Interface design is the process of designing the user interface (UI) for a digital product, such as a website, app, or software program. The UI is the visual and interactive elements that users see and interact with, and it plays a critical role in the overall user experience (UX).
In the context of virtual identity, interface design is particularly important because it is the primary means through which users express and experience their virtual selves. A well-designed interface can help users create a virtual identity that is both representative of who they are and aspirational to who they want to be.
Here are some of the key considerations for interface design in the context of virtual identity:
Authenticity: The interface should allow users to express their authentic selves, whether they want to be creative, professional, or playful.
Personalization: The interface should allow users to personalize their virtual identities to reflect their individual tastes and preferences.
Self-expression: The interface should provide users with the tools and opportunities to express themselves creatively and meaningfully.
Social connection: The interface should facilitate social connection and interaction with others.
Immersion: The interface should create an immersive experience that allows users to feel like they are truly part of the virtual world.
Usability: The interface should be easy to use and navigate, even for novice users.
Accessibility: The interface should be accessible to users with disabilities.
By following these guidelines, interface designers can create virtual identities that are both empowering and enjoyable for users.
In today’s digital age, virtual identity has become an integral part of our online existence. It is the representation of who we are in the digital world, and it plays a significant role in our interactions with the online community. However, the growing concern of identity theft and data breaches highlights the need for a secure and reliable system to manage virtual identity. Blockchain technology has emerged as a potential solution to these challenges, offering a secure and decentralized platform for identity management. In this article, we will explore the role of blockchain in virtual identity and its impact on digital integrity.
Understanding the Blockchain Technology
Blockchain technology is a distributed ledger that provides a secure and transparent system for recording transactions. It is a decentralized system that operates on a peer-to-peer network, eliminating the need for a central authority to govern the transactions. Each block in the chain is linked to the previous block, creating an unalterable record of all the transactions. The security of the blockchain lies in its consensus mechanism, which ensures that all network participants agree on the validity of each transaction.
The Role of Blockchain in Identity Management
Blockchain technology offers a secure and decentralized platform for identity management, enabling individuals to have greater control over their personal data. Instead of relying on central authorities to manage identity, blockchain allows individuals to create and manage their own digital identities. This eliminates the need for third-party authentication, providing a more secure and efficient system for identity verification.
Safeguarding Personal Data with Blockchain
Blockchain technology provides a secure platform for storing and sharing personal data. The decentralization of the blockchain ensures that there is no single point of failure, making it difficult for hackers to breach the system. The use of encryption algorithms further enhances the security of the data, ensuring that only authorized individuals can access it.
The Benefits of Blockchain for Digital Integrity
Blockchain technology has the potential to revolutionize the way we manage digital identities, offering several benefits for digital integrity. Firstly, it provides a secure and decentralized platform for identity management, eliminating the need for third-party authentication. Secondly, it ensures the security of personal data, safeguarding against data breaches and identity theft. Thirdly, it provides greater transparency and accountability, enabling individuals to have greater control over their data.
Blockchain and Biometric Authentication
Blockchain technology can also be used for biometric authentication, providing an additional layer of security for identity management. Biometric authentication uses unique biological characteristics such as fingerprints and facial recognition to verify identity. By combining biometric authentication with blockchain, we can create a more secure and efficient system for identity verification.
The Future of Digital Identity with Blockchain
The future of digital identity is closely linked to the development of blockchain technology. With the increasing use of blockchain in identity management, we can expect to see a more secure and efficient system for managing virtual identity. The use of biometric authentication and encryption algorithms will further enhance the security of the system, providing a reliable platform for managing personal data.
Overcoming the Challenges of Blockchain Implementation
The implementation of blockchain technology presents several challenges, including scalability, interoperability and regulatory issues. Scalability is a major challenge for blockchain, as the system needs to be able to handle a large number of transactions. Interoperability is also a challenge, as different blockchain networks may not be compatible with each other. Regulatory issues also need to be addressed, as the use of blockchain in identity management raises several legal and ethical concerns.
Regulatory Frameworks for Blockchain and Virtual Identity
Regulatory frameworks for blockchain and virtual identity are still in the early stages of development. However, several initiatives have been launched to address the legal and ethical issues surrounding blockchain technology. The EU’s General Data Protection Regulation (GDPR) and the US’s National Institute of Standards and Technology (NIST) are two examples of regulatory frameworks that aim to promote the responsible use of blockchain in identity management.
