Ask anyone in the know and they will tell you that the blockchain industry is plagued by scalability constraints, something we keep experiencing with increased usage of blockchains. Pick up any book about growing a business and you’re reminded that if a company can’t scale, it will fail.
Since blockchain technology is still in its early development stages, most major scalability problems remain unsolved.
Meet the Internet of Services, listed as IOST. This new blockchain startup, which raised $31.3 million in its ICO of early 2018, is directed at improving blockchain infrastructure by focusing on the scalability issues the technology struggles with. The IOST team understands that no blockchain application will be able to compete with the likes of giants such as Alibaba, Facebook and Airbnb if it can’t handle an equal amount of transactions.
Through the employment of revolutionary innovations, such as Efficient Distributed Sharding and their Proof-of-Believability consensus mechanism, IOST wants to bring the advantages of blockchain to the masses without being limited by scalability.
What Does IOST Do?
The Internet of Service project is essentially a protocol blockchain, and it provides its users with a platform on which they can exchange online services and digital goods in a decentralized manner. As the name implies, the IOST blockchain will host an infrastructure that supports a service-oriented ecosystem.
Moreover, the IOST protocol allows for developers to deploy large-scale dapps that can support large numbers of users at once, something that most current protocol blockchains can’t.
What makes IOST stand out from competitors such as Ethereum and NEO is the project’s focus on scalability solutions. Scalability obstacles are currently haunting the blockchain industry, posing a serious barrier for the technology to reach critical adoption. People are not going to shift to blockchain technology if it means slow transactions, unusually high fees, and low throughput.
By focusing on an alternative consensus mechanism and an innovative blockchain architecture, the IOSTteam is trying to solve the industry’s scalability hurdles. In their technical whitepaper, the team states that their IOSTblockchain will be able to handle up to 100,000 transactions per second.
This means that the open-source IOSTproject can enable business-grade decentralized services.
The 5 Technological Pillars of IoST
In contrast to many other scaling solutions, the IOST solution has an on-chain solution. This means that IOST doesn’t face the same security issues caused by the combination of on-and off-chain solutions.
The aim of the IOST technology is to allow for higher scalability without causing centralization and security threats. To make this possible, the IOST blockchain has the following 5 mechanisms integrated in its blockchain architecture.
It’s important to note that these descriptions only grasp the surface of the technological complexity of these mechanisms. For a full explanation, click here.
Proof-of-Believability Consensus Mechanism
A major challenge faced by traditional Proof-of-Stake consensus algorithms is that they inherently come with the threat of centralization. This is because major token holders have a bigger chance of being selected to mine (or mint) and receiving the accompanied reward; thus, the rich get richer, which means even more tokens to stake, and so on in a self-perpetuating cycle.
The IOST team believes PoB to be a major improvement over PoS because it ensures scalability while preventing such centralization. It does this by splitting network nodes into 2 categories: believable and normal nodes.
Believable nodes process the transactions first. Once their batch is finished, samples of their outcomes are validated and verified by normal nodes. Normal nodes thus function as validators of the trustworthiness of believable nodes. If a normal node gauges dishonesty in a believable node, then this node will lose of all its tokens and its believability score will go back to zero.
To be selected as a believable node depends on users’ believability score, which is connected to a node’s network reputation. Parameters for this include a user’s token balance, community contributions, reviews, and several more. Servi is an IOST platform-native token used to assert users’ contributions to the network as well as incentivize members to contribute to the network. Servi is non-tradable, self-destructs once a block is validated by a node, and is distributed automatically.
The goal of the PoB consensus mechanism is to have a fully decentralized governance system. To ensure that the IOST platform and protocol is fully optimized before making it fully decentralized, the Internet of Service Foundation, a Singapore-based nonprofit, works on developing the IOST blockchain and relevant technologies. The foundation is comprised of blockchain researchers and experts, distributed systems scientists, programmers, and tech enthusiasts
Efficient Distributed Sharding
Sharding is the process of splitting a network of nodes up into smaller groups. These smaller groups each verify a share of the total transactions proportional to the numbers of shards. For every X new nodes, new shards are created. This means the possible transaction throughput increases with the number of shards, making such a blockchain theoretically infinitely scalable.
IOST uses a customized version of this technique called Efficient Distributed Sharding. It reduces the transaction processing workload on each individual node and increases the total throughput of the network linear with the increase in the number of nodes.
What’s unique to EDS is that it uses an innovative scheme to create shards. These shards can record and process a large number of state transactions while remaining heavily bias resistant.
The other three unique methods of IOST’s Efficient Distributed Sharding are:
Between different epochs, the IOST protocol switches groups of nodes in and out of shards. For this process, the TransEpoch algorithm is used. It also enables nodes that do not switch to continue validating transactions while the transition process occurs. The TransEpoch algorithm thus maintains Byzantine Fault Tolerant consensus for each shard during transition, keeping the shards secure.
Because IOST works with shards, it’s essential to the architecture that inter-shard transactions are possible. This is because transactions can potentially happen across shards. This is what the Atomix protocol (Byzantine Shard Atomic Commit protocol, in short) enables. It prevents double spending and maintains the consistency of transactions. For the full Atomic technical functioning, click here.
