A Primer on IOSToken (IOST) — the Ethereum, EOS and IOTA competitor aiming to give machines…

It’s closing in on a year since my last deep dive which I gave on . EOS back in July of 2017 A lot has changed in the cryptocurrency and landscape since then, and so I decided to embark on series of giving deep dives to a number of innovative blockchain projects. blockchain As a moderator for Reddit’s (which can receive as many as 10M unique monthly visitors) I do a pretty good job at being up-to-date on the latest crypto launches. /r/Cryptocurrency However, today I’ll be doing a review of a coin that I completely overlooked until it had broken the Top 50 coins by marketcap. Summary: Internet of Services Token IOST ERC-20 Token 21 Billion as of April 8th. , , , , , Token Name: Symbol: Type: Total Supply: MarketCap: $266M Social Media: Reddit Discord BitcoinTalk Twitter Medium Whitepaper: IOST Primer Technical White Paper What is IOSToken? The is a project out of China that is aims to address the fundamental scalability challenges faced by blockchain technology in order to empower people, services and machines to scale robust services on a network with a thouroughput of more than 100,000 TPS (transactions-per-second). “Internet-of-Services” (IOS) blockchain The blockchain has built in features for: Smart contract language (dApps). Private transactions. Decentralized P2P hosting (Amazon S3 competitor). User reputation tracking for decentralized marketplaces. Light weight infrastructure to run on smart devices. Rewards for ‘good-citizens’ in the blockchain. What does that mean? Well, first of all, current blockchain’s have a problem — a big problem. They can’t yet handle transactions at scale. It doesn’t matter if you are: Sending payments. Interacting with a Smart Contract or dApp. Validating an identity. Hosting a decentralized vote. All these actions require the blockchain to ‘validate’ and process the transaction. To put it into perspective, people like to compare blockchain tps against the Visa Network which handles around 2000 tps on average. While the Visa network seldom handles more than 4000 tps, the network is estimated to be able to handle around 56,000 tps. The problem with this comparison is two-fold: Payments are just one type of transaction that takes place on modern smart-blockchains. Visa as a centralized service, doesn’t cross-validate transactions with multiple nodes. This means that for them one transaction is only ever one transaction. Where as in a blockchain, one transaction could take the equivalent processing power of thousands of centralized transactions. So, how far off are we? To put this question into perspective based on the IOST blockchain and what they hope to achieve, we’ve got to look at another ‘smart blockchain’ — that is to say we have to look at a blockchain that allows the processing of programmable contracts and code execution, rather than just looking at a blockchain that only facilitates transfers or payments. **Comparison #1 — Ethereum:**Ethereum is the current king when it comes to being a robust smart contract platform and having live useable dApp products. On January 4th, 2018, a few months after rendered the Ethereum network practically unusable for nearly 24-hours, Ethereum had it’s highest transaction day of all time processing 1.35M transactions in a single day. the chaos of the CryptoKitties Craze Broken out evenly across the day, this would account to roughly 15 TPS. During this time, processing at 15 TPS, transfers become very slow and Ethereum’s “gas price” skyrocketed costing users significant fees for using the network. **Comparison #2 — Stellar:**Stellar is a blockchain managed by the non-profit Stellar foundation and partnered with companies like IBM and Square. Stellar is what is called a “decentralized permissioned blockchain” meaning that through use of its quorum slices, validators, and trusted nodes, their “Stellar Consensus Protocol” (SCP) isn’t quite as decentralized as other blockchains, but it gives them advantages in speed and cost. Recently, a team at Barclay’s testing the Stellar protocol on Google Cloud infrastructure was able to stress test a private version of the Stellar network and achieve a transaction rate of 10,000 TPS. But, it is important to note that this was in a perfectly controlled lab environment and not on the public blockchain. So how will IOST solve all this? How does IOST aim to scale up to over 100,000 TPS when current infrastructure is struggling to process that volume on a daily basis? #1 — Light Weight Nodes/IoT nodes: One of the first big wins for IOST is that not all nodes are created equal. To be a node in the or Ethereum network you at the very least need to use a dedicated computer to store the blockchain and validate transactions through mining — in many cases, you may even need a dedicated server to handle this. Bitcoin For IOST, there will be “ ” that have full functionality, and “ ” as a method of simply verifying a transaction. First Class Nodes Simplified Payment Verification Nodes (SPV) It’s the goal of IOST to target a lightweight enough node system that any smart connected device from computers, to drones, to unmanned terminals can be a node in order to verify and act on transactions. #2 — User Reputation and Community Rewards: One of the biggest challenges of distributed ledger technology outside of scale, is what is known as the ‘bad actor challenge.’ A bad actor is anyone who harms the collective technology for their own benefit. For example, on the Ethereum network we’re usually bad actors when we send small transactions (such as actions in CryptoKitties) to the network. We know they are low priority, low fee transactions that ultimately clog up the network, but we want to take our next game action so we do it anyway. In IOST, users can be rewarded in one of two ways: The “Fair and Transparent Feedback System” (FTFS). The Servi token. In the FTFS system, users, services and contracts can receive feedback based on their actions and interactions with others. Having good feedback will effect their “believability score” (which we’ll outline below) which ultimately leads to benefits within the blockchain and encourages users to act in the best interest of the community even when they are pseudo-anonymous. The Servi token on the other hand is a rewardable token that will be distributed when users take voluntary actions to help the network. This could include providing a pro-bono community service, reviewing third-party services, or making other contributions to the community. These Servi tokens are a non-tradable, self-destructing asset that contribute to a users ‘believability score’ on a one-time (per transaction) basis. **#3 — Proof-of-Believability/Believability Score:**Most networks have nodes where there is a pay-for-authority kind of loophole. In mining PoW networks, you can buy equipment to up your hashrate. With masternodes and PoS networks, you lock up capital in dedicated nodes to become the validator. IOST aims at building a faster and fairer system through what they call “Proof-of-Believability.” Proof-of-Believability acts as a hybrid to the classic Proof-of-Stake model. In Proof-of-Believability each node will have a “believability score” based on: The amount of IOST in the node. The number of earned Servi tokens. The number of positive reviews of the node. The previous actions/transactions of the node. The IOST network will randomly, and algorithmically select a set number of validators for each block. The nodes with a higher believability score in the network are by design more likely to be selected, but it is never guaranteed. Rather than strictly setting validation to a set group of trusted servers or masternodes, the PoB system is constantly selecting a random group of validators based on the reputation of good actors within the ecosystem. Since users cannot guarantee that they will be the validator on any future block, it reduces the risk of malicious action, as you would need >51% of the randomly selected actors to be bad actors with the same goal to compromise the network and this is almost impossible in a crowdsourced reputation environment where you are more often picking the ‘good actors.’ **#4 — Efficient Distributed Sharding (EDS):**Another feather in the cap of IOST is their proposal of the Efficient Distributed Sharding or “EDS” system. This allows them to split the workload across nodes, and monitor the workload on nodes as well as the general network health. When a node is overworked the EDS system selects another node to allocate some of the incoming workload to allowing a linear scaling of network capability as new nodes enter the ecosystem. #5 — Atomix: The IOST Atomix system, is an atomic commitment system designed to prevent issues such as “double-spend attacks.” When a network can have multiple transactions taking place we run into an issue where we could have two transactions that impact each other: : “ ” Transaction A Transfer 100 IOST from address X to address Y “ ” Transaction B: Check the balance of address X If we have these transactions take place within the network at the exact same time, we’re going to run into issue. For example, if the goal of “Transaction B” is to check that a user has a certain balance before proceeding with a transfer, and it checks just before or during “Transaction A” takes place then we will be generating a false-positive response for “Transaction B.” In order to deal with this, we need to handle the events as “an atomic unit” that are dealt with as a whole, and where the results of each transaction must be completed without error for any transaction to proceed. If we take this problem in the other direction, we could have a very complicated transaction with 17 different steps, and our Efficient Distributed Sharing (EDS) system decides to split each of those steps across 17 different nodes. If one of those steps has a conflict and fails, but the other 16 were able to process successfully, this would have unexpected, and possibly damaging impacts to the network. To deal with this problem, IOST is bundling the transaction steps as an atomic unit, even when it is spread across different processing entities. This ensures that the entire process either successfully commits, or entirely fails as a full atomic unit, and that no partial transactions take place. #6 — Micro State Blocks: The last key feature of IOST’s scalability is the one that, I unfortunately have the least technological understanding of, and