NFTs, Play2Earn, and DeFi may grab the headlines, but the low rumble of cryptocurrency’s next holy grail is starting to get louder: the race to connect the internet of things (IoT).
The term “autonomous vehicle” is a misnomer. What it actually refers to is a mutually connected set of cars that share a single intelligence. When one car learns something, so does every car running the same software. Ensuring this connective network and intelligence — for all devices, not just cars — is a public network is crucial for avoiding the abuses of big tech software monopolies.
This is a trillion-dollar opportunity. Early investors and supporters of the winning network will be richly rewarded. If you are an investor with a multi-year time horizon there is no question that an IoT platform should be in your portfolio. And with that, let’s investigate the two leaders and competitive landscape in the IoT blockchain space: IOTA and IoTeX.
FYI: I have included an Excel comparison chart at the end of the article.
IOTA is still the number one IoT blockchain (although IOTA prefers the term “Distributed Ledger Tech”) by market cap by far, coming in at a $3.6 billion valuation at the time of writing.
IOTA achieved a monstrous $15 billion valuation at the height of the 2017/2018 cycle, placing it in the top five of crypto market caps.
Back in 2017 one of the best ways to reach a large market cap was to invent a new consensus protocol. Ethereum was bogged down in scalability flaws (what else is new), and so layer-1 competitors swarmed in to fill its weak spots.
IOTA claimed their “Directed Acyclic Graph” (DAG) called Tangle would be able to process thousands of transactions a second once it was completed, allowing it to scoop up all IoT-focused applications. A DAG is essentially a relational database that can be updated — in theory — at lightning speeds. But the law of compensation in the crypto universe states that with great speed comes great centralization. In 2020, the foundation paused the network for a full 24 hours after a wallet hack was announced.
After nearly four languishing years, IOTA, unfortunately, has not delivered on many promises, and the crypto industry, once waiting with bated breath, has punished IoTA. With one of the worst performances of the 2020/2021 bull run, IoTA has slipped to 50th place in the market capitalization ranks.
But IOTA has shown some recent promise with the launch of their 1.5 network. From IOTA’s own update: “Up until now, the network was only able to consistently handle Transactions per Second (TPS) in the 5 to 20 range. Nodes, especially those running older node software, would start to struggle above 40 TPS. With the whole network upgraded to Hornet nodes, improved tip selection, and milestone selection algorithms and the addition of white flag, the network is now able to support over 1000 TPS.” This is wonderful news for IOTA fans. However, they have launched 1.5 without EVM compatibility and without the level of decentralization that would make most external blockchain developers comfortable investing in the platform.
Here’s the rub with IOTA: for over four years now all their focus has been on “IOTA 2.0,” this magical network upgrade that will instantly catapult IOTA to the upper echelons of functionality and efficiency. Without legitimate competition, IOTA can afford to take its time coming out with IOTA 2.0, if it ever arrives. But that’s where we get to IoTeX.
(Disclaimer: The author is a Data ownership hawk @iotex)
IoTeX has prioritized real-world deployment over theoretical speed or marketing, and as a result, it is a sleeping giant. Crucially, IoTeX boasts two cutting-edge devices: Pebble Tracker and Ucam. Pebble tracker is an all-in-one hardware oracle that uses a secure element to verify data collected from its sensors. This secure element is a black box inside the device processor called a Trusted Execution Environment (TEE), which is so secure that even the device itself has no access to it. This data can be plugged directly into a smart contract without a third-party oracle service like chainlink. It’s hard to overstate the potential value of this real-world oracle to the crypto ecosystem.
Ucam is a home security camera that uses a blockchain private key instead of a password login to ensure all the data captured by the device is controlled by the device owner. Ucam won a CES innovation award in 2020. It’s a first-of-its-kind device and shows how the blockchain could one day be integrated into billions of mainstream consumer electronic devices.
Beyond devices, IoTeX has a fleshed-out ecosystem of dApps and DeFi, including their own highly optimized uniswap style exchange called “mimo.” IoTeX also boasts the launch of a leading play2earn dApp called “StarCrazy,” as well as a rapidly growing ecosystem of third-party developers that includes dApps in health and gaming.
IoTeX isn’t perfect by any means. It has a lot to prove in terms of adoption and it needs more devices before it can declare a complete victory over IOTA in terms of real-world devices. However, IoTeX was the first IoT blockchain to secure a Coinbase listing, a critical milestone for the institutional recognition of the vertical. Given the divergent trajectories of IoTeX and IOTA, I believe IoTeX is poised to dominate the IoT blockchain vertical in the coming years. This opportunity could result in a 100x return for current holders.
Given the scale of the opportunity, it would be irresponsible to neglect an IoT platform in your long-term portfolio. After a careful analysis, IOTA has been steadily slipping after overpromising and under-delivering for four years in a row. IoTeX has done the exact opposite, which makes it my unequivocal pick.
(Disclaimer: The author is a Data ownership hawk @iotex)