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IOTA Smart Contracts Integration

By November 16, 2017 One Comment

One of the most spectacular crypto-booms of the last few months – IOTA – keeps climbing the cryptocurrency charts.

Today, November 16, it crossed the historical price of $0.80 and had an almost 20% increase in 24h.

What is the reason behind the sudden growth?

If you haven’t been following IOTA Slack channel, or couldn’t catch up with the latest updates – IOTA smart contracts integration could be the cause of a sudden growth in value.

While no official confirmation came from IOTA yet, the rumours have been circulating for months.

What’s Special about IOTA?

IOTA smart contracts integration

IOTA, unlike most ICOs, didn’t just aim at crowdfunding their idea. IOTA’s goal is to revolutionise the Distributed Ledger Technology.

How?

The Foundation behind IOTA created the Tangle – an improved version of blockchain technology, which works similarly but without the blocks.

The technology was designed to manage Machine-to-Machine payments for the IoT industry.

While blockchain technology will help automate contracts, financial industry, accounting and many others, it’s not an ideal solution for M2M payments on a smaller scale.

Tangle, on the other hand, can secure micro-transactions thanks to a lightweight design which doesn’t suffer from scalability issues.

IOTA was the first one to implement the Tangle, and even though it’s not faultless, it does have high chances of replacing blockchain technology.

Especially in engineering – IOTA has recently partnered with Bosch – which was a significant step towards introducing the technology into real-life applications.

IOTA Smart Contracts vs Ethereum Smart Contracts

At the moment the most significant difference is the fact that Ethereum has smart contracts, while IOTA doesn’t.

But on a more serious note, smart contracts are on IOTA roadmap and should be made public anytime soon.

However, for the time being, we don’t know the potential limitations and specific features.

The most important reason behind IOTA not being able to launch smart contracts yet is because the Tangle doesn’t have a native timestamp function yet.

So far, the Tangle is only a graph with a partial order structure, which makes it very hard to establish the correct time order of transactions.

Ethereum, on the other hand, hasn’t solved its problem with correcting the smart contracts mistakes.

At the same time, it’s also incredibly challenging to translate the legal language into a binary programming language – something that Solidity has been struggling with for a long time.

In a traditional blockchain, all transaction in say block #27 clearly happened before the transactions in block #28.

In the tangle, two transactions can happen almost at the same time, but it wouldn’t be immediately clear which one occurred first.

Naturally, some smart contracts don’t care which transaction happened first, but many do. And that would be the first hurdle IOTA would have to overcome to be able to consider smart contracts.

However, to solve this issue, IOTA foundation is working on implementing Oracles that can provide timestamps of transactions.

If the transaction timestamp can be determined, then an order of transactions can be determined. Therefore, a smart contract platform similar to Ethereum can be implemented.

When Will IOTA Implement Smart Contracts?

When IOTA will implement smart contracts

I think it’s pretty evident that a network like IOTA is looking into smart contracts.

The tangle is here to fix the majority of blockchain issues, including smart contracts.

Since the plan has already been included in the official roadmap, it will likely happen in 2018.

If that’s the case, the cryptocurrency market should start preparing for significant disruptions in the value of Ethereum, NEO, EOS and many other networks.

Could we think about the IOTA smart contract integration as Ethereum on the tangle network?

That is perhaps the best explanation of what is about to happen. And the IOTA price is the least essential aspect that will be affected.

It’s a well-known fact that IOTA will disrupt the already disrupting blockchain technology, but now it will take it to the next level.

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Megan Frydel

Author Megan Frydel

Megan is a self-thought blockchain enthusiast. She enjoys combining finance with technology, from a less-techy perspective. BiteMyCoin is her most recent project underneath the umbrella of an international digital marketing agency ANCHOVY.

More posts by Megan Frydel

Join the discussion One Comment

  • Paul Zietsman says:

    Cool writeup! I’ve also been keeping an eye on IOTA after a read their white paper and the road map.

    You mention that Solidity struggle to convert legal language into binary. Why do you say this?

    Something that I’ve notices about IOTA fans are that they think we should live in a “one crypto to rule them all” world.

    IOTAs initial “pitch” was M2M micropayments and it’s clear that they are still pursuing this if you look at the companies they are partnering with. This is a completely different use case compared to Bitcoin, Ethereum, Neo, NEM,…

    Instead of focusing on why IOTA is better than X, highlight its differences and strengths, because there are a lot of them! And highlight its weaknesses, because there are a few of them as well.

    Sorry for the long post.still a good writeup!

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