• The IOTA Foundation has published a detailed breakdown of their plans for the coordicide
• A new peering system will give more weight and lower PoW requirements to nodes with a history of honesty
• With the coordinator gone, the only limit on scaling will be from hardware and thermodynamics

Today the Iota Foundation released plans for the Coordicide. The Coordinator has been a central if controversial building block since the beginning for Iota, preventing double spends but at the cost of a degree of centralization that many decentralization hardliners in crypto found unacceptable. With concrete plans in place to remove the coordinator, however, that point of contention is set to melt away.

Persistent node identities and mana

IOTA abandoned blockchain for another DAG structure called the tangle. This resulted in a rather unique network architecture with significant advantages and new challenges compared to blockchain. Specifically, the tangle does not have a scaling problem. Transactions per second are magnitudes above blockchain.

However, for a long time Iota instead suffered from a vulnerability to double spends – hence the need for the Coordinator. Without it, there was no sufficiently flawless way to keep nodes honest.

As part of the coordicide, this problem has now been solved. The network will introduce persistent node identities and a system called ‘Mana’. Mana is not a currency and cannot be traded, however it is used in case of conflict to determine which nodes to trust. In this way it functions as a sort of reputation – hard to gain and easy to lose, making it so anyone attempting to cheat is realistically only going to get one shot at passing on a dishonest transaction. In addition, a node that receives a transaction also gains mana, at the expense of the originating node. This means that, in a conflict between two parties, the recipient’s word weighs more heavily than the originator. Thus, the larger the value of a transaction, the harder to double spend it.

Auto-peering

Dishonest actors are also faced with no way to target a specific victim. Every node connecting to peers on the network follows a semi-random process that selects peers with the aim to create a ‘small world network’ – in other words, it will actively seek out peers that connect it to as much of the network as possible in as few steps as possible while relying as little as possible on any specific neighbours. This serves both to minimize the time it takes for confirmations to propagate and to protect the user from potential betrayals by cheaters. The randomization also makes it impossible to proactively target a user and set them up for an eclipse attack (Where the network itself remains healthy, but a specific user is peered by cheaters that coordinate to trick that one user).

Spam protection and Proof of Work

While Iota does not rely on Proof of Work for consensus as Bitcoin and most other blockchains do, the network does require a small amount of proof of work to issue transactions, to prevent a malicious actor from spamming the network.

With the coordicide, mana will be incorporated into this process, allowing nodes with a long history of honesty to issue transactions with lower difficulty. New nodes, and nodes that have previously attempted to cheat or spam the network, are subject to higher difficulty proof of work requirements. As a result, even devices with very weak hardware are able to issue transactions easily as long as they play by the rules, while anyone trying to swamp the network, even if previously honest, will quickly face greater and greater force multipliers set against them. Even specialized hardware like ASICs will quickly find their computational advantage eroded by rising difficulty requirements.

With IOTA’s primary focus being the Internet of Things, where many everyday objects and devices will have electrical components and weak processors, the solution is especially elegant.

Tip selection

IOTA’s ‘tip selection’ algorithms are the means by which nodes select previous transactions to confirm in order to provide proof of work for their own transactions. This may be where the unique tangle architecture differs most significantly from blockchain – transactions are not put into blocks that build on each other, instead each transaction builds directly on earlier transactions, creating what looks on the surface as a sprawling chaos of new transactions tying together unrelated previous transactions and creating new tips in the process.

With the coordicide and the introduction of mana, the Iota Foundation has been able to create new algorithms to speed up tip selection and cut down significantly on the number of valid transactions that by chance end up unconfirmed and in need of promotion or reattachment.

Voting – proactive conflict resolution

New for the post-coordinator tangle is a proposed protocol whereby nodes will actively seek out potential disagreements and resolve them before they can bubble up and spread across the network. Nodes can participate in this process even when they have no transactions of their own to propagate – and so earn mana, and give more weight to their own transactions in the future.

The proposed protocol for voting is called ‘Shimmer’, after the behaviour used by bees to protect themselves against predatory wasps. Two different algorithms have been proposed for Shimmer, with slight variations in voting protocol and processes. Both appear promising, and will need to be tested on testnets before the community can settle on which they prefer and any tweaks that might or might not be needed. So far, however, both algorithms look very promising.

By randomly peering with new nodes with similar amounts of mana for different votes, each node will be able to get a clear overview of the state of the whole network while only interacting with a small number of nodes, and so reach finality of its support for transactions quickly, preventing attackers from rolling back confirmations even with an overwhelming advantage in processing power. This way, even nation states will not be able to roll back transactions.

The future

The Iota Foundation has released quite a bomb shell with their coordicide announcement. The coordinator was a major point of contention between supporters and critics of Iota. With this beautifully detailed breakdown of the different parts of their coordicide solution, much of that contention is bound to melt away in the coming weeks and months.

From trusted time stamps for smart contracts to dynamic proof of work requirements through the mana system, removing the coordinator is not just going to make Iota fully decentralized, it is going to vastly improve the network and allow more complex constructions and use cases. The future of the Internet of Things is looking bright, and it will be fascinating to watch it emerge on the tangle.