Use Cases of Blockchain in Virtual Identity
Blockchain technology has several use cases in virtual identity, including digital identity management, biometric authentication, and secure data storage. The use of blockchain in virtual identity can also be extended to other applications, such as healthcare, finance, and e-commerce.
Conclusion: The Path Towards Digital Integrity
Blockchain technology has the potential to transform the way we manage virtual identity and promote digital integrity. By providing a secure and decentralized platform for identity management, blockchain can eliminate the need for third-party authentication, safeguard personal data, and enhance transparency and accountability. While there are still challenges to overcome, the future of digital identity looks promising with the use of blockchain technology.
References and Further Reading
Böhme, R., Christin, N., Edelman, B., & Moore, T. (2015). Bitcoin: Economics, technology, and governance. Journal of Economic Perspectives, 29(2), 213-238.
Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system. Retrieved from https://bitcoin.org/bitcoin.pdf
Swan, M. (2015). Blockchain: Blueprint for a new economy. Sebastopol, CA: O’Reilly Media.
Analysts predict an AI boom, driven by possibilities and record funding. While challenges remain, a hybrid approach combining the best of the realm may finally send it sailing into the mainstream.
Artificial intelligence (AI) is becoming the dominant trend in data ecosystems around the world, and by all counts, it will accelerate as the decade unfolds. The more the data community learns about AI and what it can do, the faster it empowers IT systems and structures. This is primarily why IDC predicts the market to top $500 billion as early as 2024, with penetration across virtually all industries driving a wealth of applications and services designed to make work more effective. In fact, CB Insights Research reported that at the close of Q3 2021, funding for AI companies had already surpassed 2020 levels by roughly 55%, setting a global record for the fourth consecutive quarter.
In 2022, we can expect AI to become better in solving practical problems that hamper unstructured language data-driven processes, thanks to improvements in complex cognitive tasks such as natural language understanding (NLU). At the same time, there will be increased scrutiny into how and why AI does what it does, such as ongoing efforts by the U.S. National Institutes of Standards and Technology (NIST) aimed at more explainable AI. This will require greater transparency into AI’s algorithmic functions without diminishing its performance or raising costs.
You shall know a word by the company it keeps
Of all the challenges that AI must cope with, understanding language is one of the toughest. While most AI solutions can crunch massive volumes of raw numbers or structured data in the blink of an eye, the multitude of meanings and nuances in language, based on the context they are in is another matter entirely. More often than not, words are contextual, which means they convey different understandings in different circumstances. Something easy and natural for our brains is not that easy for any piece of software.
This is why the development of software that can interpret language correctly and reliably has become a critical factor in the development of AI across the board. Achieving this level of computational prowess would literally unleash the floodgates of AI development by allowing it to access and ingest virtually any kind of knowledge.
NLU is a vital piece of this puzzle by virtue of its ability to leverage the wealth of language-based information. Language inhabits all aspects of enterprise activity, which means that an AI approach cannot be complete without extracting as much value as possible from this type of data.
A knowledge-based, or symbolic AI approach, leverages a knowledge graph which is an open box. Its structure is created by humans and is understood to represent the real world where concepts are defined and related to each other by semantic relationships. Thanks to knowledge graphs and NLU algorithms, you can read and learn from any text, out-of-the-box, and gain a true understanding of how data is being interpreted and conclusions are being drawn from that interpretation. This is similar to how we as humans are able to create our own specific, domain-oriented knowledge, and it enables AI projects to link its algorithmic results to explicit representations of knowledge.
In 2022, we should see a definitive shift toward this kind of AI approach combining both different techniques. Hybrid AI leverages different techniques to improve overall results and better tackle complex cognitive problems. Hybrid AI is an increasingly popular approach for NLU and natural language processing (NLP). Bringing together the best of AI-based knowledge or symbolic AI and learning models (machine learning, ML) is the most effective way to unlock the value of unstructured language data with the accuracy, speed and scale required by today’s businesses.
