is questionable. The original press release did not specifically state the nature of their relationship with Microsoft.

Regardless of the scandal, this revelation doesn’t necessarily discredit the legitimacy of IOTA’s technology.

When looking at other digital currencies, IOTA is still young and has a lot of room for growth. Additionally, the technology known as Tangle that underlies it still possesses a lot of merit. It utilizes a mathematical concept known as Directed Acyclic Graphs (DAG) technology which stands in opposition to the mainstream blockchain technology.

Indeed, IOTA has already risen in the ranks and has become one of the Top 10 digital currencies. IOTA promises to solve Bitcoin’s many problems, namely, that of its transaction fees, scalability, and speed.

A future without mining

Unlike Bitcoin, IOTA does not require “mining” because it is blockless. This means that anyone can make transactions on the network for free, without fees. There’s also no fixed limit on number of transactions confirmed per second.

Tangle instead approves two previous transactions in other IOTA wallets (nodes) in order to make the next transaction valid. Without miners, buying and selling speeds are much faster. Therefore, the more users active in the network, the faster and bigger the network is.

Just recently on Dec. 19th, 2017, IOTA received a substantial investment from Robert Bosch Venture Capital GmbH and signals this fledgling startup’s resilience and potential.

 

Image credit: IOTA

 

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