The team behind an IoT blockchain IoTeX has recently unveiled their new strategy: they have dubbed it MachineFi. What is IoTeX, what is MachineFi they announced and is it the reason it is blowing up? Read in our IoTeX beginner’s guide!
- IoTex is a blockchain-based Internet of Things network, focused on decentralization of this technology and protecting the privacy of users;
- The IoTeX platform also supports decentralized applications, and to use them, there is a native cryptocurrency called IOTX;
- The IoTeX team unveiled a shift to MachineFi to underline that the platform can be used to create IoT instances with functional value.
What is IoTeX and How Does it Work?
Internet of Things is an emerging technology stack that powers smart homes and small interconnected systems of devices. However, this field is not without its problems already.
- IoT systems have a scalability problem as more and more clusters of interconnected devices appear;
- Different clusters in a centralized network have a privacy problem;
- Operating such centralized network is costly;
- The functional value of IoT clusters right now is very limited.
IoTeX was developed as a solution to all those problems. It is a decentralized network to serve as a foundation for “machine economics”: anything from smart homes to autonomous vehicles.
For each of the hurdle of IoT adoption, IoTeX offers a feature to address it:
- Blockchain-within-a-blockchain architecture;
- True privacy with RingCT;
- Quick consensus mechanism based on Delegated Proof-of-Stake called Roll-DPos;
- Flexible and lightweight architecture which does not require nodes to store entire copies of the blockchain.
What is IoTeX doing to scale effectively for potentially billions of devices?
Simply put, IoTeX uses a separate chain for each individual instance. The root chain secures the whole network and subchains (the two have a parent-child chain relationship) are reserved for individual IoT clusters.
A smart home does not need to connect to other clusters all the time, and even then, it does not need to disclose all the data to the root chain. IoTeX uses ring signatures to sign transactions without needing to disclose the sender address.
The specification of Delegated Proof-of-Stake that IoTeX uses is called Roll-DPoS: it includes randomization to determine block producers. Since all verification is determined at random, the network is maintained in a decentralized manner.
As of now, the IoTeX blockchain powers a couple of hardware smart device types. One of them is real-world oracle Pebble which can track location, humidity and light and the other is Ucam, smart home security camera.
History and the Team Behind IoTeX
The development and research of IoTeX started in 2017. A team of over 40 scientists and engineers has been building IoTeX from scratch for over two years.
To raise funds, IoTeX was initially sold on a private sale in February 2018 as an ERC-20 token for $0.007 each.
The launch of the IoTeX blockchain occurred in April 2019 and at launch the Ethereum tokens were converted to IOTX coins. At the helm of the team leading to the launch were Raullen Chai, Qevan Guo, and Jing Sun.
Co-founder Raullen Chai is a University of Waterloo researcher in cryptography. His track record includes leading crypto R&D and engineering security at Uber and working as a security engineer in Google.
Another co-founder Qevan Guo used to be a research scientist in machine learning and engineering manager at Facebook.
Business expertise was brought by Jung Sun, the third co-founder. She works as a managing partner at Sparkland Capital.
What is IOTX?
To tackle the lack of functional value in IoT, IoTeX uses a native token IOTX. The main applications for IOTX are gas fees and value transfer over the root chain.
What is IoTex doing with the functional value provided by a native cryptocurrency? IOTX uses an unconventional model of issuance and deflation called Burn-Drop.
For every new device onboarded to the IoTeX network, 12,500 IOTX are burned (at the time of writing). Drop refers to rewards that stakers receive for each new device registered, and right now the pool gains 6,250 IOTX extra.
The incentives are obvious: while long-term stakers receive rewards, the total supply decreases. Moreover, this also provides clear incentives for bringing new users to the network.
IOTX Use cases
As a gas token, IOTX is needed to pay for transfer fees on the IoTeX blockchain. That includes transfers of XRC-20 tokens such as USDT and BUSD and XRC-721 NFTs.
Why would you transfer value over IoTeX? The ecosystem has dozens of applications including use cases like decentralized identity services, confidential computing and others.
Secure hardware middleware has also been built on IoTeX to enable self-sovereign devices such as real-world oracle Pebble.
Comparison with Similar Projects
IoTeX vs IOTA
When speaking about “decentralized IoT”, IOTA also comes to mind. Unlike IoTeX, which uses blockchain technology, IOTA utilizes Directed Acyclic Graph.
