<s>
IOTA	B-Protocol
is	O
an	O
open-source	O
distributed	O
ledger	O
and	O
cryptocurrency	O
designed	O
for	O
the	B-Operating_System
Internet	I-Operating_System
of	I-Operating_System
things	I-Operating_System
(	O
IoT	B-Operating_System
)	O
.	O
</s>
<s>
It	O
uses	O
a	O
directed	O
acyclic	O
graph	O
to	O
store	O
transactions	O
on	O
its	O
ledger	O
,	O
motivated	O
by	O
a	O
potentially	O
higher	O
scalability	O
over	O
blockchain	B-Application
based	O
distributed	O
ledgers	O
.	O
</s>
<s>
IOTA	B-Protocol
does	O
not	O
use	O
miners	O
to	O
validate	O
transactions	O
,	O
instead	O
,	O
nodes	O
that	O
issue	O
a	O
new	O
transaction	O
on	O
the	O
network	O
must	O
approve	O
two	O
previous	O
transactions	O
.	O
</s>
<s>
The	O
network	O
currently	O
achieves	O
consensus	O
through	O
a	O
coordinator	O
node	O
,	O
operated	O
by	O
the	O
IOTA	B-Protocol
Foundation	O
.	O
</s>
<s>
IOTA	B-Protocol
has	O
been	O
criticized	O
due	O
to	O
its	O
unusual	O
design	O
,	O
of	O
which	O
it	O
is	O
unclear	O
whether	O
it	O
will	O
work	O
in	O
practice	O
.	O
</s>
<s>
As	O
a	O
result	O
,	O
IOTA	B-Protocol
was	O
rewritten	O
from	O
the	O
ground	O
up	O
for	O
a	O
network	O
update	O
called	O
Chrysalis	O
,	O
or	O
IOTA	B-Protocol
1.5	O
,	O
which	O
launched	O
on	O
28	O
April	O
2021	O
.	O
</s>
<s>
A	O
testnet	O
for	O
a	O
follow-up	O
update	O
called	O
Coordicide	O
,	O
or	O
IOTA	B-Protocol
2.0	O
,	O
was	O
deployed	O
in	O
late	O
2020	O
,	O
with	O
the	O
aim	O
of	O
releasing	O
a	O
distributed	O
network	O
that	O
no	O
longer	O
relies	O
on	O
the	O
coordinator	O
for	O
consensus	O
in	O
2021	O
.	O
</s>
<s>
The	O
value	O
transfer	O
protocol	O
IOTA	B-Protocol
,	O
named	O
after	O
the	O
smallest	O
letter	O
of	O
the	O
Greek	O
alphabet	O
,	O
was	O
created	O
in	O
2015	O
by	O
David	O
Sønstebø	O
,	O
Dominik	O
Schiener	O
,	O
Sergey	O
Ivancheglo	O
,	O
and	O
Serguei	O
Popov	O
.	O
</s>
<s>
Initial	O
development	O
was	O
funded	O
by	O
an	O
online	O
public	O
crowdsale	O
,	O
with	O
the	O
participants	O
buying	O
the	O
IOTA	B-Protocol
value	O
token	O
with	O
other	O
digital	O
currencies	O
.	O
</s>
<s>
The	O
IOTA	B-Protocol
network	O
went	O
live	O
in	O
2016	O
.	O
</s>
<s>
In	O
2017	O
,	O
early	O
IOTA	B-Protocol
token	O
investors	O
donated	O
5%	O
of	O
the	O
total	O
token	O
supply	O
for	O
continued	O
development	O
and	O
to	O
endow	O
what	O
became	O
later	O
became	O
the	O
IOTA	B-Protocol
Foundation	O
.	O
</s>
<s>
In	O
2018	O
,	O
the	O
IOTA	B-Protocol
Foundation	O
was	O
chartered	O
as	O
a	O
Stiftung	O
in	O
Berlin	O
,	O
with	O
the	O
goal	O
to	O
assist	O
in	O
the	O
research	O
and	O
development	O
,	O
education	O
and	O
standardisation	O
of	O
IOTA	B-Protocol
technology	O
.	O
</s>
<s>
The	O
IOTA	B-Protocol
Foundation	O
is	O
a	O
board	O