Not only will the use of knowledge, symbolic reasoning and semantic understanding produce more accurate results and a more efficient, effective AI environment, it will also reduce the need for cumbersome and resource-intensive training, based on wasteful volumes of documents on expensive, high-speed data infrastructure. Domain-specific knowledge can be added through subject matter experts and/or machine learning algorithms leveraging the analysis of small and pinpointed training sets of data to produce highly accurate, actionable results quickly and efficiently.
The world of hybrid AI
But why is this transition happening now? Why hasn’t AI been able to harness language-based knowledge previously? We have been led to believe that learning approaches can solve any of our problems. In some cases, they can, but just because ML does well with certain needs and specific contexts doesn’t mean it is always the best method. And we see this all too often when it comes to the ability to understand and process language. Only in the past few years have we seen significant advancements in NLU based on hybrid (or composite) AI approaches.
Rather than throwing one form of AI, with its limited set of tools, at a problem, we can now utilize multiple, different approaches. Each can target the problem from a different angle, using different models, to evaluate and solve the issue in a multi-contextual way. And since each of these techniques can be evaluated independently of one another, it becomes easier to determine which ones deliver the most optimal outcomes.
With the enterprise already having gotten a taste of what AI can do, this hybrid approach is poised to become a strategic initiative in 2022. It produces significant time and cost benefits, while boosting the speed, accuracy and efficiency of analytical and operational processes. To take just one example, the process of annotation is currently performed by select experts, in large part due to the difficulty and expense of training. By combining the proper knowledge repositories and graphs, however, the training can be vastly simplified so that the process itself can be democratized among the knowledge workforce.
More to Come
Of course, research in all forms of AI is ongoing. But we will see particular focus on expanding the knowledge graph and automating ML and other techniques because enterprises are under constant pressure to leverage vast amounts of data quickly and at low cost.
As the year unfolds, we will see steady improvements in the way organizations apply these hybrid models to some of their most core processes. Business automation in the form of email management and search is already in sight. The current keyword-based search approach, for instance, is inherently incapable of absorbing and interpreting entire documents, which is why they can only extract basic, largely non-contextual information. Likewise, automation email management systems can rarely penetrate meaning beyond simple product names and other points of information. In the end, users are left to sort through a long list of hits trying to find the salient pieces of knowledge. This slows down processes, delays decision-making and ultimately hampers productivity and revenue.
Empowering NLU tools with symbolic comprehension under a hybrid framework will give all knowledge-based organizations the ability to mimic the human ability to comprehend entire documents across their intelligent, automated processes.
Functional NFTs are changing the ways we interact with each other and the gaming experience. Earlier, NFTs were limited to products but now it’s putting a value on services too. Now with functional NFTs, you can choose to buy an experience rather than a piece of art.
Non-Fungible Tokens (NFTs) have stirred up things in the world of art. While the underlying technology behind NFTs remains simple. They have morphed into multiple applications some of which we shall discuss soon. Traditionally there have been five categories of NFTs: Collectibles, Game Assets, Virtual Land, Crypto Art and Others (including domain names, property titles) etc. Currently, there seems to be another category that has been getting some buzz in the industry. This new player is called “Functional NFTs”.
What are Functional NFTs?
Let’s discuss what Functional NFTs are first. The meaning should be clear from the name itself. NFTs that provide some sort of functionality. It could be a game asset that performs some function. For example, if a game has an avatar as an NFT and it provides certain functionality, then it can be called a Functional NFT. This functionality can be seen as accruing points in a game or giving the player some special power.
Another example can be an NFT created by a restaurant owner. The NFT works as a pass for one person to have dinner on Sunday at the restaurant. Therefore the NFT has some functionality and serves a given purpose. In a similar fashion imagine walking into a club and not having to stand in a line. Well, there can be an NFT for that too. Owning that NFT can give you free access to the club and since you own the NFT, people do not need to check for your ID.
Normal vs Functional NFTs
Moreover, there has been a heated debate about value accrual in normal NFTs vs Functional NFTs. The argument is that non-functional NFTs are easier to make and are sold quickly on the market. Thus acquiring value quickly. In comparison to that Functional NFTs such as in games need to be thought about. It takes time to build a great experience around the basic utility of the functional NFT.