yet, ironically am most excited for. IOST has proposed a concept called “Micro State Blocks.” One of the challenges traditional blockchains face is that they store a new ‘block’ of data every few seconds. This block is to record what happened in the blockchain in those few seconds, such as any transactions. Even if nothing took place during that time, the block still has to be issued. There is no NULL in the blockchain, there is no skipping blocks. If nothing happened you’re still storing an ‘empty block’ but it is often the same size, or nearly the same size as a block that stores transactions. Over time this blockchain gets larger and larger, but still needs to be stored on the node in order to validate transactions. This gets to be a significant problem over time. For example, right now, in April 8th 2018, the Bitcoin blockchain is roughly 165 GB in size. That means if you want to run a node, you need to download and store 165 GB worth of information. Who is behind IOST? One of the most compelling aspects of IOST is the quality of their team. While many projects rely on individual developers, the IOST Foundation has a team of more than 18 highly experienced core developers, including: Terrance Wang: Masters of Science in Distributed Systems from Princeton University Bachelors of Science in Distributed Systems from the University of Chicago. Developer of CoinLang (Princeton) high level functional language for Bitcoin Developed CoinJoin anonymity security protocol for Bitcoin Co-Founder of IOST Jimmy Zhong: Bachelors of Computer Science and Mathematics from Emory University (Magna Cum Laude) 500-Startups Alum Founder of multiple VC backed startups. Early BTC/ETH miner. Co-Founder of IOST. Kelvin Tan: Bachelors of Computer Science from Tsinghua Unviersity. Gold medal — National Olympiad in Infomatics 2008. Gold Medal of ACM Programming Contest 2011. CTO of EtherCap. Co-Founder of IOST. Sheldon Mei: Ph.D. from the University of Wisconsin-Madison Gold Medal — National Olmpiad in Infomatics. Golden Medal ACM/IPC Regionals Papers published on ICML, AAAI, WSDM and AISTATS. Chung Teng: Ph.D. Computer Security from Cornell University. Former Google Engineer. Linux Kernel Contributor. Early Blockchain Community Contributor since 2011. Bosch Lee: Bachelors of Computer Science and Applied Mathematics from Tufts University (Summa Cum Laude) Former Associate at Goldman Sachs. Former Analyst at Morgan Stanley. Former Analyst at Deloitte. Co-Founder of IOST Will Zhao: Ph.D. and M.A in Economics from Princeton University. Professor at the University of Hong Kong. Charlotte Elizabeth Protector Fellowship. Recipient of the Ronald Hsia Prize in Economics. How was the token distributed? The token was distributed in a private token sale which sold 40% of the total 21 billion IOST to private fund investors. The IOST Foundation also announced that they were locking up all 7.35 billion of their IOST tokens from the foundation allocation until the launch of their mainnet. So, the mainnet isn’t launched yet? What’s the deal? No, the mainnet isn’t launched yet. IOST recently published the first of their code to — building a new blockchain on an entirely new consensus protocol is something that takes time. But, IOST has been moving at an aggressive pace. their public Github Based on their roadmap they hope to deploy a fulling functioning testnet by Q2 of 2018, and launch a full standalone network in Q3 of 2019. Investors Given the ambition of the IOST project, they’ve also managed to bring on board some top brass investors including the Chinese arm of leading Venture Capital firm Sequoia Capital. Some of their other prominent advisors include: Jia Tian, investor in Bitfinex, limited partner at Bitfund and a consultant for Zcash. BMan Lee, a consultant for Alibaba, Lenovo and Qihoo. He is the lead for Baidu’s AOD platform which serves more than 500,000 businesses. Ryan Bubinski, Co-Founder of Codecademy and listed as one of TIME Magazine’s 100 Most Influential People. Market Peformance: Looking at we can see that over the last 30-days IOST has seen strong performance even in the bear market seeing daily volumes between $30M and $150M since it began trading on . IOST on CoinCheckUp.com Binance In fact, , even in the bear market of early Q1/Q2 2018 — IOST grew by 56.45% in March, making it the 4th fastest growing of the top 50 coins, beating out investments like , , , and . IOST EOS Binance Coin Tron Bitcoin Ethereum So where can you get IOSToken right now? Binance HuobiPro OKEX Kucoin Bitfinex Disclaimers: The author of this article has not purchased any IOST nor do they intend to within the next 72 hours. The author of this article may be compensated by links in this content in line with various affiliate programs. Did you enjoy this article? Subscribe to the author for more! What coins are up next? Over the next few months I’m going to be deep diving coins like: Cardano Stellar NEO IOTA VeChain Ontology Wanchain Nebulas Kin Wax And many more, leave comments in the comment section to vote for your favourite, and don’t forget to subscribe so you never miss a detailed primer! Edit: An earlier version of this article called a number of prominent figures “investors” when they are in fact “advisors” for this project.