IOTA Foundation Announces Plans to Remove Centralized “Coordinator”

Nuno Teodoro

Last Tuesday (Nov 20th), the IOTA foundation published the first of a series of articles explaining the plans in motion to gradually remove the Coordinator from the IOTA network.

The IOTA research team also scheduled an AMA (Ask Me Anything) on Reddit. They will be answering pre-submitted questions on the comments today (Nov 26th), from 5pm to 6pm CET.

IOTA Coordinator Explained

IOTA is a different kind of cryptocurrency. IOTA’s network, the Tangle, was not built using blockchain technology. The Tangle is a DAG (Directed Acyclic Graph), another kind of Distributed Ledger Technology (DLT).

As the experimential technology that it is, the Tangle’s Coordinator works as a sort of training wheels for the platform. The Tangle is designed to become more efficient and secure as the number of participants on the network increases. The IOTA foundation therefore must make sure the network is strong enough to resist potential attacks before removing the Coordinator.

IOTA Decentralization

Perhaps one of the most criticized characteristics of the IOTA project is that it is overly centralized, as the Coordinators are controlled by the IOTA foundation. Although this gives the foundation a certain degree of control over the network, the Coordinator is used to confirm transactions and prevent bad actors from acquiring enough hash power to exploit double spending or network splits. It’s important to note that, unlike EOS, the IOTA foundation is unable to change transaction history or revert transactions.

While the Coordinator is still serving an important role for the network, its removal will be a major milestone towards the decentralization and scalability of the Tangle.

In the last article of the “Coordicide” series, the IOTA foundation announced the release of an open source version of the Coordinator. This new version has been used in public testnets and the team hopes to have it deployed on the mainnet in the next six months.

The announcement above may be an indication that the “Coordicide” might still be a long way away. The IOTA team didn't give an estimated time, stating that there is no rush as the Coordinator must be removed safely:   

“The short answer is that the Coordinator can and will be removed when our research team is satisfied that we understand the coordinator-free Tangle sufficiently.”

China’s Central Bank to Test Its Digital Currency With Commercial Banks, Telecom Firms: Repot

Francisco Memoria

The People’s Bank of China (PBoC), China’s central bank, is reportedly looking to test its digital currency, dubbed digital currency electronic payment (DCEP), later this year with the help of commercial banks and telecommunications firms.

According to a report published by Chinese financial news source Caijing, the central bank is set to test the digital yuan in the cities of Shenzhen and Suzhou with the help of its “big four,” which are the Bank of China, the China Construction Bank, the Agricultural Bank of China, and the Industrial and Commercial Bank of China.

The digital currency’s tests will also see three telecommunications firms – China Telecom, China Mobile, and China Unicom – cooperate. During the test the DCEP is set to be applied in real-world scenarios such as transportation, healthcare, and education.

There will be two pilot phases, with the first one set to take place before the end of this year on a small scale. The second one is reportedly going to be a large-scale effort in Shenzhen, and if it goes well the DCEP could go live soon after.

The People’s Bank of China is believed to have been hastening efforts to develop its digital currency partly because of the Facebook-led Libra cryptocurrency’s announcement. Libra is set to be backed by a basket of currencies and short-term U.S. Treasury bonds

As CryptoGlobe covered the digital currency will, according to a PBoC official, provide its users with “controlled anonymity.” Chinese officials have also made it clear the currency’s holders won’t receive interest payments.

Featured image via Pixabay.