Micro State Block
Most blockchains have all their attached nodes store the entire ledger of the blockchain, which ensures maximum immutability and security. However, the problem with this is that causes the blockchain to become slower because the ledger becomes bigger.
To prevent this problem, IOST has implemented Micro State Blocks for data storage. Through Micro State Blocks, shards store only the header of previous blocks. The entire blockchain is distributed amongst the network’s shards. Because of this, nodes and shards only have to validate the last part of the ledger instead of the entire blockchain.
If you want to explore all of these innovative concepts further, check out the IOST technical whitepaper.
The IOST Team
The total team size currently stands at over 50 people spread throughout Asia, North America, and Europe. Furthermore, the team embodies the blockchain spirit of decentralization and permissionlessness as they grow, with an extremely active and populated GitHub.
There are 6 co-founders of the IOST project:
- Terrence Wang: Received a Master’s in Distributed Systems from Princeton and formerly Developed CoinLang at Princeton, a higher-level functional language for bitcoin.
- Jimmy Zhong: Serial entrepreneur with multiple successful exits and a Bachelor’s degree in Mathematics and Computer Science.
- Tiancheng (Bosch) Lee: Received a Bachelor’s degree in Applied Mathematics and Computer Science from Tufts and has worked at several top companies including Goldman Sachs, Deloitte, and Morgan Stanley.
- Kelvin Tan: Gold-medal winner in both a national programming and regional informatics competition, and the current CTO of Ethercap. Received a degree in Computer Science from Tsinghua University.
- Ray Xiao: Investor and advisor to startups based in both New York and Beijing, founder of multiple startups and a data scientist.
- Samantha Wang: Currently the CMO for several internet companies and has a successful track record of running several businesses,
This educated and experienced leadership team is backed by a sizeable team working on all business-related aspects, including blockchain development, programming, and operational management.
The IOST team is backed by the following group of experienced advisors, which includes Jia Tian, a Zcash consultant, and Ryan Bubinski, one of the co-founders of Codecademy:
In addition, IOST has an extensive list of partners and investors. They’ve also created an investment and partnership wing of their ecosystem named Bluehill which has already partnered with 7 promising projects including Rate3 and Covalent.
IOST Token Economics
The IOST Token has a many-faceted use case. It serves as a medium of exchange, as a means of payment for trading goods and services on the platform, as commission fees for running smart contracts, and as transaction fees to the nodes in the IOST blockchain ecosystem.
The IOST Token also plays a critical role in the calculation of users’ believability scores, the foundation for IoS’s Proof-of-Believability consensus algorithm. IOST token holdings, the tokens for transactions and commissions, and Servi token holdings (the token for measuring network contributions) all serve as a means of measuring believability scores.
All IOST Tokens were generated in the Genesis block of the IOST blockchain, meaning all tokens are already in existence. The total supply of IOST Tokens is 21,000,000,000, and the current circulating supply is 8,400,000,000 IOST.
40% of the tokens were sold during the ICO. Currently, the IOST Foundation controls 35% of the tokens, 12.5% are being reserved for community building, the team owns 10%, and the last 2.5% went to investors and advisors.
IOST can be bought at these exchanges. Since IOST is still an ERC-20 token and the IOST wallet is expected to launch in Q2 2019, you can store your IOST in Ethereum wallets such as myetherwallet and MetaMask for now.
Given that the IOST ICO finished relatively recently, their roadmap displays several exciting milestones coming up over the next few years. Interestingly, their CEO Jimmy Zhong has consistently been quoted in interviews saying the IOST team is far ahead of their current roadmap and will be releasing an updated roadmap with the mainnet date pushed forward to Q1 of 2019.
In a space where many crypto projects are delaying the release of their tech, it’s refreshing to see a project actually accelerating their release dates.
You can keep track of the project’s progress right here.
Challenges, Competitors and the Road Ahead
Protocol blockchains have been the absolute favorite of investors over the past year, and they dominate the cryptocurrency top 100 list. This means that IOST is facing serious competition, but the project has armed itself with some serious technological innovations that can give the blockchain a competitive advantage.
As the team described it:
Many people would like to think that we created IOST in order to compete with existing scaling solutions like EOS and Zilliqa. To certain degree, this is a fair. However, instead of competitors, we would like to think IOST, EOS and Zilliqa are classmates, trying to address the same question with different approaches.
The IOST team has indicated that EOS and Zilliqa are likely the project’s closest related projects, mainly because these blockchains are further along when it comes to solving scalability than NEO, Ethereum, or Qtum.
Even though IOST might have the advantage over its competitors in terms of scalability, it will be of vital importance for the project to establish a valuable and complete ecosystem by attracting a large number of developers and entrepreneurs. This is essential in order to build the infrastructure for the services ecosystem IOST aspires to create.
With a large team, impressive backing by partners and investors, and several groundbreaking technological innovations, the IOST blockchain should be able to attract valuable projects to its network during the built up to the launch of their mainnet mid-2019.
With a significant amount of developments to look forwards to as well as top tier backing, IOST is certainly a protocol blockchain to keep an eye on. To do so, you can follow their website, Twitter, Telegram, Reddit, Medium, or Github.
Related: The Top 20 Ethereum Tokens