member	O
of	O
International	O
Association	O
for	O
Trusted	O
Blockchain	B-Application
Applications	O
(	O
INATBA	O
)	O
,	O
and	O
founding	O
member	O
of	O
the	O
Trusted	O
IoT	B-Operating_System
Alliance	O
and	O
Mobility	O
Open	O
Blockchain	B-Application
Initiative	O
(	O
MOBI	O
)	O
,	O
to	O
promote	O
blockchain	B-Application
and	O
distributed	O
ledgers	O
in	O
regulatory	O
approaches	O
,	O
the	O
IoT	B-Operating_System
ecosystem	O
and	O
mobility	O
.	O
</s>
<s>
Following	O
a	O
dispute	O
between	O
IOTA	B-Protocol
founders	O
David	O
Sønstebø	O
and	O
Sergey	O
Ivancheglo	O
,	O
Ivancheglo	O
resigned	O
from	O
the	O
board	O
of	O
directors	O
on	O
23	O
June	O
2019	O
.	O
</s>
<s>
On	O
10	O
December	O
2020	O
the	O
IOTA	B-Protocol
Foundation	O
Board	O
of	O
Directors	O
and	O
supervisory	O
board	O
announced	O
that	O
the	O
Foundation	O
officially	O
parted	O
ways	O
with	O
David	O
Sønstebø	O
.	O
</s>
<s>
from	O
MIT	O
's	O
Digital	O
Currency	O
Initiative	O
(	O
DCI	O
)	O
reported	O
on	O
potential	O
security	O
flaws	O
with	O
IOTA	B-Protocol
's	O
former	O
Curl-P-27	O
hash	O
function	O
.	O
</s>
<s>
The	O
IOTA	B-Protocol
Foundation	O
received	O
considerable	O
backlash	O
in	O
their	O
handling	O
of	O
the	O
incident	O
.	O
</s>
<s>
FT	O
Alphaville	O
reported	O
legal	O
posturing	O
by	O
an	O
IOTA	B-Protocol
Founder	O
against	O
a	O
security	O
researcher	O
for	O
his	O
involvement	O
in	O
the	O
DCI	O
report	O
,	O
as	O
well	O
as	O
instances	O
of	O
aggressive	O
language	O
levelled	O
against	O
a	O
Forbes	O
contributor	O
and	O
other	O
unnamed	O
journalists	O
covering	O
the	O
DCI	O
report	O
.	O
</s>
<s>
The	O
Center	O
for	O
Blockchain	B-Application
Technologies	I-Application
at	O
the	O
University	O
College	O
London	O
severed	O
ties	O
with	O
the	O
IOTA	B-Protocol
Foundation	O
due	O
to	O
legal	O
threats	O
against	O
security	O
researchers	O
involved	O
in	O
the	O
report	O
.	O
</s>
<s>
As	O
a	O
speculative	O
blockchain	B-Application
and	O
cryptocurrency-related	O
technology	O
,	O
IOTA	B-Protocol
has	O
been	O
the	O
target	O
of	O
phishing	O
,	O
scamming	O
,	O
and	O
hacking	O
attempts	O
,	O
which	O
have	O
resulted	O
in	O
the	O
thefts	O
of	O
user	O
tokens	O
and	O
extended	O
periods	O
of	O
downtime	O
.	O
</s>
<s>
In	O
January	O
2018	O
,	O
more	O
than	O
US$10	O
million	O
worth	O
of	O
IOTA	B-Protocol
tokens	O
were	O
stolen	O
from	O
users	O
that	O
used	O
a	O
malicious	O
online	O
seed-creator	O
,	O
a	O
password	O
that	O
protects	O
their	O
ownership	O
of	O
IOTA	B-Protocol
tokens	O
.	O
</s>
<s>
The	O
seed-generator	O
scam	O
was	O
the	O
largest	O
fraud	O
in	O
IOTA	B-Protocol
history	O
to	O
date	O
,	O
with	O
over	O
85	O
victims	O
.	O
</s>
<s>
On	O
26	O
November	O
2019	O
a	O
hacker	O
discovered	O
