What I will be describing here is comparatively bad branding for the amazing technology that IOTA has implemented. To help your understanding, I will begin with an analogy.
There are two businesses. One business sells cars to every day people. The other business sells cars to businesses. The first business has a larger customer base because more people need cars for every day use. The second business is successful, but has a much smaller market potential because its customers only include businesses, and only those businesses that use cars. This second business is IOTA.
IOTA is targeting the niche market of smart devices. Many people have theorized that monetary value can be stored in your home appliances, and they can transact business with one another! While this certainly is new tech, it is also unlikely to be used in that many use cases. Does your toaster need to pay rent to your refrigerator? No. Techy people love this sort of thing and I get it because I am a techy person. Tinkering with these types of systems in household devices could be a lot of fun. Yet, we must separate hobby interest from a value proposition which appeals to the mass market of people worldwide.
Explain to me why the average person wants a toaster paying their refrigerator rent? The average person would see no need because they do not have ulta-nerdy tech hobbies.
The practical market for such systems is limited. It would focus on device rentals perhaps or vending machines. Yet even with such rentals, you would actually never store those funds on devices themselves. This would be an economic risk because if your device was destroyed or lost, you would lose the funds. Rather, the safer approach is to store cryptocurrency on secure, private, and decentralized cloud platforms, (if these accounts are transacting on a daily basis for a device rental model.)
If I paid your computer platform 10 IOTA to fly your drone for an hour, would you store that IOTA on the drone? Would you store that IOTA on a remote terminal at the location I rented it? Or would you store that IOTA on a secure cloud database, with redundancies and security?
The answer is obvious. The safest and sanest approach economically, is to store funds off of devices and simply communicate commands to devices. Devices themselves have little need to transact economic value. All cryptocurrencies can accomplish the device rental task, assuming their fee model permits micro transactions.
IOTA would do better as a Mass-Market Crypto
IOTA to me, would be far more interesting as a mass market crypto attempting to take over the micro-transaction landscape, but also just be a solid system for standard crypto payments.
The reason being:
IOTA has zero fees.
Yet such a move would require re-branding. IOTA is not a good name for an international currency. This name fits the niche market it has aimed for but would not resonate with the every day consumer.
IOTA Copycat Holds Potential
This brings me to my point. If someone copied the IOTA code, produced a copy-cat coin with slight modifications, but re-branded and re-marketed that project to the mass market, they could see a lot of success. It is unlikely they would beat IOTA with copy-cat code, but long-term it could certainly be in the realm of possibility if the project was managed well.
A zero transaction fee coin would be a special thing in crypto because fees would always remain zero, no matter how popular the project became. The Tangle method they use is also scalable.
IOTA Copycat Suggestions
The biggest downside to IOTA is that the Tangle is not a blockchain. If you want to explore the blockchain of IOTA, it is just a tangled mess like the name implies. This makes their record of payment a little less clear for anyone digging through their block explorer.
Suggestions:
- Organize the tangled mess into a sequentially referenced, linear "chain", even if at its core, it is still the tangle
- Market as a standard crypto with zero transaction fees
- Market as a scaling solution, (IOTA has done live 182 TPS, and they are aiming for 1k TPS soon)
- Market as the only viable solution for on-chain micro transactions in the future of crypto when transaction volumes are much higher (Lightning network is off chain)
- Market a key feature of IOTA,
Free Data Transmission On-Chain!!!
The free data transmission is my favorite element of IOTA. Many projects have launched which hold a simple record of data on the blockchain, whether BTC or ETH. They make you pay to issue this record, such as Factum. People could do this with IOTA's tech for free. This means a project like Factum could be done on IOTA's system for free, no fee to issue the verified record to the chain. This opens a huge realm of possibilities. IOTA's tech gives us an on-chain authenticated data transmission protocol. Meaning, if you receive such a message from that chain, it has basically been authenticated and verified to be a legitimate transaction to the chain, by the entity holding the private key. Only the private key holder could write that record, and such a record would be free to write to the tangle.
Amazing Tech Geared Toward a Niche Market
I believe IOTA's marketing has done well for them in terms of garnering speculator's interest to bid up the price of IOTA. I do not really fault the core team for doing what they have done. In crypto, you want your price to go up, this means the real marketing trick is to have speculators bid up the project. Smart devices is a great hook for speculators. Getting speculators interested is not always about fundamentals but rather feeding into a theme speculators want to invest in. IOTA has succeeded in doing this. In terms of achieving real market penetration, I do not believe their path goes that route, though I anticipate their project to remain prominent.
In my view, IOTA's innovations are largely wasted since the project is geared to a theoretical future niche market, which will likely not have mass penetration in terms of economic micro-transactions between robots. Certainly smart devices will exist and grow as an industry, but smart devices only really need data communication. The economic layer is better managed off the devices themselves.
This has created a good opportunity for a copy-cat project using IOTA's tech.