Consequently taking more time to build value. For example, Axie Infinity, a Pokemon-like game that allows players to collect, breed and battle creatures. It was launched in 2018, but it was quite different then from what it is right now. The developer team had multiple iterations to finesse the game experience. Once the gaming experience was finessed, the NFT assets within the game accrued value. The phenomenon is termed as “Promise Effect” which says that an NFT that promises some experience will accrue value slower than a non-functional NFT.
A new type of Functional NFTs
HODL Valley, a new metaverse gaming project is trying to create a tokenized city. One among many of its features is Functional NFT, but these NFTs take it a step too far. HODL Valley contains around 24 different locations, each with a specific function and utility. These locations are connected to DApps which carry out the functionality for users. These locations can be purchased in-app and the revenues generated by them can be taken home by the NFT owner. For example, let’s say a bank has been represented by an NFT. Since it’s connected to a DApp, it can provide lending and borrowing services. As other users in the game play and use the bank. The NFT owner, who is, in turn, the owner of the bank will be able to generate an income stream from it. That is how functional NFTs have been pitched recently.
These functional NFTs are bound to change the way we interact with games and real life. With added functionality, individuals can get a unique experience. It’s not just a token anymore which represents value, it’s a function in itself. If NFTs was money then it was only selling products until now. Now, it has started moving into services too.
What Was the Decentralized Autonomous Organization (DAO)?
One of the major features of digital currencies is that they are decentralized. This means they are not controlled by a single institution like a government or central bank, but instead are divided among a variety of computers, networks, and nodes. In many cases, virtual currencies make use of this decentralized status to attain levels of privacy and security that are typically unavailable to standard currencies and their transactions.
Inspired by the decentralization of cryptocurrencies, a group of developers came up with the idea for a decentralized autonomous organization, or DAO, in 2016.1
KEY TAKEAWAYS
The DAO was an organization created by developers to automate decisions and facilitate cryptocurrency transactions.
In June 2016, due to programming errors and attack vectors, hackers attacked the DAO, accessing 3.6 million ETH.
Digital exchange currencies de-listed the DAO token in September 2016.
Understanding the Decentralized Autonomous Organization (DAO)
The DAO was an organization that was designed to be automated and decentralized. It acted as a form of venture capital fund, based on open-source code and without a typical management structure or board of directors. To be fully decentralized, the DAO was unaffiliated with any particular nation-state, though it made use of the ethereum network.
Why make an organization like the DAO? The developers of the DAO believed they could eliminate human error or manipulation of investor funds by placing decision-making power into the hands of an automated system and a crowdsourced process. Fueled by ether, the DAO was designed to allow investors to send money from anywhere in the world anonymously. The DAO would then provide those owners tokens, allowing them voting rights on possible projects.
The DAO launched in late April 2016 thanks to a month-long crowdsale of tokens that raised more than $150 million in funds.2 At the time, the launch was the largest crowdfunding fundraising campaign of all time.
Criticisms of the DAO
By May 2016, the DAO held a massive percentage of all ether tokens that had been issued up to that point (up to 14%, according to reporting by The Economist).3 At roughly the same time, however, a paper was published which addressed several potential security vulnerabilities, cautioning investors from voting on future investment projects until those issues had been resolved.
Later, in June 2016, hackers attacked the DAO based on these vulnerabilities. The hackers gained access to 3.6 million ETH, worth about $50 million at the time.4 This prompted a massive and contentious argument among DAO investors, with some individuals suggesting various ways of addressing the hack and others calling for the DAO to be permanently disbanded. This incident also figured prominently in the hard forking of ethereum that took place shortly thereafter.
According to IEEE Spectrum, the DAO was vulnerable to programming errors and attack vectors.5 The fact that the organization was charting new territory in terms of regulation and corporate law likely did not make the process any easier. The ramifications of the structure of the organization were potentially numerous: investors were concerned that they would be held liable for actions taken by the DAO as a broader organization.
The DAO operated in murky territory about whether or not it was selling securities, as well. Further, there were long-standing issues regarding the way that the DAO would function in the real world. Investors and contractors alike needed to convert ETH into fiat currencies, and this could have impacted the value of ether.