a	O
vulnerability	O
in	O
a	O
third-party	O
payment	O
service	O
,	O
provided	O
by	O
MoonPay	O
,	O
integrated	O
in	O
the	O
mobile	O
and	O
desktop	O
wallet	O
managed	O
by	O
the	O
IOTA	B-Protocol
Foundation	O
.	O
</s>
<s>
The	O
attacker	O
compromised	O
over	O
50	O
IOTA	B-Protocol
seeds	O
,	O
resulting	O
in	O
the	O
theft	O
of	O
approximately	O
US$2	O
Million	O
worth	O
in	O
IOTA	B-Protocol
tokens	O
.	O
</s>
<s>
After	O
receiving	O
reports	O
that	O
hackers	O
were	O
stealing	O
funds	O
from	O
user	O
wallets	O
,	O
the	O
IOTA	B-Protocol
Foundation	O
shut	O
down	O
the	O
coordinator	O
on	O
12	O
February	O
2020	O
.	O
</s>
<s>
This	O
had	O
the	O
side-effect	O
of	O
effectively	O
shutting	O
down	O
the	O
entire	O
IOTA	B-Protocol
cryptocurrency	O
.	O
</s>
<s>
The	O
IOTA	B-Protocol
network	O
is	O
currently	O
centralized	O
,	O
a	O
transaction	O
on	O
the	O
network	O
is	O
considered	O
valid	O
if	O
and	O
only	O
if	O
it	O
is	O
referenced	O
by	O
a	O
milestone	O
issued	O
by	O
a	O
node	O
operated	O
by	O
the	O
IOTA	B-Protocol
foundation	O
called	O
the	O
coordinator	O
.	O
</s>
<s>
In	O
2019	O
the	O
IOTA	B-Protocol
Foundation	O
announced	O
that	O
it	O
would	O
like	O
to	O
operate	O
the	O
network	O
without	O
a	O
coordinator	O
in	O
the	O
future	O
,	O
using	O
a	O
two-stage	O
network	O
update	O
,	O
termed	O
Chrysalis	O
for	O
IOTA	B-Protocol
1.5	O
and	O
Coordicide	O
for	O
IOTA	B-Protocol
2.0	O
.	O
</s>
<s>
The	O
Chrysalis	O
update	O
went	O
live	O
on	O
28	O
April	O
2021	O
,	O
and	O
removed	O
its	O
controversial	O
design	O
choices	O
such	O
as	O
ternary	O
encoding	O
and	O
Winternitz	O
one-time	O
signatures	O
,	O
to	O
create	O
an	O
enterprise-ready	O
blockchain	B-Application
solution	O
.	O
</s>
<s>
The	O
Tangle	O
is	O
the	O
moniker	O
used	O
to	O
describe	O
IOTAs	B-Protocol
directed	O
acyclic	O
graph	O
(	O
DAG	O
)	O
transaction	O
settlement	O
and	O
data	O
integrity	O
layer	O
.	O
</s>
<s>
IOTA	B-Protocol
supports	O
both	O
value	O
and	O
data	O
transfers	O
.	O
</s>
<s>
The	O
IOTA	B-Protocol
token	O
is	O
a	O
unit	O
of	O
value	O
in	O
the	O
IOTA	B-Protocol
network	O
.	O
</s>
<s>
There	O
is	O
a	O
fixed	O
supply	O
of	O
2,779,530,283,277,761	O
IOTA	B-Protocol
tokens	O
in	O
circulation	O
on	O
the	O
IOTA	B-Protocol
network	O
.	O
</s>
<s>
IOTA	B-Protocol
tokens	O
are	O
stored	O
in	O
IOTA	B-Protocol
wallets	O
protected	O
by	O
an	O
81-character	O
seed	O
,	O
similar	O
to	O
a	O
password	O
.	O
</s>
<s>
To	O
access	O
and	O
spend	O
the	O
tokens	O
,	O
IOTA	B-Protocol
provides	O
a	O
cryptocurrency	O
wallet	O
.	O
</s>
<s>
IOTA	B-Protocol
currently	O
requires	O
a	O
majority	O
of	O
honest	O
actors	O
to	O
prevent	O
network	O
attacks	O
.	O
</s>
<s>
However	O
,	O
as	O
the	O
concept	O
of	O
mining	O
