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MIOTA risk on the recent hot cryptographic currency market tips [original]



Background: IOTA (Chinese Eotar) is a crowdfunding project in 2014 with the aim of using DAG (directed acyclic graph, called Tangle in IOTA) instead of blockchain to achieve distributed and irreversible Assurance by cryptography) A technology for message delivery, on the basis of which crypto-currency functions are integrated to serve the Internet of Things. IOTA Network officially released in November 2016 the main node ( https://github.com/iotaledger/iri/releases/tag/1.1.0.1 ) code, the official launch of the main network, which has been upgraded to 1.4.1.2.

I PROFILE: I thoroughly understand the technical details of IOTA. As the FPGA-based POW hardware acceleration code was implemented earlier, it became one of the IOTA hardware technology consultants in September and was involved in part of the IOTA research work.

The main features of IOTA

1, the address format, transaction format, hash algorithms are used ternary algorithm (signature algorithm based on the Hash function a few months ago for security reasons Keccak, similar to SHA-3); 
2, the transaction structure using Tangle ( Tangle) form, each transaction refers to two previous transactions, the more accumulated transactions, the more reliable the previous transaction; 
3, snapshot technology (Snapshot), snapshot technology can be used to reduce hard disk occupancy, but at present Has not yet officially opened, currently only in each major changes in the code (equivalent to the hard fork) to take a snapshot (that is, in the source code to solidify the entire network of all the addresses of the number of coins); 
4, transaction fee is 0, which is IOTA The biggest advantage, because IOTA does not depend on the miners, there is no miners, do not need incentives, so the transaction fee can be 0, but there is a big risk, the follow-up will be highlighted; 
5, one-time signature technology , One-time signing technology will disclose some of the private keys for each signature. As the number of signatures increases, the security of the private key decreases exponentially, so each address only Spend time (note, not the private seed IOTA wallet, each generation has its own private address from seed, a seed can generate an unlimited number of private keys); 
6, using technology similar to Hashcash, each transaction Need to do certain PoW will be recognized by the network.

IOTA Risk Analysis

1, The main reason for IOTA's triad is that its founders believe that the future world will be replaced by ternary because the terabyte CPU theoretically has better energy efficiency than the binary CPU. However, the actual situation is that up to now, the CPU of the ternary CPU is only in the scientific research and laboratory stage. The ternary and the IOTA are not strongly related. The current IOTA code is all binary. In the program, it is necessary to convert the ternary Binary, after processing and then back to the triad, the efficiency is substantially lower than the direct binary processing, the risk of this point is that the ternary CPU is only in the laboratory stage, the future may not get the world mainstream recognition, even if The CPU of the ternary CPU has better energy efficiency, and it also does not have the essential promotion to IOTA network. On the contrary, all the codes of the entire IOTA are written by JAVA, and need a large amount of conversion, the execution efficiency is low and the memory occupation is high. The JINN processor that appears at present has become the hype of IOTA, however, JINN is only a product of the exploratory phase of the ternary CPU, and the degree of their connection is weak.

2, DAG (called entanglement in IOTA) technology, DAG can be considered a special form of blockchain, DAG in the blockchain each transaction is separated into separate units, each transaction is equivalent to a pole Small blocks. These deals confirm the history of the entire book by referencing previous transactions, but DAG's lack of the role of a miner protects the books. Therefore, the irreversible safety of transactions in the books is low, and 34% Ability to affect the security of books. Because the current IOTA network is very low (usually about 1 ~ 2TPS, a better computer can be achieved), so the current IOTA network transaction confirmation is not to use the inherent characteristics of the tangle, but to use "Coordinator". When the coordinator is working, the transaction is issued by a specific address and the transaction at that address is unconditionally accepted by the entire network. It is solidified in the code for all IOTA nodes ( https://github.com/iotaledger/ ir ... ta / iri / IRI.java # L38 ), the address is: KPWCHICGJZXKE9GSUDXZYUAPLHAKAHYHDXNPHENTERYMMBQOPSQIDENXKLKCEYCPVTZQLEEJVYJZV9BWU, so the current stage of IOTA is a centralized system. The entire network is acknowledged by the coordinator. In addition, DAG technology has no advantage in network transaction propagation, All nodes still need to receive all the transaction information via broadcast, so the IOTA's infinite extension feature is essentially the same as the blockchain system's relaxed block size;

3, the snapshot technology in the future can help reduce the hard drive account booked, but at the same time it discards all the history of the transaction, leaving only the balance of security bitcoin similar to the SPV node, the entire network if the use of snapshot technology nodes will affect the whole Robustness;

4. The transaction fee is zero, first the cost is not zero due to the presence of PoW, and secondly because PoW can be hardware accelerated (I've implemented an FPGA hardware accelerator greater than 100TPS and any capable FPGA developer can develop similar code), transactions A massive DoS attack cost of 0 leads anyone to send large volumes of transactions at any time to reduce overall network efficiency, which is unacceptable in true IoT applications. The amount of data in the Internet of Things is huge , Nobody wants to deploy a full node that adds tens or even hundreds of GB a day at no cost, potentially leading to a very centralized IOTA network if it's really applied to the Internet of Things.
5. With regard to one-time signatures, the purpose of this signature technique is to make the signature algorithm have a certain amount of "quantum security". In addition, this signature technique requires a small amount of computation and is conducive to the use of IoT devices. However, Users have a huge inconvenience, each address can only spend 1 times, so in the future IOTA traders have to repeatedly change the transceiver address, in addition to each transaction can only spend once, resulting in a transaction in If you have 1Ti, send out a transaction in Pending state, except for non-stop Re-attach until you have confirmed that you have no other way, your money is equivalent to be locked . Confirm the information sent by the coordinator, if the coordinator immediately shut down the entire network paralyzed state, the current implementation of the IOTA coordinator is very inefficient, the network confirmed the rate of about 0.2TPS, of which more than 0% of the effective transactions accounted for about 10% That is, the real network confirmation rate of only 0.02TPS (transactions per second)! This is why the recent IOTA network is so congested that it does not match the IOTA's original claim of unlimited scalability. This is why a large number of users recently complained about why ITA recharged one week before it was withdrawn.

6, PoW mechanism, PoW is similar to bitcoin mining system, and mining can be accelerated with special hardware, IOTA network overall power is proportional to the current network TPS, even ordinary computers can cause network security Huge threats, with special hardware up to 100TPS, 1000TPS, there is no security at all on the IOTA network (without Tangle itself if there is no "Coordinator"), and even a single Transactions that were confirmed online before the month ago could theoretically be denied by Sub-tangle (which is equivalent to the double flower in the Bitcoin network) generated by a large number of transactions by special hardware, so the consensus of the transactions in the Tangle network is very unusual Weak (without a coordinator).

In summary, although DAG is a novel and promising technology, the IOTA network based on it is still technically still in the laboratory stage. Today MIOTA has reached a record high of 4.5 U.S. dollars and possesses a very high risk. Investors should rationally view DAG this emerging technology, strictly control the position, pay attention to risk.