Following the contentious argument over the DAO's future and the massive hacking incident of earlier in the summer, in September 2016, several prominent digital currency exchanges de-listed the DAO token, marking the effective end for the DAO as it was initially envisioned.67
In July 2017, the Securities and Exchange Commission (SEC) issued a report, which determined that the DAO sold securities in the form of tokens on the ethereum blockchain, violating portions of US securities law.8
Future of the DAO
What does the future hold for the DAO? The DAO as originally envisioned had not returned as of mid-2020. Nonetheless, interest in decentralized autonomous organizations as a broader group continues to grow. In 2021, The Maker Foundation, an icon in the crypto industry as the original champion of DAO, announced that it was officially turning operations over to MakerDAO (creator of the DAI stablecoin) and would dissolve by the end of the year.9
While there are many lingering concerns and potential issues regarding legality, security, and structure, some analysts and investors believe that this type of organization will eventually come to prominence, perhaps even replacing traditionally structured businesses.
Dash
The popular digital currency Dash is an example of a decentralized autonomous organization because of the way it is governed and the way its budgeting system is structured. It may only be a matter of time before additional DAOs enter the field.
Investing in cryptocurrencies and other Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date that this article was written, the author owns cryptocurrencies.
A decentralized autonomous organization (DAO), sometimes called a decentralized autonomous corporation (DAC),[a] is an organization represented by rules encoded as a computer program that is transparent, controlled by the organization members and not influenced by a central government, in other words they are member-owned communities without centralized leadership.[1][2] A DAO's financial transaction record and program rules are maintained on a blockchain.[3][4][5] The precise legal status of this type of business organization is unclear.[6]
A well-known example, intended for venture capital funding, was The DAO, which amassed $150 million in crowdfunding in May 2016, and was hacked and drained of US$50 million in cryptocurrency weeks later.[7] The hack was reversed in the following weeks, and the money restored, via a hard fork of the Ethereum blockchain. Most Ethereum miners and clients switched to the new fork while the original chain became Ethereum Classic.
Background
Decentralized autonomous organizations are typified by the use of blockchain technology to provide a secure digital ledger to track digital interactions across the internet, hardened against forgery by trusted timestamping and dissemination of a distributed database.[3][4][8] This approach eliminates the need to involve a mutually acceptable trusted third party in any decentralized digital interaction or cryptocurrency transaction.[4] The costs of a blockchain-enabled transaction and of the associated data reporting may be substantially offset by the elimination of both the trusted third party and of the need for repetitive recording of contract exchanges in different records. For example, the blockchain data could, in principle and if regulatory structures permit it, replace public documents such as deeds and titles.[3]: 42 [4] In theory, a blockchain approach allows multiple cloud computing users to enter a loosely coupled peer-to-peersmart contract collaboration.[3]: 42 [9]
Vitalik Buterin proposed that after a DAO is launched, it might be organized to run without human managerial interactivity, provided the smart contracts are supported by a Turing-complete platform. Ethereum, built on a blockchain and launched in 2015, has been described as meeting that Turing threshold, thus enabling such DAOs.[3][10][11] Decentralized autonomous organizations aim to be open platforms through which individuals control their identities and their personal data.[12]
Governance
DAO governance is coordinated using tokens or NFTs that grant voting powers. Admission to a DAO is limited to people who have a confirmed ownership of these governance tokens in a cryptocurrency wallet, and membership may be exchanged. Governance is conducted through a series of proposals that members vote on through the blockchain, and the possession of more governance tokens often translates to greater voting power. Contributions from members towards the organizational goals of a DAO can sometimes be tracked and internally compensated. Inactive holders of governance tokens can be a major obstacle for DAO governance,[5] which has led to implementations of allowing voting power to be delegated to other parties.