does	O
not	O
exist	O
on	O
the	O
IOTA	B-Protocol
network	O
,	O
it	O
is	O
unlikely	O
that	O
this	O
requirement	O
will	O
always	O
be	O
met	O
.	O
</s>
<s>
Therefore	O
,	O
consensus	O
is	O
currently	O
obtained	O
through	O
referencing	O
of	O
transactions	O
issued	O
by	O
a	O
special	O
node	O
operated	O
by	O
the	O
IOTA	B-Protocol
foundation	O
,	O
called	O
the	O
coordinator	O
.	O
</s>
<s>
The	O
coordinator	O
is	O
an	O
authority	O
operated	O
by	O
the	O
IOTA	B-Protocol
foundation	O
and	O
as	O
such	O
single	O
point	O
of	O
failure	O
for	O
the	O
IOTA	B-Protocol
network	O
,	O
which	O
makes	O
the	O
network	O
centralized	O
.	O
</s>
<s>
IOTA	B-Protocol
is	O
traded	O
in	O
megaIOTA	O
units	O
(	O
1,000,000	O
IOTA	B-Protocol
)	O
on	O
digital	O
currency	O
exchanges	O
such	O
as	O
Bitfinex	B-Protocol
,	O
and	O
listed	O
under	O
the	O
MIOTA	O
ticker	O
symbol	O
.	O
</s>
<s>
Like	O
other	O
digital	O
currencies	O
,	O
IOTA	B-Protocol
's	O
token	O
value	O
has	O
soared	O
and	O
fallen	O
.	O
</s>
<s>
The	O
crux	O
of	O
cryptocurrencies	O
is	O
to	O
stop	O
double	B-Operating_System
spends	I-Operating_System
,	O
the	O
ability	O
to	O
spend	O
the	O
same	O
money	O
twice	O
in	O
two	O
simultaneous	O
transactions	O
.	O
</s>
<s>
Bitcoin	B-Protocol
's	O
solution	O
has	O
been	O
to	O
use	O
Proof	O
of	O
Work	O
(	O
PoW	O
)	O
making	O
it	O
a	O
significant	O
financial	O
burden	O
to	O
have	O
a	O
minted	O
block	O
be	O
rejected	O
for	O
a	O
double	B-Operating_System
spend	I-Operating_System
.	O
</s>
<s>
IOTA	B-Protocol
has	O
designed	O
a	O
voting	O
algorithm	O
called	O
Fast	O
Probabilistic	O
Consensus	O
to	O
form	O
a	O
consensus	O
on	O
double	B-Operating_System
spends	I-Operating_System
.	O
</s>
<s>
Instead	O
of	O
starting	O
from	O
scratch	O
,	O
the	O
IOTA	B-Protocol
Foundation	O
started	O
with	O
Simple	O
Majority	O
Consensus	O
where	O
the	O
first	O
opinion	O
update	O
is	O
defined	O
by	O
,	O
</s>
<s>
Although	O
,	O
this	O
model	O
is	O
fragile	O
against	O
malicious	O
attackers	O
which	O
is	O
why	O
the	O
IOTA	B-Protocol
Foundation	O
decided	O
not	O
to	O
use	O
it	O
.	O
</s>
<s>
Instead	O
the	O
IOTA	B-Protocol
Foundation	O
decided	O
to	O
augment	O
the	O
leaderless	O
consensus	O
mechanism	O
called	O
,	O
Random	O
neighbors	O
majority	O
consensus	O
(	O
RMC	O
)	O
which	O
is	O
similar	O
to	O
SMC	O
although	O
,	O
the	O
nodes	O
in	O
which	O
their	O
opinions	O
are	O
queries	O
is	O
randomized	O
.	O
</s>
<s>
Note	O
that	O
FPC	O
is	O
only	O
utilized	O
to	O
form	O
consensus	O
on	O
a	O
transaction	O
during	O
a	O
double	B-Operating_System
spend	I-Operating_System
.	O
</s>
<s>
Ultimately	O
,	O
IOTA	B-Protocol
uses	O
Fast	O
Probabilistic	O
Consensus	O
for	O
consensus	O
and	O
uses	O
Proof	O
of	O
Work	O
as	O
