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What is IOST?

About Jorn van Zwanenburg 13-16 minutes


Ask anyone in the know and they will tell you that the blockchain industry is plagued by scalability constraints, something we keep experiencing with increased usage of blockchains. Pick up any book about growing a business and you’re reminded that if a company can’t scale, it will fail. Since blockchain technology is still in its early development stages, most major scalability problems remain unsolved. Meet the Internet of Services, listed as IOST. This new blockchain startup, which raised $31.3 million in its ICO of early 2018, is directed at improving blockchain infrastructure by focusing on the scalability issues the technology struggles with. The IOST team understands that no blockchain application will be able to compete with the likes of giants such as Alibaba, Facebook and Airbnb if it can’t handle an equal amount of transactions. Through the employment of revolutionary innovations, such as Efficient Distributed Sharding and their Proof-of-Believability consensus mechanism, IOST wants to bring the advantages of blockchain to the masses without being limited by scalability.

What Does IOST Do?

The Internet of Service project is essentially a protocol blockchain, and it provides its users with a platform on which they can exchange online services and digital goods in a decentralized manner. As the name implies, the IOST blockchain will host an infrastructure that supports a service-oriented ecosystem. Moreover, the IOST protocol allows for developers to deploy large-scale dapps that can support large numbers of users at once, something that most current protocol blockchains can’t. What makes IOST stand out from competitors such as Ethereum and NEO is the project’s focus on scalability solutions. Scalability obstacles are currently haunting the blockchain industry, posing a serious barrier for the technology to reach critical adoption. People are not going to shift to blockchain technology if it means slow transactions, unusually high fees, and low throughput. By focusing on an alternative consensus mechanism and an innovative blockchain architecture, the IOSTteam is trying to solve the industry’s scalability hurdles. In their technical whitepaper, the team states that their IOSTblockchain will be able to handle up to 100,000 transactions per second. This means that the open-source IOSTproject can enable business-grade decentralized services.

Proof-of-Believability Consensus Mechanism

A major challenge faced by traditional Proof-of-Stake consensus algorithms is that they inherently come with the threat of centralization. This is because major token holders have a bigger chance of being selected to mine (or mint) and receiving the accompanied reward; thus, the rich get richer, which means even more tokens to stake, and so on in a self-perpetuating cycle. The IOST team believes PoB to be a major improvement over PoS because it ensures scalability while preventing such centralization. It does this by splitting network nodes into 2 categories: believable and normal nodes. Believable nodes process the transactions first. Once their batch is finished, samples of their outcomes are validated and verified by normal nodes. Normal nodes thus function as validators of the trustworthiness of believable nodes. If a normal node gauges dishonesty in a believable node, then this node will lose of all its tokens and its believability score will go back to zero. To be selected as a believable node depends on users’ believability score, which is connected to a node’s network reputation. Parameters for this include a user’s token balance, community contributions, reviews, and several more. Servi is an IOST platform-native token used to assert users’ contributions to the network as well as incentivize members to contribute to the network. Servi is non-tradable, self-destructs once a block is validated by a node, and is distributed automatically. The goal of the PoB consensus mechanism is to have a fully decentralized governance system. To ensure that the IOST platform and protocol is fully optimized before making it fully decentralized, the Internet of Service Foundation, a Singapore-based nonprofit, works on developing the IOST blockchain and relevant technologies. The foundation is comprised of blockchain researchers and experts, distributed systems scientists, programmers, and tech enthusiasts

IOST Token Economics

The IOST Token has a many-faceted use case. It serves as a medium of exchange, as a means of payment for trading goods and services on the platform, as commission fees for running smart contracts, and as transaction fees to the nodes in the IOST blockchain ecosystem. The IOST Token also plays a critical role in the calculation of users’ believability scores, the foundation for IoS’s Proof-of-Believability consensus algorithm. IOST token holdings, the tokens for transactions and commissions, and Servi token holdings (the token for measuring network contributions) all serve as a means of measuring believability scores.

Source: https://www.iost.io/

You can keep track of the project’s progress right here.

Last Updated On July 29, 2019
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