Directed acyclic graph, or DAG, is also a type of decentralized network which is nonlinear. So what is IoTeX’s edge over it?
While DAG is faster than a layer-one blockchain, the capabilities of scaling on DAG are very limited.
IoTeX vs Secret Network
While most privacy coins use Proof-of-Work algorithms, it does not mean PoS privacy coins do not exist. One of projects that is also focused on data privacy while running on PoS is Secret Network.
The IoTeX was built from scratch while Secret Network uses Tendermint as a basis. This enables Secret to connect to similar networks such as Cosmos.
What is IoTeX Criticized For?
The rate of adoption of IoTeX’s solutions is not particularly impressive. As of now, there are about 9,200 devices on the platform but given that IoT requires several devices for one cluster, this makes for less individual users worldwide.
Most of the apps of the ecosystem double the ones that exist on other blockchains: DEXes, games, NFT marketplaces. There is barely anything IoTeX dApps can do that other blockchain’s dApps can’t, and the lack of a “killer app” slows down the growth of the platform.
What is IoTeX Partnerships and Future?
At the time of writing, the IoTeX ecosystem includes dozens of applications and powers thousands of devices worldwide. With a rebrand to MachineFi company, IoTeX aims for the metaverse and even more smart devices.
The anticipation of the MachineFi era of IoTeX, announced at the start of November, drove the price up 200%. The team also secured partnerships with Travala, Chainlink and NOWPayments, accelerating the rally.
IoTeX on Twitter
— Astro11 (@jaisonbosco) November 17, 2021
Crypto enthusiast Astro11 pointed out the consolidation of IOTX on the USD price chart. The launch of the MachineFi platform by the team could be the necessary push to break out of it.
— Pickaxe Problems (@PickaxeProblems) November 10, 2021
User Pickaxe Problems shared their experience of holding IOTX: they browse social media for projects to check. And according to them, their research pays off.
— pewpewpewmoo (@pewpewpewmoo) November 17, 2021
User pewpewpewmoo shared some more details about the fundamentals of the project. According to Crunchbase, Nasdaq invested in IoTeX, which started the most recent rally.
What Wallet to Use for IoTeX?
Now that we reviewed the fundamentals and sentiment around IoTeX, a couple of pieces of practical advice for this IoTeX beginner’s guide. Before you start using IoTeX, make sure you have a suitable crypto wallet for it.
There is an official wallet for smartphones and desktop platforms that supports all the features of IoTeX.
In case you need an offline wallet to securely store IOTX, we can recommend Trezor. In it you can swap the assets with ChangeHero without leaving the app.
How to Buy and Exchange IOTX on ChangeHero?
An IoTeX beginner’s guide wouldn’t be complete without answering this question. If you want to exchange your crypto to IOTX and need a refresher on how exchanging with ChangeHero works, we’re here to help:
- Choose the currencies on the home page, amounts and the type of exchange. Provide your IOTX wallet address in the next step and check the amounts;
- Send in a single transaction the sum of crypto currency you will be exchanging. For a Fixed Rate transactions you have 15 minutes before it expires;
- Sit back and relax. At this step we are doing all the work: checking the incoming transaction and doing the exchange as soon as it arrives;
- As soon as the exchange has been processed, your IOTX are on the way to your wallet. And so, the transaction is finished!
If you ever run into any issues during your swap, our support specialists are always available to help you out in the chat or through the email: [email protected].
The Internet of Things, as of now, is severely centralized and vulnerable to hacking. IoTeX offers a solution to keep personal information secure without compromising.
Frequently Asked Questions
What is IoTeX used for?
IoTeX is a blockchain-based Internet of Things platform that supports smart home devices and real-world oracles.
Is IoTeX built on Ethereum?
IoTeX was initially sold on a private sale in February 2018 as an ERC-20 token. At launch in April 2019, the Ethereum tokens were converted to mainnet coins.
Who created IoTeX?
IoTeX was founded by computer scientist Raullen Chai, engineer Qevan Guo, and entrepreneur Jing Sun.
How many IoTeX coins are there?
At the moment of writing, the circulating supply is 9,540,779,324.31 IOTX according to Messari. There is no hard cap on the total supply of IOTX, since the ecosystem is expected to grow to the global scale.
How do I get an IoTeX Crypto?
What is the future of IoTeX?
IoTeX development will focus on what they call MachineFi — functional value networks for IoT.