a	O
rate	O
controller	O
.	O
</s>
<s>
Because	O
IOTA	B-Protocol
does	O
not	O
use	O
PoW	O
for	O
consensus	O
,	O
its	O
overall	O
network	O
and	O
energy	O
per	O
transaction	O
is	O
extremely	O
small	O
.	O
</s>
<s>
Proof-of-concepts	O
building	O
on	O
IOTA	B-Protocol
technology	O
are	O
being	O
developed	O
in	O
the	O
automotive	O
and	O
IoT	B-Operating_System
industry	O
by	O
corporates	O
as	O
Jaguar	O
Land	O
Rover	O
,	O
STMicroelectronics	O
and	O
Bosch	O
.	O
</s>
<s>
IOTA	B-Protocol
is	O
a	O
participant	O
in	O
smart	B-Device
city	I-Device
testbeds	O
,	O
to	O
establish	O
digital	O
identity	O
,	O
waste	O
management	O
and	O
local	O
trade	O
of	O
energy	O
.	O
</s>
<s>
In	O
project	O
Alvarium	O
,	O
formed	O
under	O
the	O
Linux	O
Foundation	O
,	O
IOTA	B-Protocol
is	O
used	O
as	O
an	O
immutable	O
storage	O
and	O
validation	O
mechanism	O
.	O
</s>
<s>
The	O
privacy	O
centered	O
search	O
engine	O
Xayn	O
uses	O
IOTA	B-Protocol
as	O
a	O
trust	B-General_Concept
anchor	I-General_Concept
for	O
its	O
aggregated	O
AI	B-Application
model	O
.	O
</s>
<s>
On	O
11	O
February	O
2020	O
,	O
the	B-Application
Eclipse	I-Application
Foundation	I-Application
and	O
IOTA	B-Protocol
Foundation	O
jointly	O
launched	O
the	O
Tangle	O
EE	O
(	O
Enterprise	O
Edition	O
)	O
Working	O
Group	O
.	O
</s>
<s>
Tangle	O
EE	O
is	O
aimed	O
at	O
enterprise	O
users	O
that	O
can	O
take	O
IOTA	B-Protocol
technology	O
and	O
enable	O
larger	O
organizations	O
to	O
build	O
applications	O
on	O
top	O
of	O
the	O
project	O
,	O
where	O
the	B-Application
Eclipse	I-Application
Foundation	I-Application
will	O
provide	O
a	O
vendor-neutral	O
governance	O
framework	O
.	O
</s>
<s>
In	O
2017	O
,	O
IOTA	B-Protocol
released	O
the	O
data	O
marketplace	O
,	O
a	O
pilot	O
for	O
a	O
market	O
where	O
connected	O
sensors	O
or	O
devices	O
can	O
store	O
,	O
sell	O
or	O
purchase	O
data	O
.	O
</s>
<s>
The	O
data	O
marketplace	O
was	O
received	O
critically	O
by	O
the	O
cryptocurrency	O
community	O
over	O
the	O
extent	O
of	O
the	O
involvement	O
of	O
the	O
participants	O
of	O
the	O
data	O
marketplace	O
,	O
suggesting	O
that	O
"	O
the	O
IOTA	B-Protocol
Foundation	O
was	O
actively	O
asking	O
publications	O
to	O
use	O
Microsoft	O
’s	O
name	O
following	O
the	O
data	O
marketplace	O
announcement.	O
"	O
.	O
</s>
<s>
IOTA	B-Protocol
promises	O
to	O
achieve	O
the	O
same	O
benefits	O
that	O
blockchain-based	O
DLTs	O
bring	O
decentralization	O
,	O
distribution	O
,	O
immutability	O
and	O
trust	O
but	O
remove	O
the	O
downsides	O
of	O
wasted	O
resources	O
associated	O
with	O
mining	O
as	O
well	O
as	O
transaction	O
costs	O
.	O
</s>
<s>
However	O
,	O
several	O
of	O
the	O
design	O
features	O
of	O
IOTA	B-Protocol
are	O
unusual	O
,	O
and	O
it	O
