FUDsters, Not Misinterpreted Microsoft Partnership, Responsible For IOTA Decline, Clarifies CEO
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Two years ago, in January 2016, Cointelegraph published an interview with David Sonstebo, the CEO of IOTA, who listed out his vision for a Blockchain-less cryptocurrency and explained about the technology behind IOTA. From its humble beginnings, IOTA is now ranked in top-10 world’s cryptocurrencies.
Cointelegraph caught up with David again for a conversation about the recent events and the overall journey of IOTA.
Cointelegraph: IOTA’s price exploded abruptly after the Microsoft Partnership announcement, only to drop down after ‘the clarification.’ What do you think happened there? Was it just a misconception or could there be any deliberation from any end?
David Sonstebo: IOTA’s abrupt price increase cannot be attributed to a misinterpreted ‘Microsoft Partnership,’ even though that’s the narrative of ‘FUDsters’ and other non-critical people that blindly and misleadingly went with and spread like a virus. IOTA announced the data marketplace, which in itself is a novel killer application of IOTA and significant milestone for crypto-adoption in general, with participating companies such as Samsung ARTIK, Bosch, Fujitsu, Orange, Engie, DNV GL, Schneider Electric, EY, Accenture and tons more. These giants combined far outweigh any impact, one singular company like Microsoft had on the announcement.
Furthermore, IOTA is already a co-founder with Microsoft of the Decentralized Identity Foundation, and we were invited by Microsoft to be part of their Azure stack in early 2016. The Microsoft and IOTA connection was therefore old news to the public. The other world leading companies working with IOTA were what cemented IOTA as a leading protocol in the minds of most and consequently had an impact on the market cap. Microsoft was the least newsworthy participant of this data marketplace— thus we can rule out Microsoft in terms of price attributed to the Data Marketplace news. Beyond this, IOTA also listed on Korea’s second largest crypto exchange Coinone around the same time, which was a significant factor in the steep price and volume increase.
What happened was merely an internal procedural error on Microsoft’s side, which they have taken ownership of in correspondence with the IOTA Foundation. One of their main Blockchain engineers gave us clearance for PR, logo and provided us with a quote where the now infamous term ‘partner’ originated. We quoted them verbatim, as any professional entity would.
Afterward, a lot of FUDsters decided to spam Microsoft with inquiries like: “are you launching a data marketplace?” and “are your business partners?” This barrage made their PR department attempt to clarify the nuances in vain. Some journalists then spun a minuscule semantic issue into a controversy, which again was exploited by ‘FUDsters’ in an effort to manipulate the market. It got so amplified and epitomize just how regular users and crypto investors can easily be manipulated by the FOMO-FUD cycle that neuroscientist and author Bobby Azarian felt prompted to pen an in-depth article for PsychologyToday and HuffingtonPost about the whole debacle.
CT: When IOTA came, it essentially attracted attention for its “Blockchain-less” technology. How do you feel about the new technologies that have since come up in the cryptosphere post IOTA? Is there any that has particularly impressed you or you feel that it is an improvement, even on IOTA?
DS: There has obviously been some novel approaches in the cryptosphere since IOTA kickstarted the ‘beyond Blockchain’ era, but so far it’s mostly copycat attempts, gimmicks and half-measures. Thus far IOTA stands as the only permissionless distributed ledger to resolve fees, centralization and scaling limitations. A few months after we announced IOTA the crypto space, unfortunately, decayed into a miserable state of get-rich-quick ICOs and paid promotion with no substance. We set out with the goal of interoperability where it makes sense. We want to collaborate with anyone, which we still firmly believe in. However, due to the sheer magnitude of money involved in crypto now, there is a constant rivalry between projects that could benefit from simply synergizing instead. For a lot of people, this is no longer about technology or vision. IOTA is at present the only project I am aware of that is progressing the fundamental elements both from a technological point of view, but equally crucial concerning real-world adoption, hence my laser focus on it.
CT: What do you feel have been the highlights of IOTA so far —the major achievements— ever since phase one of its launch back in July 2016?