Issues
Social
Inactive or non-voting shareholders in DAOs often disrupt the organization's possible functionality.[5]
Legal status, liability, and regulation
The precise legal status of this type of business organization is generally unclear,[8] and may vary by jurisdiction. On July 1, 2021, Wyoming became the first US state to recognize DAOs as a legal entity.[13] American CryptoFed DAO became the first business entity so recognized.[14] Some previous approaches to blockchain based companies have been regarded by the U.S. Securities and Exchange Commission as illegal offers of unregistered securities.[6][15] Although often of uncertain legal standing, a DAO may functionally be a corporation without legal status as a corporation: a general partnership.[16] Known participants, or those at the interface between a DAO and regulated financial systems, may be targets of regulatory enforcement or civil actions only if they are out of compliance with the law.[16]
Security
A DAO's code is difficult to alter once the system is up and running, including bug fixes that would be otherwise trivial in centralized code. Corrections to a DAO require writing new code and agreement to migrate all the funds. Although the code is visible to all, it is hard to repair, thus leaving known security holes open to exploitation unless a moratorium is called to enable bug fixing.[17]
In 2016, a specific DAO, "The DAO", set a record for the largest crowdfunding campaign to date.[18][19] Researchers pointed out multiple problems with The DAO's code. The DAO's operational procedure allowed investors to withdraw at will any money that had not yet been committed to a project; the funds could thus deplete quickly.[5] Although safeguards aimed to prevent gaming shareholders' votes to win investments,[6] there were a "number of security vulnerabilities".[20] These enabled an attempted large withdrawal of funds from The DAO to be initiated in mid-June 2016.[21][22] On July 20, 2016, the Ethereum blockchain was forked to bail out the original contract.
DAOs can be subject to coups or hostile takeovers that upend its voting structures especially if the voting power is based upon the number of tokens one owns. An example of this occurred in 2022, when Build Finance DAO suffered a coup in which one person amassed enough tokens to get a vote passed, then voted to give themselves full control of the DAO, then, using this power, they drained all of the money from the DAO.[23]
^Depending on English dialect, it may also be spelled decentralised autonomous organisation. The terms decentralized autonomous company, distributed autonomous organization, etc., have also been used.
^ Jump up to:abcdeVigna, P.; Casey, M. J. (27 January 2015). The Age of Cryptocurrency: How Bitcoin and the Blockchain Are Challenging the Global Economic Order. St. Martin's Press. ISBN9781250065636.
^ Jump up to:abWright, A; De Filippi, P. (10 March 2015). "Decentralized Blockchain Technology and the Rise of Lex Cryptographia". SSRN2580664.
^Norta, A. (18 August 2015). "Creation of Smart-Contracting Collaborations for Decentralized Autonomous Organizations". Perspectives in Business Informatics Research. Lecture Notes in Business Information Processing. Vol. 229. pp. 3–17.
^Deegan, P. (2014). "Chapter 14—The Relational Matrix: The Free and Emergent Organizations of Digital Groups and Identities". In Clippinger, J. H.; Bollier, D. (eds.). From Bitcoin to Burning Man and Beyond: The Quest for Identity and Autonomy in a Digital Society. Amherst, Massachusetts: Institute for Institutional Innovation. pp. 160–176. ISBN978-1-937146-58-0. creating an operational and autonomous Trust Framework [that can i]ntegrate with a secure discovery service in the form of a Decentralized Autonomous Organization ...
In 2021, the global IoT market has reached $17.5 billion of total value.
Consumers are rapidly using Smart Home technology, which accounts for 97% of global sales. Smart House technologies have the fastest growth compared to other categories, fueled by home upgrades during the COVID-19 epidemic.
The Internet of Things industry is diverse in terms of both application and brand. The IoT market is shaped by pure players (like PTC) as well as huge consolidated organizations with diverse goods and services.
The introduction of 5G communication standard is a game changer for speedy connectivity between IoT devices. Using edge computing instead of cloud computing speeds up procedures by collecting and analyzing data at the IoT device level.
Automation utilizing IoT also benefits industrial use cases, resulting in a new trend: the Industrial Internet of Things (IIoT). But as IoT use grows, so do cybersecurity dangers, as these devices become targets for hackers.
Blockchain has proven to have a significant impact on the Internet of Things by increasing safety and enabling the integration of more devices. The improvements in IoT device security speed up the adoption of this breakthrough invention and bring up new opportunities for businesses.
As of today, few IoT systems utilize the blockchain to transfer data. Blockchain technology allows for immutable and decentralized data transfer and both IoT and blockchain need conscious and non-intentional risk management.
For these reasons, blockchain technology can address several of the IoT cybersecurity needs, including integrity, secure communication, and resilience: it might bring additional security qualities like availability and accessibility to a secure micropayment system.
The ideal blockchain implementation in the IoT space must have no or minimal transaction costs, significant growth potential, and a scalable identity management procedure.