is	O
unclear	O
whether	O
they	O
work	O
in	O
practice	O
.	O
</s>
<s>
The	O
security	O
of	O
IOTA	B-Protocol
's	O
consensus	O
mechanism	O
against	O
double-spending	B-Operating_System
attacks	O
is	O
unclear	O
,	O
as	O
long	O
as	O
the	O
network	O
is	O
immature	O
.	O
</s>
<s>
Essentially	O
,	O
in	O
the	O
IoT	B-Operating_System
,	O
with	O
heterogeneous	O
devices	O
having	O
varying	O
levels	O
of	O
low	O
computational	O
power	O
,	O
sufficiently	O
strong	O
computational	O
resources	O
will	O
render	O
the	O
tangle	O
insecure	O
.	O
</s>
<s>
This	O
is	O
a	O
problem	O
in	O
traditional	O
proof-of-work	O
blockchains	B-Application
as	O
well	O
,	O
however	O
,	O
they	O
provide	O
a	O
much	O
greater	O
degree	O
of	O
security	O
through	O
higher	O
fault	O
tolerance	O
and	O
transaction	O
fees	O
.	O
</s>
<s>
At	O
the	O
beginning	O
,	O
when	O
there	O
is	O
a	O
lower	O
number	O
of	O
participants	O
and	O
incoming	O
transactions	O
,	O
a	O
central	O
coordinator	O
is	O
needed	O
to	O
prevent	O
an	O
attack	O
on	O
the	O
IOTA	B-Protocol
tangle	O
.	O
</s>
<s>
Critics	O
have	O
opposed	O
role	O
of	O
the	O
coordinator	O
for	O
being	O
the	O
single	O
source	O
of	O
consensus	O
in	O
the	O
IOTA	B-Protocol
network	O
.	O
</s>
<s>
Polychain	O
Capital	O
founder	O
Olaf	O
Carlson-Wee	O
,	O
says	O
"	O
IOTA	B-Protocol
is	O
not	O
decentralized	O
,	O
even	O
though	O
IOTA	B-Protocol
makes	O
that	O
claim	O
,	O
because	O
it	O
has	O
a	O
central	O
"	O
coordinator	O
node	O
"	O
that	O
the	O
network	O
needs	O
to	O
operate	O
.	O
</s>
<s>
This	O
was	O
demonstrated	O
during	O
the	O
Trinity	O
attack	O
incident	O
,	O
when	O
the	O
IOTA	B-Protocol
foundation	O
shutdown	O
the	O
coordinator	O
to	O
prevent	O
further	O
thefts	O
.	O
</s>
<s>
Following	O
a	O
discovered	O
vulnerability	O
in	O
October	O
2017	O
,	O
the	O
IOTA	B-Protocol
foundation	O
transferred	O
potentially	O
compromised	O
funds	O
to	O
addresses	O
under	O
its	O
control	O
,	O
providing	O
a	O
process	O
for	O
users	O
to	O
later	O
apply	O
to	O
the	O
IOTA	B-Protocol
Foundation	O
in	O
order	O
to	O
reclaim	O
their	O
funds	O
.	O
</s>
<s>
Additionally	O
,	O
IOTA	B-Protocol
has	O
seen	O
several	O
network	O
outages	O
as	O
a	O
result	O
of	O
bugs	O
in	O
the	O
coordinator	O
as	O
well	O
as	O
DDoS	O
attacks	O
.	O
</s>
<s>
Early	O
in	O
the	O
seed	O
generator	O
scam	O
,	O
a	O
DDoS	O
network	O
attack	O
distracted	O
IOTA	B-Protocol
admins	O
,	O
leaving	O
initial	O
thefts	O
undetected	O
.	O
</s>
<s>
In	O
2020	O
,	O
the	O
IOTA	B-Protocol
Foundation	O
announced	O
that	O
it	O
would	O
like	O
to	O
operate	O
the	O
network	O
without	O
a	O
coordinator	O
in	O
the	O
future	O
,	O
but	O
implementation	O
of	O
this	O
is	O
still	O
in	O
an	O
early	O
development	O
phase	O
.	O
</s>
