Crypto projects are continually trying to find ways to improve their networks, and a lot of money is invested towards this cause. The industry is growing, and there is a need for the systems to be improved to match the growth stage where the industry is.
The IOTA Foundation has set aside a $5 million grant which will go towards changing the network’s centralized nature. The foundation has been researching through Coordicide as they try to do away with their centralized coordination node.
The IOTA foundation distributes the IOTA cryptocurrency, which aims to develop fee of fewer transactions. The IOTA network is also highly scalable and can be used for the transfer of assets.
Announcement of IOTA’s shift towards Coordicide was made in May 2019, and the foundation has since been actively pushing for the change towards the new network. Coordicide is essentially a planned network upgrade for IOTA which does away with the centralized coordinating node.
Under the current network, the benefits cryptocurrency users seek from these assets do not entirely exist on IOTA. The centralized system means that user funds can be frozen, which is something crypto users want to avoid.
IOTA has listed some parts of the network which they want focused on as part of the Coordicide research. The $5 million will be dedicated to addressing reputation systems, spam prevention, decentralized random number generation, and network optimization.
If these parts of the IOTA network are addressed, it could see the cryptocurrency become more attractive to traders and investors across the world.
Becoming a true blockchain project
Cryptocurrency projects are usually run on blockchain technology, but IOTA took a different approach. The IOTA network uses what is called a directed acyclic graph (DAG), which enables the network to take multiple simultaneous transactions at the same time. This sort of system makes it easier for traders to buy IOTA online.
The biggest selling point for IOTA’s network is that it is highly scalable. However, the network is prone to a number of challenges revolving around asset management, decentralization and security. It is these issues that the IOTA Foundation plans on fixing through Coordicide.
Validation of transactions on a network such as IOTA’s relies on users who have to validate two other transactions and a coordinator whose job is to make sure that a transaction does not contradict other previous transactions.
This is unlike cryptocurrency networks such as Bitcoin’s, which require the services of miners through whom transactions are validated, and network security is maintained.
The IOTA network allows several transactions to be executed at the same time, which gives it the high scalability it has. It is also easier to sustain than a system which requires the services of miners.
IOTA may soon move to Coordicide as the amount of money invested in Coordicide related research shows that the transition process be accelerated over the next few months.