However, traditional blockchain does not address all IoT security concerns: personal data confidentiality and protection need additional encryption.
That’s where IoTeX stands out.
IoTeX
IoTeX was founded in 2017 by Raullen Chai, Qevan Guo, and Jing Sun. and deployed in February 2018.
IoTeX is a full-stack platform that enables trustworthy data from trusteddevices to be used in trusted DApps.
It employs permissioned or permissionless blockchains, enhancing privacy with quick consensus and immediate finality.
IoTeX believes no one blockchain solution can meet all IoT needs. For this reason, they established specific platforms that will communicate with defined IoT devices, following the idea of separation of tasks.
Indeed, the specified level of IoT structures can only be managed by a certain level of blockchain complexity.
The IoTeX platform is composed of many technology layers:
Roll-DPoS consensus with more than 60 decentralized delegates
Secure Hardware: tamper-proof devices using Trusted Execution Environment (TEE) that work flawlessly with IoTeX
Real-World Data Oracles: turn real-world events into verified data for IoTeX DApps
Decentralized identity framework that allows users/devices to control their data and credentials
IoTeX Rootchain and Subchains — Fast Consensus with Instant Finality
IoTeX has a public permissionless root chain as well as many subchains.
Subchains may be permissioned or permissionless blockchains that allow smart contracts.
The root chain is a public blockchain that focuses on scalability, resilience, privacy-preserving functionalities, and subchain orchestration: it has been deployed to transmit value and data across subchains, supervise the different subchains along with settlement and anchor payments for them.
To ease transaction ordering, the IoTeX root chain employs the UTXO concept.
A subchain, on the other hand, is a blockchain that can be either private o public that uses the root chain to communicate with other subchains.
A subchain's key characteristics are flexibility and extensibility as they are needed to meet the diverse IoT applications. To function, a subchain is typically managed by operators with a strong stake in the root chain.
Additionally, the system lets users choose one or more delegated operators to act for them, with or without a bond. To seal new blocks, the delegator acts like a light client on the root chain, and like a full node on the subchain.
Consensus mechanism
IoTex root chainconsensus delivers immutable blocks in real-time and it employs the so-called Roll-DPoS (randomized delegated proof of stake): token holders vote for their delegates, who are then ranked according to the number of votes they get.
The delegates who received the most votes are known as the “consensus delegates” for the present epoch (1 hour). A randomization method then selects a sub-committee to preserve the agreement and generate new blocks for each new epoch.
Block finality is critical for IoTeX cross-blockchain communications. These interactions are based on simplified payment verification (SPV), a mechanism that allows a lightweight node to authenticate a transaction using a Merkle tree and block headers without downloading the complete blockchain. IoTeX employs two-way pegging (TWP) to allow token transfers to and from subchains.
Secure Hardware
A core idea of the project is to have and provide final users with trusted devices for the data collection.
Hardware to be considered secured and tamper-proof needs to embed a Trusted Execution Environment, which are extremely secure and segregated enclaves that operate in parallel with a device’s/main machine’s system.
A TEE protects the confidentiality and integrity of all data and processes inside it.
IoTex’s goal is to make the first decentralized machines that can participate in the Internet of Trusted Things autonomously. In this regard, the company made the first hardware device that can’t be manipulated: the Pebble Tracker.
Pebble tracker
The Pebble Tracker has a TEE and a lot of sensors (GPS, climate, motion, and light) to get information from the real world and turn it into verifiable, blockchain-ready data. In addition to minting digital assets, smart contracts can be used to do things like train machine learning models and make crowdsourced climate indices bringing verifiable and trusted.
Decentralized Identity
Decentralized Identity (DID) is the “root of self-sovereignty” for the IoTeX platform. Unlike other blockchain networks, IoTeX has created a DID system for both individuals and machines. People and devices may interact directly using IoTeX since their IDs are interoperable and standardized. IoTeX DID also enables people and devices to own/control their data and identity over the IoTeX network.
The Industrial Internet Consortium is currently standardizing IoTeX’s DID technology and Identity & Access Management (IAM) architecture (IIC). It can link various application layers and enable user-centric data exchange across global IoT ecosystems with billions of IoT devices and millions of users.