DS: If I were to elucidate a few, it would be first and foremost the Tangle operating as planned, even in the face of quite aggressive attack attempts. Secondly, I want to highlight the fantastic team that we have put together and continue to put together, having world-leading developers and advisors is vital to the project, and something a lot of projects think of as secondary, but the execution is everything. Thirdly I have to mention the Data Marketplace, which to me epitomizes killer applications, and the fact that we got so many world-leading corporates participating in exploring its potential is a significant win for IOTA’s goals. Finally, the registration and approval of the IOTA Foundation as the first and only in Germany as a major highlight that elevates the IOTA project to an unmatched echelon concerning gravitas and potential.
CT: What is the purpose of the IOTA Foundation that was recently launched? As far as we read, it is only to further promote IOTA’s business interests. Doesn’t that contradict the goal of a non-profit organization and what does it actually achieve?
DS: The IOTA Foundation’s role will be core development, maintenance and indeed drive adoption. Achieved through catering to the development community with the right tools, libraries, tutorials etc., as well as assisting start-ups and conglomerates alike in getting up and running with exploring IOTA for new business models and security in their pre-existing services and products. It is an entirely neutral and non-profit organization whose sole goal is to drive adoption of IOTA as a neutral standard. However, to achieve that you have to engage with the actual consumers of the technology, way too many projects in the cryptosphere think that “if you build it, they will come,” but the reality is different. In IOTA we consider adoption above all to be a key metric of success, hence why it’s so important to have a dedicated entity that takes charge of this. We chose to establish it in Germany, which most considered impossible, precisely because we want the rigorous oversight and gravitas which that brings, this is something we find to be of vital importance for IOTA and crypto, in general, to go beyond the forums and basic experiments and into production-ready environments.
CT: We go far back; in fact, IOTA was first covered by Cointelegraph in October 2015, after which we covered the beta launch and the main launch of IOTA in 2016. As you have come a long path, do you feel the way you interact with the media and journalists — and their attitude towards IOTA has changed over these years?
DS: Indeed, it’s surreal to think that Earth has circled the Sun more than twice since the first interview with you guys, which I believe had a few thousand reads, now there’s always tens of thousands reading. There’s definitely a shift in attitude towards IOTA from the media. In the beginning, we were taken seriously mostly because we had proven ourselves in the past by inventing full Proof of Stake and pioneered a lot of the Blockchain 2.0 use cases like supply chain, voting, IoT, decentralized exchanges and marketplaces. But people were still (naturally) extremely skeptical of our claims that distributed ledger technology had to go beyond Blockchain. Very few managed to grasp how Tangle even worked, and at the time our predicted problems with fees and congestion issues of Blockchain had not yet been seen in practice by everyone. Now that people have struggled with these issues and witnessed the Tangle working and see its meteoric adoption the journalists are a lot more inquisitive and feel that it is their duty as journalists to cover this technology.
CT: What’s the next bomb IOTA is planning to drop? Any news from the vine — what to expect from IOTA in the near future?
DS: Haha, the Q-bomb (inside joke in the community). 2016-2017 was all about laying the groundwork on the technological, adoption and awareness side. 2018 will be about maturing the organization and making the technology production ready. We are looking to hire 50-100 new team members through 2018 and aim to have a production ready protocol and have commenced the standardization procedures by the end of 2018. IOTA has become known for releasing colossal news, and this won’t stop, but it is crucial for us that people don’t become ‘announcement fiends,’ IOTA is an open source grassroots effort, people need to be focused on the nuts and bolts rather than just look for the next announcement. Fiending for the next news that might spike the price is a preoccupation that every crypto project suffers from, but we try to limit it by applying quite a strict policy when it comes to speculation and digging for info to the hype. Technology and vision first, if that is properly executed then the prosperity follows.
CT: On a lighter note, do you actually write all of those IOTA blogs yourself?
DS: There are a few that we all provide input on, but for most indeed, I got five or so blog posts lined up that are 90 percent done, so does my Co-founder Dominik Schiener, as well as other core devs and founders. Now that the foundation is in place and we can hire the right people to delegate specialized tasks to, I hope that we will finally have more time to create more high-quality content that elucidates the vision and technology for all, making it easier to grasp it all, especially for newcomers.
CT: Thank you!