Data oracles
Data oracles are required for smart contracts to access off-chain data. For the blockchain sector, IoTeX is constructing the world’s first data oracles that concentrate on verified real-world data from trustworthy devices, making IoTeX the first mover in this direction.
Real-world data on IoTeX will enable thousands of use cases and new on-chain assets supported by real-world data. As an approved data hub, IoTeX may now “serve” data to other blockchains like Ethereum and Polkadot.
Team
Raullen Chai, Qevan Guo, Xinxin Fan, and Jing Sun are the creators of IoTeX.
In addition to co-founding IoTeX, Raullen Chaiis a consultant at BootUP Ventures and a member of the Industrial Internet Consortium’s Industrial Distributed Ledger Task Group. He formerly served as Uber’s head of cryptocurrency research and development, as well as technical security.
Qevan Guo is also one of Hyperconnect Lab’s co-founders. He worked for Facebook as a researcher and technical director.
Xinxin Fan was a senior research engineer at the Bosch Research and Technology Center in North America prior to co-founding IoTeX. He also worked at the University of Waterloo as a research associate and project manager.
Jing Sun serves as a managing partner at Sparkland Capital. She is a limited partner at Polychain Capital and a Rippling angel investor.
The whole IoTex team is made up of about 30 people including scientists, researchers, and numerous engineers from giants such as Google, Facebook, Uber, and Bosch.
Tokenomics
The $IOTX token enables the IoTeX blockchain. IOTX provides numerous utilities to facilitate trustworthy interactions amongst stakeholders, including users, Delegates (miners), application makers, and service providers.
The IOTX token offers financial and reputational incentives to promote decentralized IoTeX Network governance/maintenance. Participants may spend, stake, or burn IOTX to access network resources. Increased demand and value of IOTX will encourage network members to maintain and extend the network.
Delegates stake IOTX to be eligible to participate in consensus, while service providers stake/spend IOTX to provide services to builders.
IOTX has a 10 billion maximum supply and is deflationary — IOTX is burnt for every new device and user registered to the IoTeX Network, rewarding long-term holders.
Following the onboarding of 1 million “Powered by IoTeX” devices, the “Burn-to-Certify” tokenomics will be enabled. Starting from that point on, builders will burn IOTX to access specific services/capabilities for each new device. As seen in the graph below, the overall supply of IOTX will drop with each additional “Powered by IoTeX” device.
Notably, these are the tokenomics that power the IoTeX blockchain, however, apps “Powered by IoTeX” may create their tokens and tokenomics based on their own incentives/rules.
Maximum Supply: 10 Billion IOTX
Total Supply: 8.8 Billion IOTX (after Burn-Drop)
900 Million IOTX (9% of max supply) will be gradually burned as 1 Million devices will be registered and confirmed on IoTeX
265 Million IOTX (2.65% of max supply) was burned in June 2020 as part of Mainnet GA activation
Circulating Supply: 9.54 Billion IOTX
MachineFi
MachineFi is a concept used to describe the combination of blockchain and Internet of Things (IoT) technology.
This concept seeks to connect the physical world with the metaverse.
MachineFi also defines a network of smart devices that communicate with one another on the blockchain via the internet. On many fronts, blockchain has developed a robust framework for enabling decentralization.
IoTeX 2.0 intends to decentralize the MachineFi sector, allowing smart device users to engage in a rising trillion-dollar economy free of the constraints imposed by centralized data providers.
The “Proof-of-Anything” idea will be launched in the MachineFi upgrade. This will let IoT devices provide on-chain proofs of real-world events such as health measurements and GPS positions.
Conclusions
Blockchain technology can meet several cybersecurity requirements for IoT devices because it is distributed and can’t be changed.
However, a single blockchain implementation that doesn’t have other ways to deal with complexity, like smart contracts, edge, and cloud computing, can’t meet all of the security requirements that IoT platforms need to meet.
Identity and Access Management is an important part of building a strong defense against intentional risks that IoTex decided to tackle from day 1.
Disclaimer
This is not, in any case, financial advice, the goal of my research will always be to dive deep into projects and study them from different angles, I do include personal opinions based on my experience with similar projects that I have recently studied.
I am and will always be open to discussion.
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Please always do your research before investing in anything.
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